KONECRANES PLC FINANCIAL STATEMENTS BULLETIN 2015

KONECRANES PLC FINANCIAL STATEMENTS BULLETIN February 3, 2016 at 9:00 a.m.

ORDER BOOK HIGHER, OPERATIONAL EBIT AT PREVIOUS YEAR’S LEVEL

Figures in brackets, unless otherwise stated, refer to the same period a year earlier. Figures are unaudited.

FOURTH QUARTER HIGHLIGHTS

- Order intake EUR 512.5 million (513.3), -0.1 percent; Service -0.1 percent and Equipment -2.6 percent.
- Order book EUR 1,036.5 million (979.5) at year-end, +5.8 percent compared with a year before.
- Sales EUR 609.0 million (608.1), +0.1 percent; Service +6.7 percent and Equipment -4.2 percent.
- Operating profit excluding non-recurring items* EUR 44.6 million (47.1), 7.3 percent (7.7) of sales.
- Non-recurring items* EUR 13.8 million (1.6).
- Operating profit EUR 30.8 million (45.5), 5.1 percent of sales (7.5).
- Earnings per share (diluted) EUR 0.21 (0.51).
- Net cash flow from operating activities EUR 40.9 million (66.4).
- Net debt EUR 203.2 million (149.5) and gearing 44.6 percent (33.3).

FULL-YEAR 2015 HIGHLIGHTS

- Orders received EUR 1,965.5 million (1,903.5), +3.3 percent; Service +7.8 percent and Equipment -0.4 percent.
- Sales EUR 2,126.2 million (2,011.4), +5.7 percent; Service +10.9 percent and Equipment +1.5 percent.
- Operating profit excluding non-recurring items* EUR 117.7 million (119.1), 5.5 percent (5.9) of sales.
- Non-recurring items* EUR 54.7 million (3.2).
- Operating profit EUR 63.0 million (115.8), 3.0 percent of sales (5.8).
- Earnings per share (diluted) EUR 0.53 (1.28).
- Net cash flow from operating activities EUR 39.3 million (148.4).
- Dividend proposed by the Board of Directors is EUR 1.05 (1.05) per share.
- Figures are unaudited**

*Non-recurring items include restructuring costs, transaction costs relating to the Terex merger, and the unwarranted payments due to identity theft and fraudulent actions (only in the third quarter of 2015, not deducted by crime insurance indemnity). The non-recurring items in 2014 included restructuring costs only.
** The auditor’s report will be issued later as the US PCAOB audit is not yet completed and the timetables for finalizing the ISA and PCAOB audits are aligned.

MARKET OUTLOOK

Customers are cautious about investing as economic growth has slowed down across the globe. Companies operating in emerging and commodity markets are particularly under pressure to save costs. Business activity in the North American manufacturing and process industries weakened toward the end of 2015 and demand outlook is more uncertain than a year ago. Demand situation in Europe is stable. Even though the global container throughput has slowed down, our offer base for container handling equipment has remained solid and the order book for 2016 deliveries is good. Continued contract base growth bodes well for the future of the service business.

FINANCIAL GUIDANCE

Based on the order book, the service contract base and the near-term demand outlook, sales in 2016 are expected to be higher than in 2015. We expect the 2016 operating profit, excluding non-recurring items, to improve from 2015.

*) Non-recurring items include transaction costs (-17.2 MEUR in 1-12/2015 and -8.7 MEUR in 10-12/2015) which contain advisory, legal and consulting fees related to Konecranes Terex merger, restructuring costs (-20.5 in 1-12/2015 and -5.0 MEUR in 10-12/2015) and the unwarranted payments due to the identity theft and fraudulent actions (-17.0 MEUR in 1-12/2015 and 0.0 MEUR in 10-12/2015). The non-recurring items in 2014 included restructuring costs only.
**) The Board’s proposal to AGM.

President and CEO Panu Routila:

“Our Q4 results came close to our expectations with Group orders, sales, and operating profit, excluding non-recurring items, being near the previous year’s levels. Service continued to improve its profitability on a year-on-year basis in the fourth quarter. Its full-year 2015 operating margin, excluding restructuring costs, rose by 0.4 percentage points to 10.4 percent. We were able to generate modest sales growth at comparable currencies despite the fact that many of our industrial customers experienced headwinds in their businesses. Service’s order book and contract base value were up 8.7 percent and 7.5 percent on a year-on-year basis at year-end 2015, respectively, which bodes well for the continued improvements in 2016.

Equipment order intake recovered sequentially, thanks to the pick-up in container handling equipment orders that were on a good level. At the same time, the demand among industrial customers continued to be sluggish, particularly in emerging markets. We cannot be satisfied with the year-on-year decline of EUR 5.0 million in the Equipment Q4 operating profit, excluding restructuring costs. This was mainly due to the 7.1 percent sales decline at comparable currencies, unfavorable sales mix, and a provision of EUR 3.3 million relating to a receivable from a Latin American customer. On the other hand, our cost savings actions are delivering the expected results. Business Area Equipment order book was up 5.3 percent on a year-on-year basis at year-end 2015, incorporating a solid outlook for the container handling equipment deliveries in 2016.

When I took the position as President and CEO in November 2015, I already knew of both the huge potential Konecranes offers as an organization and the value of the expertise it houses. Working hands-on with our people in the months since then has only confirmed this impression.

Our main strength is in the experts we employ. Witnessing their joint efforts toward the success of our businesses is a continuing inspiration, and we aspire to make even better use of this resource to fuel the growth. As chief executive, I want to invest in people, invest in R&D, and invest in sustaining Konecranes as a true technology leader. We do all this to ensure that we serve our customers continuously with better products and services.

We are making changes to bring more direct business commandership into our ways of working, and some may welcome this as an overdue development. Our overheads have been too high and therefore we need to reduce our fixed cost base to improve our competitiveness. Renewal is in the air for Konecranes, just as it inevitably lies in the future of the industries we serve.”

BOARD OF DIRECTORS’ PROPOSAL FOR DISPOSAL OF DISTRIBUTABLE FUNDS

The parent company’s non-restricted equity is EUR 276,744,547.45, of which the net income for the year is EUR 164,816,834.32. The Group’s non-restricted equity is EUR 395,615,000.

According to the Finnish Companies Act, the distributable funds of the company are calculated based on the parent company’s non-restricted equity. For the purpose of determining the amount of the dividend, the Board of Directors has assessed the liquidity of the parent company and the economic circumstances subsequent to the end of fiscal year.

Based on such assessments the Board of Directors proposes to the Annual General Meeting that a dividend of EUR 1.05 be paid on each share and that the remaining non-restricted equity is retained in shareholders’ equity.

A pdf version of the Konecranes’ full audited financial statements, including the report of the Board of Directors, and corporate governance statement will be available on the web on March 1, 2016, and the printed version during week 11.

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 financial statements bulletin 2015. 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 restaurant Savoy’s Salikabinetti (address Eteläesplanadi 14) at 11.00 a.m. Finnish time. The 2015 financial statements will be presented by Konecranes’ President and CEO Panu Routila 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 on January 15, 2016 for the conference call details.

KONECRANES PLC

Miikka Kinnunen
Director, Investor Relations

FURTHER INFORMATION
Mr. Panu Routila, 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 2015, Group sales totaled EUR 2,126 million. The Group has 11,900 employees at 600 locations in 48 countries. Konecranes is listed on the Nasdaq Helsinki (symbol: KCR1V).

DISTRIBUTION
Nasdaq Helsinki
Media
www.konecranes.com

Forward Looking Statements 

This document contains forward-looking statements regarding future events, including statements regarding Terex or Konecranes, the transaction described in this document and the expected benefits of such transaction and future financial performance of the combined businesses of Terex and Konecranes based on each of their current expectations. These statements involve risks and uncertainties that may cause results to differ materially from those set forth in the statements. When included in this document, the words “may”, “expects”, “intends”, “anticipates”, “plans”, “projects”, “estimates” and the negatives thereof and analogous or similar expressions are intended to identify forward-looking statements. However, the absence of these words does not mean that the statement is not forward-looking. Terex and Konecranes have based these forward-looking statements on current expectations and projections about future events. These statements are not guarantees of future performance.

Because forward-looking statements involve risks and uncertainties, actual results could differ materially. Such risks and uncertainties, many of which are beyond the control of Konecranes, include, among others: the ability of Terex and Konecranes to obtain shareholder approval for the transaction, the ability of Terex and Konecranes to obtain regulatory approval for the transaction, the possibility that the length of time required to complete the transaction will be longer than anticipated, the achievement of the expected benefits of the transaction, risks associated with the integration of the businesses of Terex and Konecranes, the possibility that the businesses of Terex and Konecranes may suffer as a result of uncertainty surrounding the proposed transaction, and other factors, risks and uncertainties that are more specifically set forth in Terex’ public filings with the SEC and Konecranes’ annual and interim reports. Konecranes disclaims any obligation to update the forward-looking statements contained herein.

IMPORTANT ADDITIONAL INFORMATION

This document relates to the proposed merger of Terex and Konecranes through which all of Terex’ common stock will be exchanged for Konecranes ordinary shares (or American depositary shares, if required). This document is for informational purposes only and does not constitute an offer to purchase or exchange, or a solicitation of an offer to sell or exchange, all of common stock of Terex, nor is it a substitute for  the Preliminary Prospectus included in the Registration Statement on Form F-4 (the “Registration Statement”) to be filed by Konecranes with the SEC, the Prospectus/Proxy to be filed by Terex with the SEC, the listing prospectus of Konecranes to be filed by Konecranes with the Finnish Financial Supervisory Authority (and as amended and supplemented from time to time, the “Merger Documents”). No offering of securities shall be made in the United States except by means of a prospectus meeting the requirements of Section 10 of the U.S. Securities Act of 1933.

INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE MERGER DOCUMENTS AND ALL OTHER RELEVANT DOCUMENTS THAT KONECRANES OR TEREX HAS FILED OR MAY FILE WITH THE SEC, NASDAQ HELSINKI, OR FINNISH FINANCIAL SUPERVISORY AUTHORITY WHEN THEY BECOME AVAILABLE BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION THAT INVESTORS AND SECURITY HOLDERS SHOULD CONSIDER BEFORE MAKING ANY DECISION REGARDING THE PROPOSED MERGER.

The information contained in this document must not be published, released or distributed, directly or indirectly, in any jurisdiction where the publication, release or distribution of such information is restricted by laws or regulations. Therefore, persons in such jurisdictions into which these materials are published, released or distributed must inform themselves about and comply with such laws or regulations. Konecranes and Terex do not accept any responsibility for any violation by any person of any such restrictions. The Merger Documents and other documents referred to above, if filed or furnished by Konecranes or Terex with the SEC, as applicable, will be available free of charge at the SEC’s website (www.sec.gov) or by writing to Anna-Mari Kautto, Investor Relations Assistant, Konecranes Plc, P.O. Box 661, FI-05801 Hyvinkää, Finland or Elizabeth Gaal, Investor Relations Associate, Terex, 200 Nyala Farm Road, Westport, CT 06880, USA.

Konecranes and Terex and their respective directors, executive officers and employees and other persons may be deemed to be participants in the solicitation of proxies in respect of the transaction. Information regarding Konecranes' directors and executive officers is available in Konecranes’ annual report for fiscal year 2014 at www.konecranes.com. Information about Terex' directors and executive officers and their ownership of Terex ordinary shares is available in its Schedule 14A filed with the SEC on April 1, 2015. Other information regarding the interests of such individuals as well as information regarding Konecranes’ and Terex' directors and officers will be available in the proxy statement/prospectus when it becomes available. These documents can be obtained free of charge from the sources indicated above.