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© 2010 Konecranes Plc. All rights reserved. October 21,2010 Pekka Lundmark, President and CEO Teo Ottola, CFO 1 Q3 2010 INTERIM REPORT.

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Presentation on theme: "© 2010 Konecranes Plc. All rights reserved. October 21,2010 Pekka Lundmark, President and CEO Teo Ottola, CFO 1 Q3 2010 INTERIM REPORT."— Presentation transcript:

1 © 2010 Konecranes Plc. All rights reserved. October 21,2010 Pekka Lundmark, President and CEO Teo Ottola, CFO 1 Q3 2010 INTERIM REPORT

2 © 2010 Konecranes Plc. All rights reserved. HIGHLIGHTS OF Q3/10 Positives –Key macroeconomic indicators continued to point to a recovery –Improving new equipment demand –Improved EBIT margin in Equipment thanks to higher volume, successful cost savings, favorable product mix, FX tailwind Negatives –New equipment orders still relatively low in developed markets –Continued price competition especially in standard equipment 2

3 © 2010 Konecranes Plc. All rights reserved. CAPACITY UTILIZATION: EU27 AND USA 3 SOURCES: Eurostat, Federal Reserve Bank of St. Louis

4 © 2010 Konecranes Plc. All rights reserved. CONTAINER TRAFFIC 4 SOURCES: Drewry Container Annual 2009/2010, Drewry Freight Shipper Insight Annual container handling volumeMonthly container handling volume

5 © 2010 Konecranes Plc. All rights reserved. MARKET OUTLOOK AND FINANCIAL GUIDANCE AS OF OCT 21, 2010 The demand for maintenance services is expected to continue to be above last year’s level due to higher capacity utilization within customer industries The demand for new equipment is expected to remain robust in Asia- Pacific and in emerging markets in general while customers’ decision- making is still conditional on the sustainability of economic growth in western Europe and North America Price competition to remain  Financial guidance unchanged  Growing demand will support our sales and profitability already during the second half of 2010  However, due to the low first half year sales we expect full year 2010 sales to be lower than in 2009  Operating profit in 2010 expected to be lower than in 2009 before restructuring costs 5

6 © 2010 Konecranes Plc. All rights reserved. COMBINATION OF ORGANIC AND ACQUISITIVE GROWTH 6 1.Our main strategy is to grow organically 2.In M&A, our first priority are bolt-on acquisitions 3.We also keep an open mind towards larger M&A

7 © 2010 Konecranes Plc. All rights reserved. ACQUISITIONS IN 2010 Five MTS companies: two in Denmark and in the UK, one in the US Crane service and MTS company in France Purchase of 22% of shares in Kito  Capex on acquisitions and investments in associated companies EUR 35.1 million in January-September  Acquisitive impact approximately 4% on orders and 3% on sales in January-September 7

8 © 2010 Konecranes Plc. All rights reserved. ACQUISITION OF INDIAN WMI CRANES One of the leading suppliers of heavy-duty cranes in India Development of offering in India, adds in India to supply and sourcing network, enhances service business in India Acquisition in two phases within a year, maximum price approx. EUR60m Net sales of EUR30m, order book of more than EUR50m, good order prospects Approximately 350 people and additionally contracted workforce of about 600 persons 8 *Closing subject to regulatory approvals

9 © 2010 Konecranes Plc. All rights reserved. Q3/2010 GROUP ORDERS AND NET SALES Orders: 373.4 (308.5) MEUR, +21.0% | Net sales: 393.6 (368.7) MEUR, +6.8% 9

10 © 2010 Konecranes Plc. All rights reserved. Q3/2010 GROUP EBIT & MARGIN EBIT: 34.3 (24.0) MEUR, +42.5% | Margin: 8.7% (6.5%), excluding restructuring costs 10

11 © 2010 Konecranes Plc. All rights reserved. 1-9/2010 GROUP ORDERS RECEIVED 1 058.3 (987.7) MEUR, +7.1% 11

12 © 2010 Konecranes Plc. All rights reserved. GROUP ORDER BOOK September 30, 2010 679.7 (638.4) MEUR, +6.5% 12

13 © 2010 Konecranes Plc. All rights reserved. 1-9/2010 GROUP NET SALES 1 076.9 (1 242.4) MEUR, -13.3% 13

14 © 2010 Konecranes Plc. All rights reserved. 1-9/2010 GROUP EBIT & MARGIN EBIT: 69.2 (91.6) MEUR | MARGIN: 6.4% (7.4%), excluding restructuring costs 14

15 © 2010 Konecranes Plc. All rights reserved. SALES SPLIT BY BUSINESS AREA AND REGION (R12M) 15 59%41% 17% 30%54% R12M 1,506 MEUR (FY 2009 1,671) R12M 1,506 MEUR (FY 2009 1,671) (56)(29) (16) (63)(37)

16 © 2010 Konecranes Plc. All rights reserved. ROCE % RETURN ON CAPITAL EMPLOYED 16 24.3 17.8 10.8 17.2 29.5 46.2* 56.3 19.3 18.8 13.7 *The 2007 ROCE including capital gain was 50.4%

17 © 2010 Konecranes Plc. All rights reserved. SERVICE 17

18 © 2010 Konecranes Plc. All rights reserved. SERVICE: Q3/2010 ORDERS AND NET SALES Orders: 152.4 (124.5) MEUR, +22.4% | Net sales: 173.2 (157.6) MEUR, +9.9% 18 New orders grew in all regions and business units

19 © 2010 Konecranes Plc. All rights reserved. SERVICE: Q3/2010 EBIT AND MARGIN EBIT: 14.6 (13.9) MEUR | MARGIN: 8.4% (8.8%), excluding restructuring costs 19 Streamlining costs of EUR 1.5 million in Q3/10

20 © 2010 Konecranes Plc. All rights reserved. SERVICE CONTRACT BASE September 30, 2010 377 (371) thousand units, +1.6% | annual value 146.6 (122.6) MEUR, +19.6% 20

21 © 2010 Konecranes Plc. All rights reserved. SERVICE ORDER BOOK September 30, 2010 111.7 (88.1) MEUR, +26.8% 21

22 © 2010 Konecranes Plc. All rights reserved.22 EQUIPMENT

23 © 2010 Konecranes Plc. All rights reserved. EQUIPMENT: Q3/2010 ORDERS AND NET SALES Orders: 240.0 (205.9) MEUR, +16.5% | Net sales: 252.6 (233.5) MEUR, +8.2% 23 Order intake rose in EMEA and APAC, but fell in the Americas due to low port crane orders New orders increased in all business units except Port Cranes

24 © 2010 Konecranes Plc. All rights reserved. EQUIPMENT: Q3/2010 EBIT AND MARGIN EBIT: 22.0 (14.0) MEUR | MARGIN: 8.7% (6.0%), excluding restructuring costs 24 EBIT margin improved due to higher volume, cost savings, sales mix and currencies

25 © 2010 Konecranes Plc. All rights reserved. EQUIPMENT ORDER BOOK September 30, 2010 585.6 (565.6) MEUR, +3.5% 25

26 © 2010 Konecranes Plc. All rights reserved. BALANCE SHEET AND CASH FLOW 26

27 © 2010 Konecranes Plc. All rights reserved. Q3/2010 NET WORKING CAPITAL 183.3 (211.1) MEUR | 12.2% (11.2%) of sales 27

28 © 2010 Konecranes Plc. All rights reserved. CASH FLOW BEFORE FINANCING ACTIVITIES 28 110.3 -28.6 44.1 35.4 6.9 -30.4 179.1 70.2 181.8 2.3 16.6 36.2 MEUR capex on acquisitions and investments in associated companies

29 © 2010 Konecranes Plc. All rights reserved. Q3/2010 GEARING Equity: 415.7 (389.1) MEUR | Net debt: 0.7 (-14.9) MEUR | Gearing: 0.2% (-3.8%) 29

30 © 2010 Konecranes Plc. All rights reserved. APPENDIXES 30

31 © 2010 Konecranes Plc. All rights reserved. STATEMENT OF INCOME 31 Q3 2010 MEUR Q3 2009 MEUR % Change Sales393.6368.76.8 Other operating income0.80.4 Depreciation and impairments-7,8-7.4 Other operating expenses-352,3-351.5 Operating profit34.310.2236.8 Share of associates’ and joint ventures’ result0.3-0.7 Financial income and expenses-1.8-2.3 Profit before taxes32.77.2354.8 Taxes-9.7-3.0 Net profit for the period23.04.2442.8

32 © 2010 Konecranes Plc. All rights reserved. BALANCE SHEET 32 MEUR September 30, 2010 September 30, 2009 MEUR September 30, 2010 September 30, 2009 Non-current assets338.1256.3Equity415.7389.1 Inventories279.6303.0 Non-current liabilities 114.493.5 Other current assets 419.8400.5Provisions53.254.9 Cash and cash equivalents 103.388.5Current liabilities557.4510.9 Total assets1 140.71 048.4 Total equity and liabilities 1 140.71 048.4

33 © 2010 Konecranes Plc. All rights reserved. CASH FLOW STATEMENT 33 MEURQ3 2010Q3 2009 Operating income before change in net working capital41.217.2 Change in net working capital-2.957.4 Financing items and taxes-6.3-8.4 Net cash from operating activities32.166.2 Cash flow from investing activities-10.9-9.2 Cash flow before financing activities21.257.0 Proceeds from options exercised and share issues0.00.2 Change of interest-bearing debt-6.3-64.2 Net cash used in financing activities-6.3-64.0 Translation differences in cash-6.7-1.4 Change of cash and cash equivalents8.2-8.4 Cash and cash equivalents at beginning of period95.196.9 Cash and cash equivalents at end of period103.388.5 Change of cash and cash equivalents8.2-8.4

34 © 2010 Konecranes Plc. All rights reserved. KEY FIGURES 34 Q3 2010 MEUR Q3 2009 MEUR % Change Sales393.6368.76.8 Operating profit (EBIT), including restructuring costs34.310.2236.8 Profit before taxes32.77.2354.8 Net profit for the period23.04.2442.8 Cash flow from operating activities32.166.2-51.6 Cash flow from operating activities per share (EUR)0.541.12-51.7 Interest bearing net debt0.7-14.9-105.0 Gearing (%)0.2-3.8-105.3 Solidity (%)42.943.7-1.8 Return on capital employed (%), (R12M)18.832.7-42.5 Return on equity (%), (R12M)14.826.7-44.6 Equity per share (EUR)6.976.595.8 Investments total (excl. acquisitions)11.313.9-18.3 Personnel at end of period9 7959 4194.0 Personnel on average during the period9 6779 720-0.4

35 © 2010 Konecranes Plc. All rights reserved. THE LARGEST SHAREHOLDERS 35 Trading information Listing: NASDAX OMX Helsinki Date of listing: March 27, 1996 Segment: Large Cap Sector: Industrials Trading code: KCR1V 1-9/10 average daily trading volume 379,831 shares, EUR 8.6 million Market cap > EUR 1 billion Largest shareholders on September 30, 2010Nr of shares % of all shares 1 Htt 2 Holding Oy Ab6,215,56810.02% 2 Gustavson Stig, Chairman of the Board of Konecranes 2,038,4903.29% 3 Varma Mutual Pension Insurance Company2,005,2753.23% 4 Nordstjernan Ab1,380,0242.23% 5 Ilmarinen Mutual Pension Insurance Company1,295,8912,09% 6 Nordea Funds1,187,9901.92% 7 Sigrid Juselius Foundation638,5001,03% 8 Folkhälsan non-governmental organization Svenska Finland Rf 535,6000,86% 9 KCR Management Oy517,6960.84% 10 The State Pension Fund500,0000.81% Konecranes’ treasury shares2,524,7604.07% Nominee registered shares28,575,00646.09% Other shareholders14,587,32023.52% Total number of shares62,002,120100,00% 36.1% 13.2% 4.6% 46.1% *) *) According to the flagging notification on September 8, 2010 BlackRock Inc. holds 6,271,713 (10.2%) Konecranes shares.

36 © 2010 Konecranes Plc. All rights reserved. CONTACT INFORMATION 36 Pekka Lundmark, President and CEO Tel. +358 (0)20 427 2000 pekka.lundmark@konecranes.com Teo Ottola, Chief Financial Officer Tel.+358 (0)20 427 2040 teo.ottola@konecranes.com teo.ottola@konecranes.com Miikka Kinnunen, Director, Investor Relations Tel. +358 (0)20 427 2050 miikka.kinnunen@konecranes.com Anna-Mari Kautto, Assistant, Investor Relations Tel. +358 (0)20 427 2960 anna-mari.kautto@konecranes.com anna-mari.kautto@konecranes.com www.konecranes.com

37 © 2010 Konecranes Plc. All rights reserved. THANK YOU! 37


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