KONECRANES PLC’S INTERIM REPORT JANUARY-JUNE 2014
KONECRANES PLC INTERIM REPORT July 23, 2014 at 9:00 a.m.
ORDER INTAKE, OPERATING PROFIT AND CASH FLOW IMPROVED IN THE SECOND QUARTER
Figures in brackets, unless otherwise stated, refer to the same period a year earlier
SECOND QUARTER HIGHLIGHTS
- Order intake EUR 523.5 million (503.0), +4.1 percent; Service -4.2 percent and Equipment +7.3 percent.
- Order book EUR 1,029.9 million (1,079.4) at end-June, 4.6 percent lower than a year ago, 9.8 percent higher than at end-March 2014.
- Sales EUR 481.6 million (519.9), -7.4 percent; Service -2.9 percent and Equipment -10.1 percent.
- Operating profit excluding restructuring costs EUR 21.6 million (17.2), 4.5 percent of sales (3.3).
- Restructuring costs EUR 0.9 million (0.0).
- Operating profit including restructuring costs EUR 20.7 million (17.2), 4.3 percent of sales (3.3).
- Earnings per share (diluted) EUR 0.20 (0.19).
- Net cash flow from operating activities EUR 42.1 million (-32.3).
- Net debt EUR 256.5 million (269.6) and gearing 64.7 percent (63.0).
JANUARY-JUNE HIGHLIGHTS
- Order intake EUR 962.8 million (1,085.7), -11.3 percent; Service -2.3 percent and Equipment -15.6 percent.
- Sales EUR 908.9 million (1,015.8), -10.5 percent; Service -3.7 percent and Equipment -14.7 percent.
- Operating profit excluding restructuring costs EUR 37.2 million (40.3), 4.1 percent of sales (4.0).
- Restructuring costs EUR 1.3 million (4.3).
- Operating profit including restructuring costs EUR 35.9 million (36.1), 4.0 percent of sales (3.5).
- Earnings per share (diluted) EUR 0.35 (0.38).
- Net cash flow from operating activities EUR 17.2 million (-0.1).
MARKET OUTLOOK
The growth in industrial production and container throughput has improved to some extent. The purchasing managers’ indexes are giving a reason for cautious optimism in developed countries. However, the near-term market outlook in emerging markets still remains uncertain. Continued contract base growth bodes well for the future of the service business. The quarterly Equipment order intake may fluctuate due to the timing of the large port crane projects.
FINANCIAL GUIDANCE
The sales in 2014 are expected to be approximately at the same level as in 2013. We expect the 2014 operating profit, excluding restructuring costs, to be approximately at the same level or to improve slightly from 2013.
| KEY FIGURES | Second quarter | First half year | ||||||
| 4-6/2014 | 4-6/2013 | Change % | 1-6/2014 | 1-6/2013 | Change % | R12M | 1-12/ 2013 | |
| Orders received, MEUR | 523.5 | 503.0 | 4.1 | 962.8 | 1,085.7 | -11.3 | 1,797.9 | 1,920.8 |
| Order book at end of period, MEUR | 1,029.9 | 1,079.4 | -4.6 | 893.5 | ||||
| Sales total, MEUR | 481.6 | 519.9 | -7.4 | 908.9 | 1,015.8 | -10.5 | 1,992.6 | 2,099.6 |
| EBITDA excluding restructuring costs, MEUR | 32.7 | 28.3 | 15.6 | 57.8 | 61.6 | -6.2 | 150.8 | 154.6 |
| EBITDA excluding restructuring costs, % | 6.8% | 5.4% | 6.4% | 6.1% | 7.6% | 7.4% | ||
| Operating profit excluding restructuring costs, MEUR | 21.6 | 17.2 | 25.4 | 37.2 | 40.3 | -7.7 | 112.3 | 115.5 |
| Operating margin excluding restructuring costs, % | 4.5% | 3.3% | 4.1% | 4.0% | 5.6% | 5.5% | ||
| EBITDA, MEUR | 31.9 | 28.3 | 12.5 | 56.5 | 57.6 | -1.8 | 139.5 | 140.5 |
| EBITDA, % | 6.6% | 5.4% | 6.2% | 5.7% | 7.0% | 6.7% | ||
| Operating profit, MEUR | 20.7 | 17.2 | 20.3 | 35.9 | 36.1 | -0.4 | 84.4 | 84.5 |
| Operating margin, % | 4.3% | 3.3% | 4.0% | 3.5% | 4.2% | 4.0% | ||
| Profit before taxes, MEUR | 17.1 | 15.8 | 8.3 | 29.8 | 31.3 | -4.9 | 74.0 | 75.5 |
| Net profit for the period, MEUR | 11.7 | 11.1 | 5.6 | 20.4 | 22.0 | -7.2 | 47.8 | 49.4 |
| Earnings per share, basic, EUR | 0.20 | 0.19 | 4.2 | 0.35 | 0.38 | -8.3 | 0.82 | 0.85 |
| Earnings per share, diluted, EUR | 0.20 | 0.19 | 4.4 | 0.35 | 0.38 | -8.1 | 0.82 | 0.85 |
| Gearing, % | 64.7% | 63.0% | 42.1% | |||||
| Return on capital employed % | 11.3% | 11.6% | ||||||
| Free cash flow, MEUR | 30.1 | -48.3 | -2.5 | -26.7 | 88.1 | 64.0 | ||
| Average number of personnel during the period | 11,879 | 12,056 | -1.5 | 11,987 | ||||
President and CEO Pekka Lundmark:
“I am pleased with the order intake in the second quarter that clearly exceeded EUR 500 million. This was a much-needed recovery after three quarters of orders at EUR 400–450 million, which kept the delivery volumes low in the first half of 2014. Despite the fact that the sales in the second quarter were EUR 38 million lower than last year, operating profit, excluding restructuring costs, increased by EUR 4.4 million. This was due to a good project execution, higher gross margin in both service and equipment businesses, and lower fixed costs.
Even though the operating profit, excluding restructuring costs, of EUR 21.6 million improved both compared to the second quarter last year and the first quarter this year, we are naturally not at all satisfied with the absolute amount. First, we are not going to limit out cost-reduction efforts to the already implemented measures. Still more can be done with product costs as well as fixed cost efficiency. Second, we target volume growth. The second-quarter order intake was promising, but one good quarter is not enough. The launches of several new products this year are one key tool for us to increase volume, alongside continuously strengthening efforts to improve sales management.”
DISCLOSURE PROCEDURE
Konecranes follows the disclosure procedure enabled by Standard 5.2b published by the Finnish Financial Supervision Authority. This stock exchange release is a summary of Konecranes Plc’s January-June 2014 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 the restaurant Savoy’s Salikabinetti (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 dated July 4, 2014 for the conference call details.
NEXT REPORT
Konecranes’ January-September 2014 interim report will be published on October 22, 2014.
KONECRANES PLC
Miikka Kinnunen
Director, Investor Relations
FOR FURTHER INFORMATION, PLEASE CONTACT:
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 2013, Group sales totaled EUR 2,100 million. The Group has 11,900 employees at 600 locations in 48 countries. Konecranes is listed on the NASDAQ OMX Helsinki (symbol: KCR1V).
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NASDAQ OMX Helsinki
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