2007-10-31 09:00:00 CET
2007-10-31 09:00:00 CET
REGULATED INFORMATION
Konecranes Oyj - Quarterly report
KONECRANES PLC: JANUARY - SEPTEMBER 2007 INTERIM REPORT
KONECRANES PLC: JANUARY - SEPTEMBER 2007 INTERIM REPORT
- Third consecutive all time high order intake quarter: 25.6 % growth to 506.4
(Q3/06: 403.4) MEUR
- Q3 Net Sales up 10 % to 424.4 (385.8) MEUR
- Q3 EBIT: 45.5 (31.2) MEUR, and EBIT margin 10.7 (8.1) %
- Rolling 12-month return on capital employed 42.0 (26.6) %
- Gearing decreased to 22.4 (Q3/06:75.8) %
- Outlook: Q4 Sales are expected to clearly exceed both Q3/2007 and Q4/2006.
2007 sales growth is expected to be somewhat below 20%, with improved
profitability. The 2007 EBIT margin is expected to be close to or to slightly
exceed 9.5 percent, excluding the 17,6 MEUR capital gain on the sale of real
estate.
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| | | Third quarter | | First 9 months | LY |
--------------------------------------------------------------------------------
| EUR million | 7-9/ | 7-9/ | Change | 1-9/ | 1-9/ | Change | 2006 |
| | 2007 | 2006 | % | 2007 | 2006 | % | |
--------------------------------------------------------------------------------
| SALES | | | | | | | |
--------------------------------------------------------------------------------
| Service | 156.3 | 136.6 | 14.4 | 455.7 | 365.1 | 24.8 | 526.6 |
--------------------------------------------------------------------------------
| Standard | 177.6 | 153.2 | 15.9 | 491.8 | 398.9 | 23.3 | 558.4 |
| Lifting | | | | | | | |
--------------------------------------------------------------------------------
| Heavy Lifting | 118.5 | 125.3 | -5.4 | 361.4 | 328.1 | 10.1 | 490.8 |
--------------------------------------------------------------------------------
| Internal Sales | -28.1 | -29.2 | | -81.9 | -69.7 | | -93.3 |
--------------------------------------------------------------------------------
| Sales total | 424.4 | 385.8 | 10.0 | 1 | 1 | 20.0 | 1 |
| | | | | 227.0 | 022.4 | | 482.5 |
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| Operational | 45.5 | 31.2 | 46.0 | 114.4 | 66.2 | 72.8 | 105.5 |
| profit | | | | | | | |
--------------------------------------------------------------------------------
| Operational | 10.7 | 8.1 % | | 9.3 % | 6.5 % | | 7.1 % |
| profit margin | % | | | | | | |
--------------------------------------------------------------------------------
| Gain on the | | | | 17.6 | | | |
| sale of real | | | | | | | |
| estate | | | | | | | |
--------------------------------------------------------------------------------
| Operating | 45.5 | 31.2 | 46.0 | 131.9 | 66.2 | 99.4 | 105.5 |
| profit (EBIT) | | | | | | | |
--------------------------------------------------------------------------------
| EBIT margin | 10.7 | 8.1 % | | 10.8 % | 6.5 % | | 7.1 % |
| | % | | | | | | |
--------------------------------------------------------------------------------
| Share of result | 0.4 | 0.1 | | 0.7 | 0.4 | | 0.7 |
| of associates | | | | | | | |
| and joint | | | | | | | |
| ventures | | | | | | | |
--------------------------------------------------------------------------------
| Interests, net | -2.5 | -2.9 | | -7.3 | -7.4 | | -9.5 |
--------------------------------------------------------------------------------
| Other financial | -1.8 | 0.5 | | -3.4 | -0.8 | | -1.6 |
| income and | | | | | | | |
| expenses | | | | | | | |
--------------------------------------------------------------------------------
| Profit before | 41.5 | 28.9 | 43.6 | 121.9 | 58.5 | 108.5 | 95.1 |
| taxes | | | | | | | |
--------------------------------------------------------------------------------
| Taxes | -12.0 | -8.7 | | -35.4 | -17.6 | | -26.5 |
--------------------------------------------------------------------------------
| Net profit for | 29.5 | 20.3 | 45.7 | 86.6 | 40.9 | 111.5 | 68.6 |
| the period | | | | | | | |
--------------------------------------------------------------------------------
| Earnings per | 0.49 | 0.35 | | 1.45 | 0.70 | | 1.17 |
| share, basic | | | | | | | |
| (EUR) | | | | | | | |
--------------------------------------------------------------------------------
| Earnings per | 0.48 | 0.34 | | 1.43 | 0.69 | | 1.15 |
| share, diluted | | | | | | | |
| (EUR) | | | | | | | |
--------------------------------------------------------------------------------
| ORDERS RECEIVED | | | | | | | |
--------------------------------------------------------------------------------
| Service | 138.7 | 117.9 | 17.6 | 425.1 | 326.1 | 30.4 | 448.5 |
--------------------------------------------------------------------------------
| Standard | 201.7 | 157.2 | 28.3 | 597.4 | 455.1 | 31.3 | 592.7 |
| Lifting | | | | | | | |
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| Heavy Lifting | 195.4 | 150.9 | 29.5 | 465.4 | 390.4 | 19.2 | 519.2 |
--------------------------------------------------------------------------------
| Internal Orders | -29.3 | -22.7 | | -86.9 | -66.2 | | -87.7 |
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| Orders received | 506.4 | 403.4 | 25.6 | 1401.0 | 1 | 26.8 | 1 |
| Total | | | | | 105.3 | | 472.8 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Order Book at | 794.8 | 681.9 | 16.6 | 794.8 | 681.9 | 16.6 | 571.6 |
| end of period | | | | | | | |
--------------------------------------------------------------------------------
Pekka Lundmark, President & CEO comments:
“We have once again every reason to be satisfied with the quarter we are
reporting. General market conditions remained strong, and we were able to book,
for the first time in the company's history, orders worth over half a billion
euros in one quarter.
This gives a solid base for continued growth in 2008. Demand continues to be
geographically well balanced. Asia-Pacific had the strongest relative growth in
orders, but the two higher volume regions, i.e. Americas, and Europe, Middle
East & Africa also posted good growth figures.
The 10.7 % operating margin in the third quarter boosted the rolling 12-month
margin to 9.1 %, already close to our published 10 % target. This would not have
been possible without a scalable business model that enables cost efficient
capacity ramp up.
Both Service and Standard Lifting now have a structure where costs grow more
slowly than sales. Standard Lifting's 23 % sales growth in the first three
quarters of the year was achieved with a personnel increase of only 2 %. In
Service, we have increased capacity by adding 522 service technicians to our
organization in the last 12 months. The total number of technicians is now
3,082. This is a real competitive advantage: our industry's largest service
team, ready to take advantage of the industry mega trend of customers
continuously looking for new outsourcing opportunities. Fixed costs in Service
are growing more slowly than sales.
The nature of the Heavy Lifting business is more volatile, with wider quarterly
fluctuations than in the two other businesses. While we cannot be satisfied with
Heavy Lifting's result in Q3, we note that Heavy Lifting has generated an EBIT
of EUR 18.4 million in the first three quarters of the year. Capital employed in
this business remained at a low level, and the return on capital matched that of
Standard Lifting.”
Summary of Konecranes' financial performance in the third quarter of 2007:
Overall, strong demand for Konecranes' products and services continued.
Konecranes posted record-high order intake for the third consecutive quarter
with growth of 25.6 % to EUR 506.4 million. Orders increased in all Business
Areas, and growth was well balanced between the geographical regions.
Consolidated third quarter net sales increased by 10 percent in comparison to
the corresponding period last year. The Business Areas Service and Standard
Lifting posted double-digit sales growth. Heavy Lifting's third quarter sales
were somewhat lower, because of the timing of certain large project deliveries
and the availability of components from some key suppliers.
Capacity constraints and component bottlenecks also dampened the growth somewhat
in Standard Lifting. The key constraint in Service growth continues to be the
availability of service technicians.
The third quarter EBIT margin was 10.7 % compared to 8.1 % in the third quarter
of 2006. Volume growth and higher efficiency were the main contributors to the
profitability improvement. Price increases offset higher cost of labor, raw
material and components. The profitability improvement in Service and Standard
Lifting was strong. Due to the project-oriented nature of the business, the
profit generation in Heavy Lifting is more volatile than in the other two
businesses. Third quarter EBIT was lower than in the previous year, due to lower
sales and higher than expected costs in certain process crane projects. However,
due to high capital efficiency, return on capital employed in Heavy Lifting on a
rolling 12-month basis matched that of Standard Lifting.
Higher EBIT margins in combination with efficient capital management boosted
return on capital employed to 42.0 (26.6)% and return on equity to 47.5 (34.7) %
on a rolling twelve-month basis. Gearing decreased to 22.4 % compared with 75.8
% for the corresponding period last year and 39.3 % at the end of the second
quarter 2007.
Outlook for 2007
The scheduled equipment and service deliveries are expected to boost Q4/2007
sales well over sales in Q3/2007 and also Q4/2006. Total year 2007 sales growth
is expected to be somewhat below 20 %, with improved profitability.
The 2007 Group EBIT margin is expected to be close to or to slightly exceed 9.5
percent excluding the 17.6 MEUR capital gain on the sale of real estate.
Konecranes' main risks regarding 2007 sales and profitability are the
availability and prices of certain subcontracted components.
Interim Report January-September 2007
Change in Reporting Method
Due to changes in the Business Area reporting method described below, the sales,
orders and operating profit comparison figures in this report deviate from the
figures reported in 2006 for the Business Areas Service and Standard Lifting.
The aggregate and Heavy Lifting figures are not affected.
As of January 1, 2007, Konecranes-branded spare parts are reported in the
Service Business Area, while they were earlier partly included in Service and
partly in Standard Lifting. The 2006 quarterly comparison figures for Service
and Standard Lifting according to the new reporting structure are presented in
the table below.
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| | Q1 2006 | Q2 2006 | Q3 2006 | Q4 2006 |
--------------------------------------------------------------------------------
| Service | | | | |
--------------------------------------------------------------------------------
| Orders received, MEUR | 99.8 | 108.3 | 117.9 | 122.5 |
--------------------------------------------------------------------------------
| Net sales, MEUR | 105.6 | 122.9 | 136.6 | 161.4 |
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| Operating income, MEUR | 8.7 | 12.3 | 14.4 | 17.6 |
--------------------------------------------------------------------------------
| Operating margin, % | 8.2 | 10.0 | 10.5 | 10.9 |
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| Standard Lifting | | | | |
--------------------------------------------------------------------------------
| Orders received, MEUR | 142.6 | 155.3 | 157.2 | 137.7 |
--------------------------------------------------------------------------------
| Net sales, MEUR | 114.0 | 131.7 | 153.2 | 159.5 |
--------------------------------------------------------------------------------
| Operating income, MEUR | 8.0 | 12.0 | 15.3 | 16.2 |
--------------------------------------------------------------------------------
| Operating margin, % | 7.0 | 9.1 | 10.0 | 10.2 |
--------------------------------------------------------------------------------
In addition, the geographical segment reporting structure has been changed from
the beginning of 2007. The new geographical segments are Europe, Middle East,
Africa (EMEA), Americas (AME) and Asia-Pacific (APAC). The earlier structure was
Nordic and Eastern Europe, EU (excl. Nordic), Americas, and Asia-Pacific. The
2006 quarterly sales comparison figures according to the new geographical
segmentation are presented in the table below.
--------------------------------------------------------------------------------
| | Q1 2006 | Q2 2006 | Q3 2006 | Q4 2006 |
--------------------------------------------------------------------------------
| EMEA | 170.1 | 195.3 | 187.9 | 227.8 |
--------------------------------------------------------------------------------
| AME | 90.1 | 105.8 | 148.0 | 168.5 |
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| APAC | 36.6 | 38.8 | 50.0 | 63.8 |
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| Total | 296.7 | 339.9 | 385.8 | 460.1 |
--------------------------------------------------------------------------------
The restated 2006 APAC sales figures differ from the figures reported in 2006 as
sales in Africa and the Middle East have been shifted from APAC to EMEA.
Group Structure
MMH Holdings, Inc was consolidated into the Konecranes Group figures as of 1
June, 2006. Therefore, the comparison figures for January-September 2006 include
MMH only for the period June-September. MMH accounted for roughly 6 percentage
points of the reported 20 percent sales growth and the 27 percent order growth
for January-September 2007. Approximately 60 percent of MMH's sales and orders
are included in the Service Business Area, and the remainder is fairly evenly
split between Standard Lifting and Heavy Lifting.
Acquisitions
During the first half year in 2007, Konecranes made four business acquisitions.
The most important of these was the acquisition of a straddle carrier
manufacturer in Germany, Consens Transport Systeme. In January, Konecranes also
acquired the maintenance service business of a small Swedish-based company,
El&Travers. In March, Konecranes made an asset purchase agreement with Spanish
company Sistemas de Elevación, operating in the field of port service. In June,
Konecranes signed an agreement to acquire 19 percent of the share capital of the
crane manufacturing company Dynamic Crane Systems Ltd (DCS) in South Africa. The
agreement includes an option to acquire the remaining shares in the company at a
later stage.
During the third quarter, Konecranes made four acquisitions. Finnish container
handling software specialist Savcor One Oy was acquired in July. During July,
Konecranes also strengthened its position in the machine tool service (MTS)
business by acquiring two MTS companies in Scandinavia, Reftele Maskinservice AB
in Sweden and Kongsberg Automation AS in Norway. The fourth acquisition was an
agreement to acquire the port service business of the Italian company Technical
Services S.r.l.
Market Review
Overall, market demand for Konecranes' products and services remained strong
during the third quarter. Demand improved in all geographical regions and in
almost all customer industries.
Continued high investment activity in the general manufacturing customer segment
supported strong growth in standard lifting equipment across all geographical
regions. Booming shipyard investments contributed to stronger demand,
particularly in the Asia-Pacific region. Port demand continued at a high level,
and Konecranes benefited from the high investment activity in Russia. High raw
material prices supported activity in the mining, primary metals, and metal
warehousing customer segments. Konecranes also benefited from strong demand for
process cranes in Russia. The high oil price and energy shortages in many parts
of the world resulted in continued strong order activity in the power and
petrochemicals industries. There was no major change in the demand from the
paper and automotive industries, which remained at a low level.
Orders Received, Order Book and Contract Base
The third quarter order intake rose 25.6 percent to an all time high of EUR
506.4 (Q3 2006: 403.4) million, with acquisitions contributing less than three
percentage points. Combined with the favorable order intake achieved in the
first half of 2007, this increased the January-September order intake by 26.8
percent to EUR 1,401.0 (1-9 2006: 1,105.3) million. Strong demand, a broader
geographical presence, and a competitive product range contributed to the very
strong order growth. Order intake increased in all geographical regions and
Business Areas. Heavy Lifting's order intake rose considerably versus the second
quarter of 2007. A few large orders for port and shipyard equipment combined
with strong overall order intake raised orders to a record-high level.
Orders Received by Business Areas, MEUR
--------------------------------------------------------------------------------
| | Q3 2007 | Q3 2006 | Change | 1-9 2007 | 1-9 2006 | Change |
| | | | percen | | | percent |
| | | | t | | | |
--------------------------------------------------------------------------------
| Service | 138.7 | 117.9 | +17.6 | 425.1 | 326.1 | +30.4 |
--------------------------------------------------------------------------------
| Standard | 201.7 | 157.2 | +28.3 | 597.4 | 455.1 | +31.3 |
| Lifting | | | | | | |
--------------------------------------------------------------------------------
| Heavy Lifting | 195.4 | 150.9 | +29.5 | 465.4 | 390.4 | +19.2 |
--------------------------------------------------------------------------------
| Internal | -29.3 | -22.7 | | -86.9 | -66.2 | |
--------------------------------------------------------------------------------
| Total | 506.4 | 403.4 | +25.6 | 1401.0 | 1105.3 | +26.8 |
--------------------------------------------------------------------------------
The value of the order backlog at the end of September was EUR 794.8 (end of
September 2006: 681.9) million. The order backlog rose 16.6 percent year-on-year
and 39.0 percent from the end of 2006.
The order book increased in all Business Areas. The Standard Lifting order book
continued to increase because of the high order intake growth. Heavy Lifting's
strong order intake in the third quarter resulted in a significant increase in
the order book compared to the end of the second quarter.
The Service contract base continued to show solid growth, in terms of both units
and value. At the end of September 2007, there were 287,460 (Q3/2006: 259,141)
cranes and hoists included in the annual maintenance contract base, for a value
of nearly EUR 104 million.
Order Book by Business Areas, MEUR
--------------------------------------------------------------------------------
| | Sept 2007 | Sept 2006 | Change | Dec 31,2006 |
| | | | percent | |
--------------------------------------------------------------------------------
| Service | 122.8 | 119.9 | 2.4 | 101.1 |
--------------------------------------------------------------------------------
| Standard Lifting | 267.7 | 202.7 | 32.1 | 174.6 |
--------------------------------------------------------------------------------
| Heavy Lifting | 434.3 | 413.6 | 5.0 | 349.9 |
--------------------------------------------------------------------------------
| Internal | -29.9 | -54.3 | | -53.9 |
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| Total | 794.8 | 681.9 | 16.6 | 571.6 |
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Sales
Third quarter net sales rose 10 percent to EUR 424.4 (385.8) million. Sales
growth was the result of both higher volumes and prices. Acquisitions had only a
marginal impact on sales growth. The summer holiday period had the usual
negative seasonal effect on sales and production output. Sales rose clearly in
the Europe, Middle East and Africa region. Sales in the Americas decreased from
the high level in the corresponding period last year, due to lower deliveries of
port equipment and the weaker USD/EUR rate. Sales in the Asia-Pacific region
were roughly at the same level as in the third quarter of 2006. Net sales in
January-September rose 20 percent to EUR 1,227.0 (1,022.4) million.
Third quarter Service sales were supported by growth in the service contract
base, and by the strong order growth in the first half of 2007. The need for
additional service personnel is limiting sales growth in Service.
Third quarter sales growth continued at a high level in Standard Lifting because
of strong market demand and a competitive product offering. Capacity constraints
limited sales growth in Standard Lifting.
Heavy Lifting's third quarter sales were somewhat lower than in the
corresponding period last year, because of the timing of certain large project
deliveries and the availability of components from some key suppliers.
Net Sales by Business Area, MEUR
--------------------------------------------------------------------------------
| | Q3 2007 | Q3 2006 | Change | 1-9 2007 | 1-9 | Change |
| | | | percen | | 2006 | percent |
| | | | t | | | |
--------------------------------------------------------------------------------
| Service | 156.3 | 136.6 | 14.4 | 455.7 | 365.1 | 24.8 |
--------------------------------------------------------------------------------
| Standard | 177.6 | 153.2 | 15.9 | 491.8 | 398.9 | 23.3 |
| Lifting | | | | | | |
--------------------------------------------------------------------------------
| Heavy Lifting | 118.5 | 125.3 | -5.4 | 361.4 | 328.1 | 10.1 |
--------------------------------------------------------------------------------
| Internal | -28.1 | -29.3 | | -81.9 | -69.7 | |
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| Total | 424.4 | 385.8 | 10.0 | 1 227.0 | 1 022.4 | 20.0 |
--------------------------------------------------------------------------------
Net Sales by Region, MEUR
--------------------------------------------------------------------------------
| | Q3 2007 | Q3 2006 | Change | 1-9 2007 | 1-9 | Change |
| | | | percen | | 2006 | percent |
| | | | t | | | |
--------------------------------------------------------------------------------
| EMEA | 238.6 | 187.9 | 27.0 | 653.8 | 553.2 | 18.2 |
--------------------------------------------------------------------------------
| AME | 135.4 | 148.0 | -8.5 | 430.2 | 343.8 | 25.1 |
--------------------------------------------------------------------------------
| APAC | 50.4 | 50.0 | 0.8 | 143.0 | 125.3 | 14.1 |
--------------------------------------------------------------------------------
| Total | 424.4 | 385.8 | 10.0 | 1 227.0 | 1022.4 | 20.0 |
--------------------------------------------------------------------------------
Profitability
The Group's third quarter operating income (EBIT) rose to EUR 45.5 (31.2)
million, representing 10.7 (8.1) percent of sales. Higher volumes were the main
driver of the improved margin. Increased productivity continued to improve
profitability. Changes in currency exchange rates had a slight negative impact
on operating income. Unallocated Group costs decreased to 1.4 (1.5) percent of
sales.
On April 30, 2007, Konecranes finalized the sale of properties located in
Hyvinkää, Hämeenlinna and Urjala, Finland. The aggregate sales price was EUR
31.4 million. As a result of the transaction, a capital gain of EUR 17.6 million
has been booked in the second quarter Group EBIT, representing EUR 13.0 million
after taxes. To facilitate an evaluation of the profitability development
disregarding this capital gain, Operational EBIT is reported separately in this
section. The segmentation information tables include the Business Area profits,
both including and excluding this capital gain.
Group EBIT in January-September amounted to EUR 131.9 (66.2) million, including
the capital gain of EUR 17.6 million booked in the second quarter Excluding the
capital gain, EBIT amounted to EUR 114.4 (66.2) million, representing 9.3 (6.5)
percent of sales.
Service's third quarter EBIT margin rose to 13.6 (10.5) percent. Higher volumes
and increased productivity continued to be the main drivers of the improvement.
Standard Lifting's third quarter EBIT margin rose to 15.8 (10.0) percent. Higher
volumes were the main reason for Standard Lifting's improvement, as fixed costs
increased significantly less than sales. Both stronger market demand and a
higher market share contributed to higher volumes. Improved productivity and
cost-competitiveness boosted profitability. The high proportion of component
sales also contributed to the improvement. The impact of higher input costs was
offset by price increases.
Due to the project-oriented nature of the business, the quarterly margins in
Heavy Lifting are clearly more volatile than in the other businesses. Third
quarter EBIT margin was lower than in the previous year (3.8 vs. 6.6 percent),
due to lower sales and higher than expected costs in certain process crane
projects. However, due to high capital efficiency, return on capital employed in
Heavy Lifting on a rolling 12-month basis was roughly on the same level as in
Standard Lifting.
Operational EBIT and margin (excluding capital gain in Q2) by Business Area
--------------------------------------------------------------------------------
| | Q3 | % of | Q3 | % of | 1-9 | % of | 1-9 | % of |
| | 2007 | sale | 2006 | sale | 2007 | sales | 2006 | sale |
| | MEUR | s | MEUR | s | MEUR | | MEUR | s |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Service | 21.3 | 13.6 | 14.4 | 10.5 | 54.4 | 11.9 | 35.4 | 9.7 |
--------------------------------------------------------------------------------
| Standard | 28.0 | 15.8 | 15.3 | 10.0 | 69.5 | 14.1 | 35.2 | 8.8 |
| Lifting | | | | | | | | |
--------------------------------------------------------------------------------
| Heavy | 4.5 | 3.8 | 8.3 | 6.6 | 18.4 | 5.1 | 19.5 | 6.0 |
| Lifting | | | | | | | | |
--------------------------------------------------------------------------------
| ./. Group | -5.9 | -1.4 | -5.8 | -1.5 | -24.6 | -2.0 | -22.0 | -2.2 |
| overheads | | | | | | | | |
--------------------------------------------------------------------------------
| ./. | -2.3 | | -1.0 | | -3.3 | | -1.9 | |
| Elimination | | | | | | | | |
| of internal | | | | | | | | |
| profit | | | | | | | | |
--------------------------------------------------------------------------------
| Total | 45.5 | 10.7 | 31.2 | 8.1 | 114.4 | 9.3 | 66.2 | 6.5 |
--------------------------------------------------------------------------------
January-September EBITDA was EUR 149.7 (81.8) million, including the capital
gain of EUR 17.6 million, or 12.2 (7.0) percent of sales. Depreciations amounted
to EUR 17.8 (15.6) million. The increase in depreciations was mainly
attributable to the growth of operations.
The share of associated companies' result amounted to EUR 0.7 (0.4) million.
Group interest costs (the net of interest income and expenses) were EUR 7.3
(7.4) million.
Group income after financing items was EUR 121.9 (58.5) million. Income taxes
were EUR 35.4 (17.5) million, corresponding to an effective tax rate of
approximately 29 percent for the year.
Group net income was EUR 86.6 (40.9) million. Basic earnings per share totaled
EUR 1.45 (0.70), and diluted earnings per share were EUR 1.43 (0.69).
On a rolling twelve-month basis, return on capital employed was 42.0 (26.6)
percent, and return on equity 47.5 (34.7) percent.
Group costs
January-September unallocated Group overhead costs were EUR 24.6 (22.0) million,
representing 2.0 (2.2) percent of net sales. These costs consist mainly of
common development costs (personnel, R&D, systems), treasury and legal
functions, development of the company structure (M&A), and Group management and
administration.
Cash flow and balance sheet
January-September cash flow from operations before financing items and taxes was
EUR 126.7 (76.6) million, or EUR 2.12 (1.32) per share. Net working capital
amounted to EUR 215.8 (Q3/06:205.4) million. This represents 12.8 (15.8) percent
of the latest twelve-month sales.
Cash flow from financing items and taxes in January-September was EUR -40.1
(-17.8) million. Net cash flow from operating activities was EUR 86.6 (58.8)
million, representing EUR 1.45 (1.01) per share.
Cash flow from capital expenditures, including acquisitions and divestitures,
amounted to EUR 2.0(-57.9) million. The cash flow from the sale of real estate
is included in this figure. The cash-based capital expenditures in fixed assets
were EUR 15.8 (9.3) million. Of this, EUR 4.1 (2.0) million was booked in the
third quarter.
The parent company paid EUR 26.7 (15.8) million in dividends in the first
quarter.
Interest-bearing debt was EUR 122.9 (202.4) million. Interest-bearing net debt
was EUR 64.2 (147.0) million. Gearing decreased to 22.4 (75.8) percent. The
Solidity (equity) ratio was 35.4 (25.7) percent and the current ratio was 1.4
(1.3).
The Group has a EUR 200 million committed back-up financing facility to secure
running liquidity. At the end of the third quarter, EUR 56.4 (end-2006: 100.9)
million was in use.
Exchange rate impact and sensitivity
Changes in currency exchange rates had a slight negative effect on reported
third quarter figures. Currency hedging absorbed part of the impact of the
stronger euro. The strengthening of the euro rate will have a more significant
negative impact in the fourth quarter.
The annual negative impact of a one percent weakening of the USD/EUR rate is
roughly one million euro in pre-tax profits. This includes both transactional
and translation effects.
The consolidation exchange rates of some important currencies for the Group
developed as follows:
The period end rates:
--------------------------------------------------------------------------------
| | Q3 2007 | Q3 2006 | Change percent |
--------------------------------------------------------------------------------
| USD | 1.4179 | 1.266 | -10.71 |
--------------------------------------------------------------------------------
| CAD | 1.4122 | 1.4136 | 0.10 |
--------------------------------------------------------------------------------
| GBP | 0.6968 | 0.6777 | -2.74 |
--------------------------------------------------------------------------------
| CNY | 10.6429 | 10.007 | -5.98 |
--------------------------------------------------------------------------------
| SGD | 2.1066 | 2.0076 | -4.70 |
--------------------------------------------------------------------------------
| SEK | 9.2147 | 9.2797 | 0.71 |
--------------------------------------------------------------------------------
| NOK | 7.7185 | 8.235 | 6.69 |
--------------------------------------------------------------------------------
| AUD | 1.6073 | 1.6992 | 5.72 |
--------------------------------------------------------------------------------
The period average rates:
--------------------------------------------------------------------------------
| | Q3 2007 | Q3 2006 | Change percent |
--------------------------------------------------------------------------------
| USD | 1.3443 | 1.2447 | -7.41 |
--------------------------------------------------------------------------------
| CAD | 1.4838 | 1.4094 | -5.01 |
--------------------------------------------------------------------------------
| GBP | 0.6764 | 0.6845 | 1.20 |
--------------------------------------------------------------------------------
| CNY | 10.2990 | 9.968 | -3.21 |
--------------------------------------------------------------------------------
| SGD | 2.0492 | 1.989 | -2.94 |
--------------------------------------------------------------------------------
| SEK | 9.2369 | 9.2938 | 0.62 |
--------------------------------------------------------------------------------
| NOK | 8.0624 | 7.975 | -1.08 |
--------------------------------------------------------------------------------
| AUD | 1.6371 | 1.6643 | 1.66 |
--------------------------------------------------------------------------------
The Group continued its currency hedging policy in order to minimize currency
risk relating to non-euro nominated export and import from or to the euro zone.
Hedging was mainly carried out through currency forward exchange transactions.
Capital expenditure
January-September capital expenditure, excluding acquisitions, was EUR 18.1
(10.5) million. Third quarter capital expenditure was EUR 5.3 (3.0) million.
This expenditure consisted mainly of replacement or capacity expansion
investments on machines, equipment and information technology. January-September
capital expenditure in acquisitions was EUR 17.2 (64.1) million.
Personnel and personnel development
At the end of September, the Group employed 8,284 (7,444) persons. The average
number of personnel was 7,905 (6,687) in January-September 2007. Since the end
of June 2007, the number of employees increased by 301, of which approximately
half were service technicians.
Personnel by Business Area, end of period
--------------------------------------------------------------------------------
| | Q3 2007 | Q3 2006 | Change percent |
--------------------------------------------------------------------------------
| Service | 4,390 | 3,873 | 13.3 |
--------------------------------------------------------------------------------
| Standard Lifting | 2,412 | 2,362 | 2.1 |
--------------------------------------------------------------------------------
| Heavy Lifting | 1,269 | 1,046 | 21.3 |
--------------------------------------------------------------------------------
| Group Staff | 213 | 163 | 30.7 |
--------------------------------------------------------------------------------
| Total | 8,284 | 7,444 | 11.3 |
--------------------------------------------------------------------------------
Changes in Management
In June, Mr. Teo Ottola (MSc) was appointed as Chief Financial Officer (CFO).
His areas of responsibility are business control, accounting, financing and
investor relations. Mr. Ottola is a member of the Konecranes Group Executive
Board. He reports to Pekka Lundmark, President & CEO. Mr. Ottola started in his
new position on 20 August 2007.
After the period under review, Konecranes Group Director, Administration and
Business Development and member of the Group Executive Board, Arto Juosila
informed that he will leave his position to pursue personal interests. Mr
Juosila has worked for Konecranes more than 27 years. Mr Juosila's
responsibilities will initially be divided between existing Executive Board
members.
Sale of Real Estate
Konecranes finalized the sale of properties located in Hyvinkää, Hämeenlinna and
Urjala, Finland, in April, 2007. The Konecranes companies operating in the sold
facilities in Hyvinkää and Hämeenlinna have continued their normal operations in
these facilities under long-term rental agreements.
The aggregate sales price for the facilities was approximately EUR 31.4 million.
Konecranes booked a capital gain of EUR 17.6 million in EBIT on the transaction.
Risks
Konecranes' main risks regarding 2007 sales and profitability are the
availability and prices of certain subcontracted components.
Labor costs and the difficulty to recruit skilled personnel is a cause of some
uncertainty regarding Service's sales and profitability.
Litigations
Konecranes is a party to various litigations and disputes relating to its normal
business in different countries. At the moment, Konecranes does not expect any
of these ongoing litigations or disputes to have a material effect on the
profits or future outlook of the Group.
Incentive Programs and Share Capital
Konecranes has five ongoing stock option plans (1997, 1999, 2001, 2003 and
2007). During the second quarter of 2007, Konecranes distributed 987,500 2007A
options to some 100 key employees in accordance with the authorization given to
the Board of Directors by the Annual General Meeting in March 2007. The options
entitle to subscribe one Konecranes share per option, at the subscription price
of EUR 25.72 (the weighted average share price in April 2007) per share.
The subscription period for the 2007A options is from 2 May, 2009 to 30 April,
2011. In total, the option plans include approximately 340 key employees. The
terms and conditions of the stock option programs are available on the corporate
website at www.konecranes.com.
Pursuant to Konecranes' stock option plans, 125,000 new shares were subscribed
for and registered in the Finnish Trade Register during the third quarter of
2007. Because of the subscriptions, the number of shares increased to
60,791,580. In accordance with the resolution of the AGM, the subscription price
has been booked in its entirety to the paid in capital, and Konecranes' share
capital remained at EUR 30,072,660.
The remaining 1997, 1999B, 2001B, 2003B, 2003C and 2007A stock options at the
end of the accounting period entitle to the subscription of a total of 2,287,240
shares.
Own Shares in the Company's Possession
At the end of September, 2007, Konecranes held 742,600 of the company's own
shares. This corresponds to 1.2 percent of the company's total outstanding
shares and votes. The shares were bought back between February 20 and March 5,
2003.
Shares and trading volume
Konecranes' share price increased by 26.5 percent during January-September 2007,
and closed at EUR 28.21. The period high was EUR 34.90 and period low EUR 20.68.
The volume-weighted average share price during the period was EUR 27.31. In the
same period, the OMX Helsinki Index rose 27.7 percent, the OMX Helsinki Cap
Index 14.5 percent, and the OMX Helsinki Industrials Index 16.5 percent.
At the end of September 2007, Konecranes' total market capitalization was EUR
1,715 million, including own shares in the company's possession, making it the
25th largest company on the Helsinki Stock Exchange.
The trading volume totaled 89.0 million shares, representing a turnover velocity
of 193 percent. Total trading amounted to EUR 2,422 million, which was the 20th
highest on the Helsinki Exchange. The daily average trading volume was 470,954
shares, representing a daily average turnover of EUR 12.8 million.
Flagging notifications
On 19 September, 2007 JPMorgan Chase & Co and its subsidiaries had decreased
their holding to 3 020 039 Konecranes shares, being 4.97 % of the share capital
and voting rights of Konecranes Plc. JPMorgan Chase & Co. and its direct and
indirect subsidiaries were in possession of 5.497 % of the share capital and the
voting rights of Konecranes Plc on 29 March, 2007.
On 10 August, 2007 Fidelity International Limited and its direct and indirect
subsidiaries had increased their holding to 3 211 878 Konecranes shares. This
holding corresponds to 5.29 % of the share capital and voting rights of
Konecranes Plc.
On 26 July, 2007 Fidelity International Limited and its direct and indirect
subsidiaries had decreased their holding to 3 011 708 Konecranes shares. This
holding corresponds to 4.96 % of the share capital and voting rights of
Konecranes Plc. Fidelity International Limited and its direct and indirect
subsidiaries were in possession of 6.89 % of the share capital and the voting
rights of Konecranes Plc on 19 January, 2007.
Outlook for 2007
The scheduled equipment and service deliveries are expected to boost Q4/2007
sales well over sales in Q3/2007 and also Q4/2006. Total year 2007 sales growth
is expected to be somewhat below 20 %, with improved profitability.
The 2007 Group EBIT margin is expected to be close to or to slightly exceed 9.5
percent excluding the 17.6 MEUR capital gain on the sale of real estate.
Konecranes' main risks regarding 2007 sales and profitability are the
availability and prices of certain subcontracted components.
Konecranes Plc
Board of Directors
Disclaimer
Certain statements in this report, which are not historical fact, including,
without limitation those regarding expectations for market growth and
developments, expectations for growth and profitability and statements preceded
by "believes", "expects", "anticipates", "foresees" or similar expressions, are
forward-looking statements. Therefore, they involve risks and uncertainties,
which may cause actual results to materially differ from the results expressed
in such forward-looking statements. Such factors include but are not limited to
the company's own operating factors, industry conditions and general economic
conditions.
Important Orders
Strengthened position in the container crane market in the Baltic Sea area
In July, Konecranes received an order from the Finnish container terminal
operator Steveco Oy for one ship-to-shore (STS) crane with a long-term service
agreement. The crane will be delivered to Steveco's new container terminal in
Vuosaari, Finland, during the fall of 2008.
In September and October, Konecranes signed two contracts to supply two STS
cranes and six RTG (rubber tired gantry) cranes to the cargo terminal OJSC
Petrolesport (PLP) in St. Petersburg, Russia. The cranes will be delivered in
mid-2008. PLP is one of the largest stevedoring companies in the port of St.
Petersburg. The terminal already has six Konecranes cranes in its fleet, one STS
and five RTGs.
In October, Konecranes received orders for five STS cranes and fourteen RTGs to
three container terminals of National Container Company (NCC) in Russia. The
total value of the orders is over EUR 40 million. Delivery will take place
during 2008 and 2009. In 2006 and in the first half of 2007, NCC ordered four
STS cranes for its terminal in St. Petersburg. Konecranes will deliver two of
these at the end of 2007, and two in 2008.
First straddle carrier orders
In July and August, Konecranes received its first orders for the newly launched
straddle carrier. The first order was from the Finnish container terminal
operator Steveco Oy, and comprised three straddle carriers, with a long-term
service agreement.
The second order was from German Eurogate Container Terminal Hamburg GmbH. The
order comprises ten straddle carriers and a service agreement for the warranty
period. Deliveries will take place in February 2008. Eurogate Group is the
largest terminal operator in Europe. The equipment will be delivered to the
Hamburg terminal. This is Konecranes' first crane delivery to Eurogate.
The straddle carriers represent the latest technology on the market, including
new steering and brake systems developed by Konecranes. The cranes have a
lifting capacity of 50 metric tons, and can stack containers 1 over 3 high.
Increasing shipyard investments
Konecranes received orders totaling over EUR 20 million from four South Korean
shipyards in September 2007. Hyundai Samho Heavy Industries Co. Ltd, Samsung
Heavy Industries Co. Ltd, Hanjin Heavy Industries & Construction Co. Ltd, and
Daehan Shipbuilding Co. Ltd. ordered the design, project supervision and
components for eight Goliath gantry cranes. Deliveries are scheduled for spring
2008. The largest of the cranes ordered has a lifting capacity of 1500 metric
tons. All four shipyards already use Konecranes' Goliath gantry cranes, which
can have rail spans of up to 216 meters and lifting heights of up to 98 meters.
RTG orders from Malta Freeport Terminals
In August, Malta Freeport Terminals decided to exercise its option to order ten
RTGs, in addition to the 20 Konecranes RTGs in its fleet. Deliveries will start
in the second quarter of 2008. Malta Freeport Terminals is owned by the CMA CGM
in France, the third largest container shipping company in the world.
Process crane orders to China
Konecranes received orders from several different industry segments in China
during the third quarter. The customers included China Sanbian Holdings Limited,
general manufacturing, Cosma Automotive (Shanghai) Co., Ltd, automotive, Metso
Paper (Guangzhou) Co., Ltd, general manufacturing, and China Everbright
International Co., Ltd, waste to energy.
Active investment in Russian process industries
Konecranes received orders for 17 high-capacity process cranes from Russia in
the third quarter. The customers included the steel mills Ashinskij Steel
Factory and Steelcom.
Energy plant orders in India and Germany
Suzlon Energy in India ordered nine EOT cranes with capacities ranges of 8-130
metric tons and spans of 20-30 meters.
E.O.N. ordered two EOT cranes for its power plant Datteln, Germany
Orders to South East Asia
Mitsubishi Heavy Industries ordered a turbine hall crane for its Muara Karang
Power Pant project in Indonesia.
Asia's largest integrated pulp & paper producer Asia Pulp & Paper placed an
order for a second 120 metric ton crane for its Indah Kiat mill in Sumatra,
Indonesia.
Toshiba Plant Systems & Services ordered two turbine hall cranes for its Nam
Ngum 2 hydro power plant project in Laos.
--------------------------------------------------------------------------------
| CONSOLIDATED STATEMENT OF INCOME - IFRS | | | |
--------------------------------------------------------------------------------
| EUR million | 7-9/ | 7-9/ | 1-9/ | 1-9/ | 1-12/ |
| | 2007 | 2006 | 2007 | 2006 | 2006 |
--------------------------------------------------------------------------------
| Sales | 424.4 | 385.8 | 1 227.0 | 1 022.4 | 1 482.5 |
--------------------------------------------------------------------------------
| Other operating | 0.6 | 0.6 | 19.5 | 1.5 | 2.0 |
| income | | | | | |
--------------------------------------------------------------------------------
| Depreciation and | -5.7 | -5.6 | -17.8 | -15.6 | -22.5 |
| impairments | | | | | |
--------------------------------------------------------------------------------
| Other operating | -373.8 | -349.6 | -1 096.8 | -942.2 | -1 356.5 |
| expenses | | | | | |
--------------------------------------------------------------------------------
| Operating profit | 45.5 | 31.2 | 131.9 | 66.2 | 105.5 |
--------------------------------------------------------------------------------
| Share of result of | 0.4 | 0.1 | 0.7 | 0.4 | 0.7 |
| associates and joint | | | | | |
| ventures | | | | | |
--------------------------------------------------------------------------------
| Financial income and | -4.3 | -2.4 | -10.7 | -8.1 | -11.1 |
| expenses | | | | | |
--------------------------------------------------------------------------------
| Profit before taxes | 41.5 | 28.9 | 121.9 | 58.5 | 95.1 |
--------------------------------------------------------------------------------
| Taxes | -12.0 | -8.7 | -35.4 | -17.5 | -26.5 |
--------------------------------------------------------------------------------
| Net profit for the | 29.5 | 20.3 | 86.6 | 40.9 | 68.6 |
| period | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net profit for the period | | | | |
| attributable to : | | | | |
--------------------------------------------------------------------------------
| Shareholders of the | 29.5 | 20.3 | 86.6 | 40.9 | 68.6 |
| parent company | | | | | |
--------------------------------------------------------------------------------
| Minority interest | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings per share, | 0.49 | 0.35 | 1.45 | 0.70 | 1.17 |
| basic (EUR) | | | | | |
--------------------------------------------------------------------------------
| Earnings per share, | 0.48 | 0.34 | 1.43 | 0.69 | 1.15 |
| diluted (EUR) | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CONSOLIDATED BALANCE SHEET - IFRS | | |
--------------------------------------------------------------------------------
| EUR million | | | |
--------------------------------------------------------------------------------
| ASSETS | 30.09.2007 | 30.09.2006 | 31.12.2006 |
--------------------------------------------------------------------------------
| Non-current assets | | | |
--------------------------------------------------------------------------------
| Goodwill | 58.4 | 59.0 | 54.0 |
--------------------------------------------------------------------------------
| Other intangible assets | 61.1 | 51.4 | 55.0 |
--------------------------------------------------------------------------------
| Property, plant and | 59.4 | 70.2 | 67.5 |
| equipment | | | |
--------------------------------------------------------------------------------
| Advance payments and | 5.1 | 6.9 | 9.6 |
| construction in progress | | | |
--------------------------------------------------------------------------------
| Investments accounted for | 6.7 | 6.4 | 6.3 |
| using the equity method | | | |
--------------------------------------------------------------------------------
| Available-for-sale | 2.4 | 1.6 | 2.1 |
| investments | | | |
--------------------------------------------------------------------------------
| Long-term loans receivable | 1.0 | 0.4 | 0.5 |
--------------------------------------------------------------------------------
| Deferred tax assets | 28.1 | 23.8 | 24.6 |
--------------------------------------------------------------------------------
| Total non-current assets | 222.2 | 219.8 | 219.6 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Current assets | | | |
--------------------------------------------------------------------------------
| Inventories | | | |
--------------------------------------------------------------------------------
| Raw material and semi- | 106.2 | 94.3 | 92.7 |
| manufactured goods | | | |
--------------------------------------------------------------------------------
| Work in progress | 137.2 | 123.3 | 103.5 |
--------------------------------------------------------------------------------
| Advance payments | 25.0 | 19.4 | 30.4 |
--------------------------------------------------------------------------------
| Total inventories | 268.3 | 237.0 | 226.6 |
--------------------------------------------------------------------------------
| Account receivables | 307.9 | 258.1 | 324.2 |
--------------------------------------------------------------------------------
| Loans receivable | 0.3 | 0.2 | 0.2 |
--------------------------------------------------------------------------------
| Other receivables | 23.2 | 24.3 | 27.0 |
--------------------------------------------------------------------------------
| Deferred assets | 90.8 | 100.8 | 76.9 |
--------------------------------------------------------------------------------
| Cash and cash equivalents | 57.3 | 54.8 | 44.4 |
--------------------------------------------------------------------------------
| Total current assets | 747.8 | 675.2 | 699.4 |
--------------------------------------------------------------------------------
| TOTAL ASSETS | 970.1 | 895.0 | 919.0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EQUITY AND LIABILITIES | 30.09.2007 | 30.09.2006 | 31.12.2006 |
--------------------------------------------------------------------------------
| Capital and reserves | | | |
| attributable to the | | | |
| shareholders of the parent | | | |
--------------------------------------------------------------------------------
| Share capital | 30.1 | 29.9 | 30.0 |
--------------------------------------------------------------------------------
| Share premium account | 39.3 | 36.9 | 39.0 |
--------------------------------------------------------------------------------
| Share issues | 0.0 | 0.0 | 0.0 |
--------------------------------------------------------------------------------
| Fair value reserves | 4.2 | 2.4 | 3.7 |
--------------------------------------------------------------------------------
| Translation difference | -9.2 | -3.7 | -5.8 |
--------------------------------------------------------------------------------
| Paid in capital | 5.6 | 0.0 | 0.5 |
--------------------------------------------------------------------------------
| Retained earnings | 130.4 | 87.5 | 87.7 |
--------------------------------------------------------------------------------
| Net profit for the period | 86.6 | 40.9 | 68.6 |
--------------------------------------------------------------------------------
| Total Shareholders' equity | 287.1 | 193.9 | 223.7 |
--------------------------------------------------------------------------------
| Minority interest | 0.1 | 0.1 | 0.1 |
--------------------------------------------------------------------------------
| Total equity | 287.1 | 194.0 | 223.7 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Liabilities | | | |
--------------------------------------------------------------------------------
| Non-current liabilities | | | |
--------------------------------------------------------------------------------
| Interest-bearing | 74.2 | 94.9 | 120.9 |
| liabilities | | | |
--------------------------------------------------------------------------------
| Other long-term | 57.6 | 60.0 | 58.7 |
| liabilities | | | |
--------------------------------------------------------------------------------
| Deferred tax liabilities | 19.9 | 16.8 | 20.0 |
--------------------------------------------------------------------------------
| Total non-current | 151.8 | 171.6 | 199.6 |
| liabilities | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Provisions | 30.5 | 27.6 | 28.2 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Current liabilities | | | |
--------------------------------------------------------------------------------
| Interest-bearing | 48.6 | 107.5 | 52.4 |
| liabilities | | | |
--------------------------------------------------------------------------------
| Advance payments received | 158.7 | 140.4 | 128.9 |
--------------------------------------------------------------------------------
| Progress billings | 2.0 | 2.9 | 7.0 |
--------------------------------------------------------------------------------
| Accounts payable | 98.5 | 94.2 | 113.6 |
--------------------------------------------------------------------------------
| Other short-term | 25.2 | 18.1 | 23.0 |
| liabilities (non-interest | | | |
| bearing) | | | |
--------------------------------------------------------------------------------
| Accruals | 167.6 | 138.7 | 142.5 |
--------------------------------------------------------------------------------
| Total current liabilities | 500.7 | 501.8 | 467.4 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total liabilities | 682.9 | 701.0 | 695.2 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| TOTAL EQUITY AND | 970.1 | 895.0 | 919.0 |
| LIABILITIES | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| KEY FIGURES | 30.09.2007 | 30.09.2006 | 31.12.2006 |
--------------------------------------------------------------------------------
| Gearing % | 22.4 | 75.8 | 57.3 |
--------------------------------------------------------------------------------
| Solidity % | 35.4 | 25.7 | 28.3 |
--------------------------------------------------------------------------------
| Return on capital employed | 42.0 | 26.6 | 29.5 |
| %, Rolling 12 Months | | | |
| (R12M) | | | |
--------------------------------------------------------------------------------
| Return on equity %, | 47.5 | 34.7 | 36.5 |
| Rolling 12 Months (R12M) | | | |
--------------------------------------------------------------------------------
| Equity/share, EUR | 4.78 | 3.29 | 3.77 |
--------------------------------------------------------------------------------
| Current ratio | 1.4 | 1.3 | 1.4 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CONSOLIDATED STATEMENT OF CHANGES IN EQUITY - IFRS | |
--------------------------------------------------------------------------------
| MEUR | Share | Share | Share | Fair | Translatio |
| | capita | premium | issues | value | n |
| | l | account | | Reserves | Difference |
--------------------------------------------------------------------------------
| Balance at 1 January, | 29.0 | 26.5 | 0.0 | -4.9 | -1.2 |
| 2006 | | | | | |
--------------------------------------------------------------------------------
| Option exercised | 0.9 | 10.4 | | | |
--------------------------------------------------------------------------------
| Share issue | | | 0.0 | | |
--------------------------------------------------------------------------------
| Dividend distribution | | | | | |
--------------------------------------------------------------------------------
| Cash flow hedge | | | | 7.4 | |
--------------------------------------------------------------------------------
| Translation difference | | | | | -2.5 |
--------------------------------------------------------------------------------
| Share based payments recognized against | | | |
| equity | | | |
--------------------------------------------------------------------------------
| Minority interest | | | | | |
--------------------------------------------------------------------------------
| Net profit for the | | | | | |
| period | | | | | |
--------------------------------------------------------------------------------
| Balance at | 29.9 | 36.9 | 0.0 | 2.4 | -3.7 |
| 30 September, 2006 | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Balance at 1 January, | 30.0 | 39.0 | 0.0 | 3.7 | -5.8 |
| 2007 | | | | | |
--------------------------------------------------------------------------------
| Option exercised | 0.0 | 0.3 | | | |
--------------------------------------------------------------------------------
| Share issue | | | | | |
--------------------------------------------------------------------------------
| Dividend distribution | | | | | |
--------------------------------------------------------------------------------
| Cash flow hedge | | | | 0.5 | |
--------------------------------------------------------------------------------
| Translation difference | | | | | -3.4 |
--------------------------------------------------------------------------------
| Share based payments | | | |
| recognized against equity | | | |
--------------------------------------------------------------------------------
| Minority interest | | | | | |
--------------------------------------------------------------------------------
| Net profit for the | | | | | |
| period | | | | | |
--------------------------------------------------------------------------------
| Balance at | 30.1 | 39.3 | 0.0 | 4.2 | -9.2 |
| 30 September, 2007 | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| MEUR | | Paid in | Retained | Minority | Total |
| | | Capital | Earnings | interest | Equity |
--------------------------------------------------------------------------------
| Balance at 1 January, | | 0.0 | 102.7 | 0.1 | 152.1 |
| 2006 | | | | | |
--------------------------------------------------------------------------------
| Option exercised | | | | | 11.3 |
--------------------------------------------------------------------------------
| Share issue | | | | | 0.0 |
--------------------------------------------------------------------------------
| Dividend distribution | | | -15.8 | | -15.8 |
--------------------------------------------------------------------------------
| Cash flow hedge | | | | | 7.4 |
--------------------------------------------------------------------------------
| Translation difference | | | | | -2.5 |
--------------------------------------------------------------------------------
| Share based payments | 0.6 | | 0.6 |
| recognized against equity | | | |
--------------------------------------------------------------------------------
| Minority interest | | | | | 0.0 |
--------------------------------------------------------------------------------
| Net profit for the | | | 40.9 | | 40.9 |
| period | | | | | |
--------------------------------------------------------------------------------
| Balance at | | 0.0 | 128.4 | 0.1 | 194.0 |
| 30 September, 2006 | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Balance at 1 January, | | 0.5 | 156.3 | 0.1 | 223.7 |
| 2007 | | | | | |
--------------------------------------------------------------------------------
| Option exercised | | 5.1 | | | 5.5 |
--------------------------------------------------------------------------------
| Share issue | | | | | 0.0 |
--------------------------------------------------------------------------------
| Dividend distribution | | | -26.7 | | -26.7 |
--------------------------------------------------------------------------------
| Cash flow hedge | | | | | 0.5 |
--------------------------------------------------------------------------------
| Translation difference | | | | | -3.4 |
--------------------------------------------------------------------------------
| Share based payments | | | 0.9 | | 0.9 |
| recognized against | | | | | |
| equity | | | | | |
--------------------------------------------------------------------------------
| Minority interest | | | | 0.0 | 0.0 |
--------------------------------------------------------------------------------
| Net profit for the | | | 86.6 | | 86.6 |
| period | | | | | |
--------------------------------------------------------------------------------
| Balance at | | 5.6 | 217.0 | 0.1 | 287.1 |
| 30 September, 2007 | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CONSOLIDATED CASH FLOW STATEMENT | | | |
| - IFRS | | | |
--------------------------------------------------------------------------------
| EUR million | 1-9/2007 | 1-9/2006 | 1-12/2006 |
--------------------------------------------------------------------------------
| Cash flow from operating | | | |
| activities | | | |
--------------------------------------------------------------------------------
| Operating income | 131.9 | 66.2 | 105.5 |
--------------------------------------------------------------------------------
| Adjustments to operating profit | | | |
--------------------------------------------------------------------------------
| Depreciation and impairments | 17.8 | 15.6 | 22.5 |
--------------------------------------------------------------------------------
| Profits and losses on sale of | -17.8 | -0.1 | -0.3 |
| fixed | | | |
| assets | | | |
--------------------------------------------------------------------------------
| Other non-cash items | -0.4 | 0.2 | 2.0 |
--------------------------------------------------------------------------------
| Operating income before chg in net | 131.6 | 81.9 | 129.7 |
| working capital | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Change in interest-free short-term | 4.9 | -20.4 | -69.1 |
| receivables | | | |
--------------------------------------------------------------------------------
| Change in inventories | -41.9 | -56.6 | -48.2 |
--------------------------------------------------------------------------------
| Change in interest-free short-term | 32.1 | 71.7 | 101.9 |
| liabilities | | | |
--------------------------------------------------------------------------------
| Change in net working capital | -4.8 | -5.3 | -15.4 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow from operations before | 126.7 | 76.6 | 114.2 |
| financing items and taxes | | | |
--------------------------------------------------------------------------------
| Interest received | 1.7 | 1.1 | 2.1 |
--------------------------------------------------------------------------------
| Interest paid | -9.1 | -6.4 | -11.5 |
--------------------------------------------------------------------------------
| Other financial income and | -1.7 | -0.8 | -1.4 |
| expenses | | | |
--------------------------------------------------------------------------------
| Income taxes paid | -31.0 | -11.6 | -22.1 |
--------------------------------------------------------------------------------
| Financing items and taxes | -40.1 | -17.8 | -32.8 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net cash from operating activities | 86.6 | 58.8 | 81.4 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow from investing | | | |
| activities | | | |
--------------------------------------------------------------------------------
| Acquisition of Group companies, | -13.5 | -48.6 | -48.3 |
| net of cash | | | |
--------------------------------------------------------------------------------
| Acquisition of shares in | 0.0 | -0.2 | -0.2 |
| associated company | | | |
--------------------------------------------------------------------------------
| Investments in other shares | -0.5 | -0.1 | -0.6 |
--------------------------------------------------------------------------------
| Capital expenditures | -15.8 | -9.3 | -17.1 |
--------------------------------------------------------------------------------
| Proceeds from sale of fixed assets | 31.8 | 0.1 | 1.2 |
--------------------------------------------------------------------------------
| Dividends received | 0.0 | 0.2 | 0.1 |
--------------------------------------------------------------------------------
| Net cash used in investing | 2.0 | -57.9 | -64.8 |
| activities | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow before financing | 88.6 | 0.9 | 16.6 |
| activities | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow from financing | | | |
| activities | | | |
--------------------------------------------------------------------------------
| Proceeds from options exercised | 5.5 | 11.3 | 14.1 |
| and share issues | | | |
--------------------------------------------------------------------------------
| Proceeds from (+), payments of (-) | -49.3 | 62.3 | 88.5 |
| long-term borrowings | | | |
--------------------------------------------------------------------------------
| Proceeds from (+), payments of (-) | -3.5 | -47.1 | -101.8 |
| short-term borrowings | | | |
--------------------------------------------------------------------------------
| Proceeds from (-), payments of (+) | -0.7 | -0.1 | -0.2 |
| short-term receivables | | | |
--------------------------------------------------------------------------------
| Dividends paid | -26.7 | -15.8 | -15.8 |
--------------------------------------------------------------------------------
| Net cash used in financing | -74.7 | 10.6 | -15.2 |
| activities | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Translation differences in cash | -1.0 | -0.7 | -1.0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Change of cash and cash | 13.0 | 10.8 | 0.3 |
| equivalents | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash and cash equivalents at | 44.4 | 44.0 | 44.0 |
| beginning of period | | | |
--------------------------------------------------------------------------------
| Cash and cash equivalents at end | 57.3 | 54.8 | 44.4 |
| of period | | | |
--------------------------------------------------------------------------------
| Change of cash and cash | 13.0 | 10.8 | 0.3 |
| equivalents | | | |
--------------------------------------------------------------------------------
The effect of changes in exchange rates has been eliminated by converting the
beginning balance at the rates current on the last day of the year.
--------------------------------------------------------------------------------
| SEGMENT INFORMATION | | | | | | | |
--------------------------------------------------------------------------------
| 1. BUSINESS | | | | | | | |
| SEGMENTS | | | | | | | |
--------------------------------------------------------------------------------
| EUR million | | | | | | | | |
--------------------------------------------------------------------------------
| Order | 1-9/ | % of | 1-9/ | % of | R12M* | % of | 1-12/ | % of |
| Intakes by | 2007 | tota | 2006 | total | | total | 2006 | total |
| Business | | l | | | | | | |
| Area | | | | | | | | |
--------------------------------------------------------------------------------
| Service 1) | 425.1 | 29 | 326.1 | 28 | 547.6 | 29 | 448.5 | 29 |
| | | | | | | | | |
--------------------------------------------------------------------------------
| Standard | 597.4 | 40 | 455.1 | 39 | 735.1 | 39 | 592.7 | 38 |
| Lifting | | | | | | | | |
--------------------------------------------------------------------------------
| Heavy | 465.4 | 31 | 390.4 | 33 | 594.2 | 32 | 519.2 | 33 |
| Lifting | | | | | | | | |
--------------------------------------------------------------------------------
| ./. | -86.9 | | -66.2 | | -108.4 | | -87.7 | |
| Internal | | | | | | | | |
--------------------------------------------------------------------------------
| Total | 1401. | 100 | 1105. | 100 | 1768.6 | 100 | 1472.8 | 100 |
| | 0 | | 3 | | | | | |
--------------------------------------------------------------------------------
| 1) Excl. | | | | | | | | |
| Service | | | | | | | | |
| Contract | | | | | | | | |
| Base | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Order Book | 30.09 | | 30.09 | | | | 31.12. | |
| total 2) | . | | . | | | | 2006 | |
| | 2007 | | 2006 | | | | | |
--------------------------------------------------------------------------------
| Total | 794.8 | | 681.9 | | | | 571.6 | |
--------------------------------------------------------------------------------
| 2) Percentage of | | | | | | | |
| completion deducted | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Sales by | 1-9/ | % of | 1-9/ | % of | R12M* | % of | 1-12/ | % of |
| Business | 2007 | tota | 2006 | total | | total | 2006 | total |
| Area | | l | | | | | | |
--------------------------------------------------------------------------------
| Service | 455.7 | 35 | 365.1 | 33 | 617.1 | 34 | 526.6 | 33 |
--------------------------------------------------------------------------------
| Standard | 491.8 | 38 | 398.9 | 37 | 651.3 | 36 | 558.4 | 35 |
| Lifting | | | | | | | | |
--------------------------------------------------------------------------------
| Heavy | 361.4 | 28 | 328.1 | 30 | 524.1 | 29 | 490.8 | 31 |
| Lifting | | | | | | | | |
--------------------------------------------------------------------------------
| ./. | -81.9 | | -69.7 | | -105.5 | | -93.3 | |
| Internal | | | | | | | | |
--------------------------------------------------------------------------------
| Total | 1227. | 100 | 1022. | 100 | 1687.1 | 100 | 1482.5 | 100 |
| | 0 | | 4 | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating | 1-9/ | | 1-9/ | | R12M* | | 1-12/ | |
| Profit | 2007 | | 2006 | | | | 2006 | |
| (EBIT) by | | | | | | | | |
| Business | | | | | | | | |
| Area | | | | | | | | |
| without | | | | | | | | |
--------------------------------------------------------------------------------
| gain on the | MEUR | Ebit | MEUR | Ebit | MEUR | Ebit | MEUR | Ebit |
| sale of | | % | | % | | % | | % |
| real estate | | | | | | | | |
--------------------------------------------------------------------------------
| Service | 54.4 | 11.9 | 35.4 | 9.7 | 72.0 | 11.7 | 53.0 | 10.1 |
--------------------------------------------------------------------------------
| Standard | 69.5 | 14.1 | 35.2 | 8.8 | 85.7 | 13.2 | 51.5 | 9.2 |
| Lifting | | | | | | | | |
--------------------------------------------------------------------------------
| Heavy | 18.4 | 5.1 | 19.5 | 6.0 | 32.4 | 6.2 | 33.6 | 6.8 |
| Lifting | | | | | | | | |
--------------------------------------------------------------------------------
| Group costs | -24.6 | | -22.0 | | -34.2 | | -31.6 | |
--------------------------------------------------------------------------------
| Consolidati | -3.3 | | -1.9 | | -2.3 | | -0.9 | |
| on items | | | | | | | | |
--------------------------------------------------------------------------------
| Total | 114.4 | 9.3 | 66.2 | 6.5 | 153.7 | 9.1 | 105.5 | 7.1 |
--------------------------------------------------------------------------------
| *R12M = | | | | | | | | |
| Rolling 12 | | | | | | | | |
| Months | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total | 1-9/ | | 1-9/ | 2006 | R12M* | | 1-12/ | 2006 |
| Operating | 2007 | | | | | | | |
| Profit | | | | | | | | |
| (EBIT) by | | | | | | | | |
| Business | | | | | | | | |
| Area | | | | | | | | |
--------------------------------------------------------------------------------
| | MEUR | Ebit | MEUR | Ebit | MEUR | Ebit | MEUR | Ebit |
| | | % | | % | | % | | % |
--------------------------------------------------------------------------------
| Service | 55.2 | 12.1 | 35.4 | 9.7 | 72.8 | 11.8 | 53.0 | 10.1 |
--------------------------------------------------------------------------------
| Standard | 78.4 | 15.9 | 35.2 | 8.8 | 94.6 | 14.5 | 51.5 | 9.2 |
| Lifting | | | | | | | | |
--------------------------------------------------------------------------------
| Heavy | 26.3 | 7.3 | 19.5 | 6.0 | 40.3 | 7.7 | 33.6 | 6.8 |
| Lifting | | | | | | | | |
--------------------------------------------------------------------------------
| Group costs | -24.6 | | -22.0 | | -34.2 | | -31.6 | |
--------------------------------------------------------------------------------
| Consolidati | -3.3 | | -1.9 | | -2.3 | | -0.9 | |
| on items | | | | | | | | |
--------------------------------------------------------------------------------
| Total | 131.9 | 10.8 | 66.2 | 6.5 | 171.2 | 10.2 | 105.5 | 7.1 |
--------------------------------------------------------------------------------
| *R12M = | | | | | | | | |
| Rolling 12 | | | | | | | | |
| Months | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Personnel | 30.09 | | 30.09 | | | | 31.12. | |
| by Business | . | | . | | | | 2006 | |
| Area | 2007 | | 2006 | | | | | |
--------------------------------------------------------------------------------
| (at the end | | % of | | % of | | | | % of |
| of the | | tota | | total | | | | total |
| Period) | | l | | | | | | |
--------------------------------------------------------------------------------
| Service | 4390 | 53 | 3873 | 52 | | | 3923 | 52 |
--------------------------------------------------------------------------------
| Standard | 2412 | 29 | 2362 | 32 | | | 2333 | 31 |
| Lifting | | | | | | | | |
--------------------------------------------------------------------------------
| Heavy | 1269 | 15 | 1046 | 14 | | | 1131 | 15 |
| Lifting | | | | | | | | |
--------------------------------------------------------------------------------
| Group staff | 213 | 3 | 163 | 2 | | | 162 | 2 |
--------------------------------------------------------------------------------
| Total | 8284 | 100 | 7444 | 100 | | | 7549 | 100 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Average | 7905 | | 6687 | | | | 6859 | |
| number of | | | | | | | | |
| personnel | | | | | | | | |
| during | | | | | | | | |
| period | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 2. GEOGRAPHICAL | | | | | | | |
| SEGMENTS | | | | | | | |
--------------------------------------------------------------------------------
| EUR million | | | | | | | | |
--------------------------------------------------------------------------------
| Sales by | 1-9/ | % of | 1-9/ | % of | R12M* | % of | 1-12/ | % of |
| Market | 2007 | tota | 2006 | total | | total | 2006 | total |
| | | l | | | | | | |
--------------------------------------------------------------------------------
| Europe-Midd | 653.8 | 53.3 | 553.2 | 54 | 881.6 | 52 | 781.0 | 53 |
| le | | | | | | | | |
| East-Africa | | | | | | | | |
| (EMEA) | | | | | | | | |
--------------------------------------------------------------------------------
| Americas | 430.2 | 35.1 | 343.8 | 34 | 598.7 | 35 | 512.3 | 35 |
| (AME) | | | | | | | | |
--------------------------------------------------------------------------------
| Asia-Pacifi | 143.0 | 11.7 | 125.3 | 12 | 206.8 | 12 | 189.1 | 13 |
| c (APAC) | | | | | | | | |
--------------------------------------------------------------------------------
| Total | 1227. | 100. | 1022. | 100 | 1687.1 | 100 | 1482.5 | 100 |
| | 0 | 0 | 4 | | | | | |
--------------------------------------------------------------------------------
NOTES:
--------------------------------------------------------------------------------
| INVESTMENTS | | | |
--------------------------------------------------------------------------------
| EUR million | 1-9/2007 | 1-9/2006 | 1-12/2006 |
--------------------------------------------------------------------------------
| Investments Total (excl. | 18.1 | 10.5 | 16.3 |
| Acquisitions) | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| NET INTEREST BEARING LIABILITIES | | |
--------------------------------------------------------------------------------
| EUR million | 30.09.2007 | 30.09.2006 | 31.12.2006 |
--------------------------------------------------------------------------------
| Long- and short-term interest bearing | -122.9 | -202.4 | -173.3 |
| liabilities | | | |
--------------------------------------------------------------------------------
| Cash and cash equivalents and other | 58.7 | 55.4 | 45.0 |
| interest bearing assets | | | |
--------------------------------------------------------------------------------
| Total | -64.2 | -147.0 | -128.2 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CONTINGENT LIABILITIES AND | | | |
| PLEDGED ASSETS | | | |
--------------------------------------------------------------------------------
| EUR million | 30.09.2007 | 30.09.2006 | 31.12.2006 |
--------------------------------------------------------------------------------
| Contingent liabilities | | | |
--------------------------------------------------------------------------------
| For own debts | | | |
--------------------------------------------------------------------------------
| Mortgages on land and buildings | 0.0 | 5.9 | 0.7 |
--------------------------------------------------------------------------------
| For own commercial obligations | | | |
--------------------------------------------------------------------------------
| Pledged assets | 1.2 | 1.9 | 1.1 |
--------------------------------------------------------------------------------
| Guarantees | 227.9 | 131.7 | 136.3 |
--------------------------------------------------------------------------------
| Other contingent liabilities and | | | |
| financial liabilities | | | |
--------------------------------------------------------------------------------
| Leasing liabilities | | | |
--------------------------------------------------------------------------------
| Next year | 16.0 | 37.6 | 11.1 |
--------------------------------------------------------------------------------
| Later on | 55.4 | 1.1 | 26.0 |
--------------------------------------------------------------------------------
| Other | 1.1 | 0.0 | 1.0 |
--------------------------------------------------------------------------------
| Total | 301.6 | 178.2 | 176.2 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Leasing contracts follow the normal practices in corresponding countries. |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total by category | | | |
--------------------------------------------------------------------------------
| Mortgages on land and buildings | 0.0 | 5.9 | 0.7 |
--------------------------------------------------------------------------------
| Pledged assets | 1.2 | 1.9 | 1.1 |
--------------------------------------------------------------------------------
| Guarantees | 227.9 | 131.7 | 136.3 |
--------------------------------------------------------------------------------
| Other liabilities | 72.5 | 38.7 | 38.1 |
--------------------------------------------------------------------------------
| Total | 301.6 | 178.2 | 176.2 |
--------------------------------------------------------------------------------
Contingent liabilities relating to litigations
Konecranes is party to routine litigation incidental to the normal conduct of
business. In the opinion of management, the outcome of and liabilities in excess
of what has been provided, in the aggregate, are not likely to be material to
the financial condition or results of operations, taking also into account the
insurance arrangements the group has in place.
--------------------------------------------------------------------------------
| NOTIONAL AND FAIR VALUES OF DERIVATIVE FINANCIAL INSTRUMENTS | |
--------------------------------------------------------------------------------
| EUR million | 9/2007 | 9/2007 | 9/2006 | 9/2006 | 12/2006 | 12/2006 |
--------------------------------------------------------------------------------
| | Nomina | Fair | Nomina | Fair | Nominal | Fair |
| | l | value | l | value | value | value |
| | value | | value | | | |
--------------------------------------------------------------------------------
| Foreign exchange | 216.7 | 4.7 | 250.8 | 1.7 | 279.7 | 3.0 |
| forward contracts | | | | | | |
--------------------------------------------------------------------------------
| Electricity | 1.4 | 0.2 | 0.9 | 0.5 | 1.1 | 0.1 |
| derivatives | | | | | | |
--------------------------------------------------------------------------------
| Total | 218.2 | 5.0 | 251.7 | 2.2 | 280.8 | 3.1 |
--------------------------------------------------------------------------------
Derivatives are used for hedging currency and interest rate risks, as well as
the risk of electricity price fluctuations. The Company applies hedge accounting
on the derivatives used to hedge cash flows in Heavy Lifting projects.
ACQUISITIONS
During the first half of 2007, Konecranes made a few smaller business
acquisitions. The most important of these was the acquisition of Straddle
carrier manufacturer in Germany, Consens Transport Systeme. Additionally in
January, Konecranes signed an agreement to acquire the maintenance service
business of a small Swedish-based company, El&Travers. In March, Konecranes made
an asset purchase agreement with the Spanish company Sistemas de Elevación,
operating in the field of port service.
During the third quarter, Konecranes made four acquisitions. On 31 July,
Konecranes acquired the Finnish container-handling software specialist Savcor
One Oy. The company, which is part of the Savcor Group, is based in Vantaa,
Finland, and provides its products and services to more than 20 leading
container ports all over the world. In July 2007, Konecranes strengthened its
position in the machine tool service (MTS) business by acquiring two MTS
companies in Scandinavia, Reftele Maskinservice AB in Sweden and Kongsberg
Automation A/S in Norway. On 31 July, Konecranes signed an agreement to acquire
the port service business of Technical Services S.r.l. in Italy.
The preliminary fair values of the identifiable assets and liabilities of the
acquired businesses at the date of acquisitions are summarized below.
--------------------------------------------------------------------------------
| EUR million | 9/2007 | 9/2007 |
--------------------------------------------------------------------------------
| | Recognized on | Carrying |
| | acquisition | value |
--------------------------------------------------------------------------------
| Intangible assets | 11.2 | 0.6 |
--------------------------------------------------------------------------------
| Tangible assets | 0.6 | 0.6 |
--------------------------------------------------------------------------------
| Deferred tax assets | 0.0 | 0.3 |
--------------------------------------------------------------------------------
| Inventories | 4.8 | 4.7 |
--------------------------------------------------------------------------------
| Receivables and other assets | 1.9 | 1.9 |
--------------------------------------------------------------------------------
| Cash and bank | 1.5 | 1.5 |
--------------------------------------------------------------------------------
| Total assets | 20.0 | 9.6 |
--------------------------------------------------------------------------------
| Liabilities | 5.5 | 3.1 |
--------------------------------------------------------------------------------
| Net assets | 14.5 | 6.5 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Acquisition costs | 17.2 | |
--------------------------------------------------------------------------------
| Goodwill | 2.7 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash outflow on acquisition | | |
--------------------------------------------------------------------------------
| Acquisition costs paid in cash | 17.2 | |
--------------------------------------------------------------------------------
| Cash and cash equivalents of | 1.5 | |
| acquired companies | | |
--------------------------------------------------------------------------------
| Net cash flow arising on acquisition | 15.7 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cost of the business combination | | |
--------------------------------------------------------------------------------
| Acquisition costs paid in cash | 15.1 | |
--------------------------------------------------------------------------------
| Liabilities assumed | 2.1 | |
--------------------------------------------------------------------------------
| Total cost of business combination | 17.2 | |
--------------------------------------------------------------------------------
ACCOUNTING PRINCIPLES
These presented interim financial statements have been prepared in accordance
with IAS 34 Interim Financial Reporting.
Konecranes applies the same accounting policies as were applied in the 2006
annual financial statements, except for the change in Segment reporting.
As of January 1, 2007, Konecranes-branded spare parts are reported in the
Service Business Area, while they were earlier partly included in Standard
Lifting. The geographical Segment reporting structure has also been changed. The
new geographical segments are Europe, Middle East, Africa (EMEA), Americas (AME)
and Asia-Pacific (APAC). The earlier structure was Nordic and Eastern Europe, EU
(excl. Nordic), Americas and Asia-Pacific.
The key figures in this interim financial report are calculated with same
accounting principles than in year 2006 annual financial statements. The
calculation rules of key figures are presented in the financial statements of
the previous year.
The figures presented in the tables below have been rounded to one decimal,
which should be taken into account when reading the sum figures.
The interim report has not been subject to audit.
Events on 31 October, 2007
Analyst and press briefing
A luncheon presentation for media and analysts will be held at Konecranes office
in Helsinki at 12.00 noon Finnish Time (address: Eteläesplanadi 22 B).
Live webcast
A live webcast of the presentation for analysts and media will begin at 12.00
noon Finnish Time and can be followed at www.konecranes.com.
Internet
This report and presentation material is available on the Internet at
www.konecranes.com immediately after publication. A recording of the webcast
will be available on the Internet later on the same day.
Next report
Konecranes 2007 financial Statements will be published on 8 February, 2008 10.00
a.m.
KONECRANES PLC
Paul Lönnfors
IR Manager
FURTHER INFORMATION
Mr Pekka Lundmark, President and CEO, tel. +358-20 427 2000
Mr Teo Ottola, Chief Financial Officer, tel. +358-20 427 2040,
Mr Paul Lönnfors, IR Manager, tel. +358-20 427 2050
DISTRIBUTION
OMX Helsinki Stock Exchange
Media
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