KONECRANES PLC’S INTERIM REPORT JANUARY-SEPTEMBER 2014
KONECRANES PLC INTERIM REPORT October 22, 2014 at 9:00 a.m.
PROFITABILITY CONTINUED TO IMPROVE DESPITE LOWER SALES, 2014 SALES GUIDANCE SOMEWHAT LOWER, EBIT GUIDANCE UNCHANGED
Figures in brackets, unless otherwise stated, refer to the same period a year earlier
THIRD QUARTER HIGHLIGHTS
- Order intake EUR 427.4 million (412.9), +3.5 percent; Service +5.1 percent and Equipment -0.9 percent.
- Order book EUR 1,026.2 million (1,018.9) at end-September, 0.7 percent higher than a year ago, 0.4 percent lower than at end-June 2014.
- Sales EUR 494.4 million (502.9), -1.7 percent; Service +5.0 percent and Equipment -7.9 percent.
- Operating profit excluding restructuring costs EUR 34.8 million (32.4), 7.0 percent of sales (6.4).
- Restructuring costs EUR 0.3 million (23.6).
- Operating profit EUR 34.5 million (8.8), 7.0 percent of sales (1.7).
- Earnings per share (diluted) EUR 0.43 (0.09).
- Net cash flow from operating activities EUR 64.8 million (40.7).
- Net debt EUR 200.4 million (246.3) and gearing 46.4 percent (57.4).
JANUARY-SEPTEMBER HIGHLIGHTS
- Order intake EUR 1,390.2 million (1,498.6), -7.2 percent; Service -0.0 percent and Equipment -11.7 percent.
- Sales EUR 1,403.2 million (1,518.7), -7.6 percent; Service -0.8 percent and Equipment -12.4 percent.
- Operating profit excluding restructuring costs EUR 72.0 million (72.7), 5.1 percent of sales (4.8).
- Restructuring costs EUR 1.6 million (27.9).
- Operating profit EUR 70.4 million (44.8), 5.0 percent of sales (3.0).
- Earnings per share (diluted) EUR 0.77 (0.47).
- Net cash flow from operating activities EUR 82.0 million (40.6).
MARKET OUTLOOK
European customers have become increasingly cautious about investing. The Purchasing Managers’ Indexes are giving a reason for the continued optimism regarding the U.S. market. The near-term market outlook in emerging markets still remains uncertain. Continued contract base growth bodes well for the future of the service business.
NEW FINANCIAL GUIDANCE
The sales in 2014 are expected to be somewhat lower than in 2013. We expect the 2014 operating profit, excluding restructuring costs, to be approximately at the same level or to improve slightly from 2013.
PREVIOUS 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 | Third quarter | January-September | ||||||
| 7-9/ 2014 | 7-9/2013 | Change % | 1-9/2014 | 1-9/2013 | Change % | R12M | 2013 | |
| Orders received, MEUR | 427.4 | 412.9 | 3.5 | 1,390.2 | 1,498.6 | -7.2 | 1,812.5 | 1,920.8 |
| Order book at end of period, MEUR | 1,026.2 | 1,018.9 | 0.7 | 893.5 | ||||
| Sales total, MEUR | 494.4 | 502.9 | -1.7 | 1,403.2 | 1,518.7 | -7.6 | 1,984.1 | 2,099.6 |
| EBITDA excluding restructuring costs, MEUR | 45.7 | 40.7 | 12.3 | 103.5 | 102.3 | 1.2 | 155.8 | 154.6 |
| EBITDA excluding restructuring costs, % | 9.2% | 8.1% | 7.4% | 6.7% | 7.9% | 7.4% | ||
| Operating profit excluding restructuring costs, MEUR | 34.8 | 32.4 | 7.5 | 72.0 | 72.7 | -0.9 | 114.8 | 115.5 |
| Operating margin excluding restructuring costs, % | 7.0% | 6.4% | 5.1% | 4.8% | 5.8% | 5.5% | ||
| EBITDA, MEUR | 45.3 | 33.1 | 37.0 | 101.9 | 90.7 | 12.4 | 151.7 | 140.5 |
| EBITDA, % | 9.2% | 6.6% | 7.3% | 6.0% | 7.6% | 6.7% | ||
| Operating profit, MEUR | 34.5 | 8.8 | 293.3 | 70.4 | 44.8 | 57.0 | 110.1 | 84.5 |
| Operating margin, % | 7.0% | 1.7% | 5.0% | 3.0% | 5.5% | 4.0% | ||
| Profit before taxes, MEUR | 36.1 | 8.3 | 335.1 | 65.9 | 39.6 | 66.3 | 101.8 | 75.5 |
| Net profit for the period, MEUR | 24.7 | 5.3 | 362.5 | 45.1 | 27.3 | 65.1 | 67.2 | 49.4 |
| Earnings per share, basic, EUR | 0.43 | 0.09 | 369.8 | 0.78 | 0.47 | 64.6 | 1.16 | 0.85 |
| Earnings per share, diluted, EUR | 0.43 | 0.09 | 369.7 | 0.77 | 0.47 | 64.8 | 1.15 | 0.85 |
| Gearing, % | 46.4% | 57.4% | 42.1% | |||||
| Return on capital employed % | 15.6% | 11.6% | ||||||
| Free cash flow, MEUR | 55.9 | 28.9 | 53.3 | 2.2 | 115.2 | 64.0 | ||
| Average number of personnel during the period | 11,905 | 12,026 | -1.0 | 11,987 | ||||
President and CEO Pekka Lundmark:
“Our result continued to develop in the right direction in the third quarter. As in the previous quarter, our operating profit improved in spite of lower sales. Unfortunately, we are behind last year in sales by EUR 115 million after three quarters, but the cumulative operating profit excluding restructuring costs is very close to that of 2013. The year has been uneven between our two businesses. Service business continued its steady profitability improvement. We have every reason to be pleased with the 11% operating margin in the quarter. The equipment business coped reasonably with the lack of volume and produced a decent result, albeit still behind our targets.
We target growth in both equipment and service businesses, but it seems that we cannot expect much help from the general market conditions. We are working on both our product portfolio and the efficiency of our operations, especially in the equipment business. We are renewing our offering for both advanced and standard customer needs in all product and service categories. Two important products for the standard need segment, a new industrial crane model and a new wire rope hoist were launched during the quarter, and there is more to come. We are also simplifying our operational model in the equipment business to add clarity and to enable further improvements in cost efficiency.”
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 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 on October 6, 2014 for the conference call details.
NEXT REPORT
Konecranes’ Financial Statements Bulletin 2014 will be published on February 4, 2015.
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 12,000 employees at 600 locations in 48 countries. Konecranes is listed on the Nasdaq Helsinki (symbol: KCR1V).
DISTRIBUTION
Nasdaq Helsinki
Media
www.konecranes.com