Konecranes provides recast segment results for 2016 reflecting new financial reporting structure
Following the MHPS acquisition, Konecranes will report three business areas: Service, Industrial Equipment and Port Solutions as of January 1, 2017. The figures provided below include recast segment results for 2016 reflecting the company's new financial reporting and organizational structure.
The new Business Area Service includes only the operations relating to industrial service and component parts. The new Business Area Industrial Equipment includes the operations relating to industrial cranes and components. The new Business Area Port Solutions comprises all port cranes and lift trucks operations including service and parts businesses relating thereto. Earlier, Konecranes reported two segments: Business Area Service and Business Area Equipment. The previous Business Area Service included all service and parts operations of Konecranes.
In addition to the new reporting segments, Konecranes will present adjusted EBITA as a new Alternative Performance Measure (Alternative Performance Measure (APM) is a financial measure other than financial measure defined or specified in IFRS). Adjusted EBITA is defined as adjusted operating profit + amortization of the fair value adjustments identified in the Purchase Price Allocation (PPA) of acquisitions. Konecranes’ management believes that the adjusted EBITA is relevant to understanding the comparable financial performance when comparing the result for the current period with the previous periods.
Recast Konecranes historical segment financial information
The following tables include a recasting of Konecranes' historical financial results, on an unaudited basis for all four of the quarters of 2016 separately, as well as for full year 2016. The segment information in the summary financial statements and notes of the financial reports will include the following recast comparison figures.
| RECAST HISTORICAL SEGMENT INFORMATION, UNAUDITED | |||||
| EUR million | |||||
| Orders received by Business Area | Q1/2016 | Q2/2016 | Q3/2016 | Q4/2016 | Q1-Q4/2016 |
| Service1 | 182.8 | 190.9 | 175.1 | 179.0 | 727.9 |
| Industrial Equipment | 210.7 | 218.1 | 191.6 | 201.0 | 821.5 |
| Port Solutions | 69.7 | 117.5 | 91.4 | 254.8 | 533.4 |
| ./. Internal | -38.1 | -46.4 | -37.9 | -39.8 | -162.2 |
| Total | 425.1 | 480.2 | 420.3 | 595.1 | 1,920.7 |
| 1Excl. Service Contract Base | |||||
| Order book by Business Area | Q1/2016 | Q2/2016 | Q3/2016 | Q4/2016 | |
| Service | 166.2 | 177.3 | 177.9 | 158.1 | |
| Industrial Equipment | 419.6 | 429.3 | 426.7 | 399.4 | |
| Port Solutions | 449.8 | 436.7 | 383.0 | 480.5 | |
| Total | 1,035.6 | 1,043.3 | 987.7 | 1,038.0 | |
| Sales by Business Area | Q1/2016 | Q2/2016 | Q3/2016 | Q4/2016 | Q1-Q4/2016 |
| Service | 209.1 | 231.0 | 220.3 | 254.3 | 914.8 |
| Industrial Equipment | 187.5 | 210.3 | 199.1 | 233.1 | 830.1 |
| Port Solutions | 102.3 | 132.4 | 145.5 | 163.0 | 543.2 |
| ./. Internal | -40.3 | -44.9 | -47.4 | -37.1 | -169.7 |
| Total | 458.6 | 528.8 | 517.6 | 613.3 | 2,118.4 |
| Adjusted EBITA by Business Area | Q1/2016 | Q2/2016 | Q3/2016 | Q4/2016 | Q1-Q4/2016 |
| Service | 16.0 | 25.6 | 23.5 | 35.1 | 100.2 |
| Industrial Equipment | -1.8 | 2.2 | 6.7 | 8.5 | 15.7 |
| Port Solutions | 5.9 | 14.3 | 13.5 | 16.7 | 50.5 |
| Group costs and eliminations | -4.4 | -5.1 | -4.9 | -7.2 | -21.5 |
| Total | 15.8 | 37.0 | 38.9 | 53.1 | 144.8 |
| Adjusted EBITA margin by Business Area | Q1/2016 | Q2/2016 | Q3/2016 | Q4/2016 | Q1-Q4/2016 |
| Service | 7.7 % | 11.1 % | 10.7 % | 13.8 % | 11.0 % |
| Industrial Equipment | -0.9 % | 1.1 % | 3.4 % | 3.6 % | 1.9 % |
| Port Solutions | 5.8 % | 10.8 % | 9.3 % | 10.3 % | 9.3 % |
| Group adjusted EBITA margin total | 3.4 % | 7.0 % | 7.5 % | 8.7 % | 6.8 % |
| Operating profit (EBIT) by Business Area | Q1/2016 | Q2/2016 | Q3/2016 | Q4/2016 | Q1-Q4/2016 |
| Service | 15.1 | 24.0 | 19.1 | 32.1 | 90.2 |
| Industrial Equipment | -5.3 | -0.6 | 5.0 | 6.7 | 6.0 |
| Port Solutions | 5.5 | 13.9 | 13.1 | 16.4 | 49.0 |
| Group costs and eliminations | -15.0 | -8.7 | -12.3 | -24.2 | -60.3 |
| Total | 0.3 | 28.6 | 25.0 | 31.0 | 84.9 |
| Reconciliation of adjusted EBITA | Q1/2016 | Q2/2016 | Q3/2016 | Q4/2016 | Q1-Q4/2016 |
| Adjusted EBITA | 15.8 | 37.0 | 38.9 | 53.1 | 144.8 |
| Purchase price allocation amortization | -1.0 | -1.0 | -1.0 | -1.0 | -4.0 |
| Adjusted Operating profit (EBIT) | 14.8 | 36.0 | 37.9 | 52.1 | 140.8 |
| Transaction costs | -10.7 | -11.5 | -7.9 | -16.9 | -47.0 |
| Restructuring costs | -3.8 | -5.9 | -5.4 | -4.2 | -19.2 |
| Insurance indemnity and returned funds related to identity theft | 0.0 | 10.0 | 0.3 | -0.1 | 10.2 |
| Operating profit (EBIT) | 0.3 | 28.6 | 25.0 | 31.0 | 84.9 |
Comparable combined company segment financial information
To provide a basis for comparison, the following tables present comparable combined company segment financial information on an unaudited basis estimated by the management for all four quarters of 2016 separately, as well as for full year 2016. This financial information has been prepared to reflect the financial results of the combined company as if it had been operating as such for the full financial year of 2016. The comparable combined company’s operations comprise Konecranes’ operations without the divested STAHL CraneSystems business, but including the acquired MHPS business. See “Basis of preparation” for further information.
Combined financial information concerns an assumed situation and does not therefore reflect the true financial position or result of the company during the period presented.
| COMPARABLE COMBINED COMPANY SEGMENT INFORMATION, UNAUDITED EUR million | |||||
| Orders received by Business Area | Q1/2016 | Q2/2016 | Q3/2016 | Q4/2016 | Q1-Q4/2016 |
| Service1 | 250.6 | 258.3 | 243.5 | 244.8 | 997.3 |
| Industrial Equipment | 275.6 | 300.8 | 275.9 | 296.7 | 1 148.9 |
| Port Solutions | 171.4 | 249.7 | 203.0 | 421.1 | 1 045.2 |
| ./. Internal | -35.3 | -43.4 | -34.8 | -36.7 | -150.2 |
| Total | 662.3 | 765.4 | 687.7 | 925.8 | 3,041.2 |
| 1Excl. Service Contract Base | |||||
| Order book by Business Area2 | Q1/2016 | Q2/2016 | Q3/2016 | Q4/2016 | |
| Service | 211.9 | 226.1 | 227.2 | 200.3 | |
| Industrial Equipment | 530.1 | 550.2 | 555.1 | 540.9 | |
| Port Solutions | 755.6 | 761.8 | 685.6 | 766.4 | |
| Total | 1,497.5 | 1,538.1 | 1,467.9 | 1,507.7 | |
| 2MHPS' order book includes deliveries for the next 12 months only. | |||||
| Sales by Business Area | Q1/2016 | Q2/2016 | Q3/2016 | Q4/2016 | Q1-Q4/2016 |
| Service | 280.2 | 304.1 | 295.5 | 334.3 | 1 214.1 |
| Industrial Equipment | 253.4 | 282.8 | 275.2 | 319.4 | 1 130.8 |
| Port Solutions | 220.3 | 242.0 | 277.6 | 351.6 | 1 091.4 |
| ./. Internal | -37.5 | -41.7 | -44.5 | -34.2 | -158.0 |
| Total | 716.4 | 787.3 | 803.8 | 971.0 | 3,278.4 |
| Adjusted EBITA by Business Area | Q1/2016 | Q2/2016 | Q3/2016 | Q4/2016 | Q1-Q4/2016 |
| Service | 27.2 | 37.7 | 37.4 | 51.1 | 153.4 |
| Industrial Equipment | -13.8 | -4.9 | 3.0 | 9.6 | -6.1 |
| Port Solutions | 0.0 | 13.8 | 10.2 | 28.7 | 52.7 |
| Group costs and eliminations | -4.8 | -4.0 | -3.6 | -3.6 | -16.0 |
| Total | 8.7 | 42.6 | 47.1 | 85.7 | 184.1 |
| Adjusted EBITA margin by Business Area | Q1/2016 | Q2/2016 | Q3/2016 | Q4/2016 | Q1-Q4/2016 |
| Service | 9.7 % | 12.4 % | 12.7 % | 15.3 % | 12.6 % |
| Industrial Equipment | -5.4 % | -1.7 % | 1.1 % | 3.0 % | -0.5 % |
| Port Solutions | 0.0 % | 5.7 % | 3.7 % | 8.2 % | 4.8 % |
| Group adjusted EBITA margin total | 1.2 % | 5.4 % | 5.9 % | 8.8 % | 5.6 % |
Basis of preparation
The comparable combined financial information is based on management’s estimates and is for illustrative purposes only. The combined financial information gives an indication of the combined company's key figures assuming the activities were included in the same company from the beginning of 2016.
The comparable combined financial information is based on a hypothetical situation and should not be viewed as pro forma financial information as differences in accounting principles have not been taken into account. The unaudited combined financial information presented above is based on Konecranes Group’s financial statements for the financial year 2016 (adjusted for restructuring costs, transaction costs and received insurance indemnity) according to IFRS and Terex Corporations’s (“Terex”) MHPS segment unaudited special purpose carve-out financial information for the financial year 2016 (adjusted for non-recurring items such as restructuring costs and impairments of goodwill and trademarks) according to USGAAP. The corporation allocations of Terex Group have been adjusted in MHPS income statement to illustrate the situation as the Group had been combined at the beginning of 2016.
As the financial information for MHPS has been prepared on a carve-out basis, this does not necessarily reflect what its results of operations would have been, had MHPS operated as an independent company and had it presented stand-alone financial information under IFRS during the period presented. Moreover, the carve-out financial information may not be indicative of MHPS’s future performance of the operative activities aggregated within Konecranes.
Konecranes is unable to present a reconciliation of the combined financial information as MHPS’ financials have been calculated according to USGAAP and using different accounting principles than Konecranes and as Terex has categorized MHPS as a discontinued operation in 2016.
KONECRANES PLC
Miikka Kinnunen
Vice President, Investor Relations
FURTHER INFORMATION
Mr. Miikka Kinnunen, Vice President, Investor Relations, tel. +358 20 427 2050
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 of all makes. The Group has 18,000 employees at 600 locations in 50 countries. Konecranes class A shares are listed on the Nasdaq Helsinki (symbol: KCR).
DISTRIBUTION
Nasdaq Helsinki
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