2007-04-27 09:00:07 CEST
2007-04-27 09:00:07 CEST
REGULATED INFORMATION
Konecranes Oyj - Quarterly report
KONECRANES PLC: JANUARY - MARCH 2007 INTERIM REPORT
KONECRANES PLC: JANUARY - MARCH 2007 INTERIM REPORT
- Orders received increased 29 % to record-high 429.4 (332.7) MEUR
- Net sales rose 28 % to 380.5 (296.7) MEUR,
- Operating profit (EBIT): 30.8 (14.0) MEUR, EBIT margin: 8.1 (4.7) %
- Profit before taxes: 27.4 (11.9) MEUR
- Earnings per share: 0.33 (0.15) EUR
- 2007 sales growth target raised to 20 % (previous target: 15 %)
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| | | First | | R12 MTH | LY |
| | | quarter | | | |
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| EUR million | 1-3/200 | 1-3/2006 | Change % | 4/06-3/07 | 2006 |
| | 7 | | | | |
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| SALES | | | | | |
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| Service | 147.8 | 105.6 | 39.9 | 568.7 | 526.6 |
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| Standard Lifting | 144.7 | 114.0 | 26.9 | 589.1 | 558.4 |
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| Heavy Lifting | 113.9 | 98.4 | 15.8 | 506.4 | 490.8 |
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| Internal Sales | -25.8 | -21.3 | | -97.8 | -93.3 |
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| Sales total | 380.5 | 296.7 | 28.3 | 1 566.3 | 1 482.5 |
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| Operating profit | 30.8 | 14.0 | 120.1 | 122.3 | 105.5 |
| (EBIT) | | | | | |
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| Share of result of | -0.2 | -0.1 | | 0.6 | 0.7 |
| associates | | | | | |
| and joint ventures | | | | | |
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| Interests, net | -2.6 | -2.3 | | -9.7 | -9.5 |
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| Other financial | -0.6 | 0.3 | | -2.6 | -1.6 |
| income and expenses | | | | | |
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| Profit before taxes | 27.4 | 11.9 | 130.4 | 110.6 | 95.1 |
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| Taxes | -8.0 | -3.6 | | -30.9 | -26.5 |
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| Net profit for the | 19.5 | 8.3 | 133.7 | 79.7 | 68.6 |
| period | | | | | |
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| Earnings per share, | 0.33 | 0.15 | | 1.37 | 1.17 |
| basic (EUR) | | | | | |
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| Earnings per share, | 0.32 | 0.14 | | 1.34 | 1.15 |
| diluted (EUR) | | | | | |
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| ORDERS RECEIVED | | | | | |
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| Service | 143.8 | 99.8 | 44.1 | 492.6 | 448.5 |
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| Standard Lifting | 196.0 | 142.6 | 37.5 | 646.2 | 592.7 |
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| Heavy Lifting | 118.3 | 115.1 | 2.7 | 522.3 | 519.2 |
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| Internal Orders | -28.7 | -24.9 | | -91.5 | -87.7 |
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| Orders received | 429.4 | 332.7 | 29.1 | 1 569.5 | 1 472.8 |
| Total | | | | | |
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| Order Book at end of | 636.8 | 510.8 | 24.7 | | 571.6 |
| period | | | | | |
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Summary of Konecranes' financial performance in the first quarter of 2007:
Overall strong demand for Konecranes' products and services continued, and first
quarter order intake increased 29.1 % to record-high EUR 429.4 million for one
quarter. The order increase was strongest in Service and Standard Lifting, and
all geographical regions contributed to the improvement. Group sales rose by
28.3 %. Approximately half orders and sales growth was the result of the
acquisition of MMH Holding, which was consolidated as of 1 June, 2006.
Improved efficiency, in combination with higher volumes and prices continued to
have a positive impact on profitability. Higher raw material and component costs
were offset by improved cost-efficiency and higher sales prices. The first
quarter EBIT margin was 8.1 % compared with 4.7 % in the first quarter of 2006.
The EBIT margin improved in all three Business Areas with Standard Lifting
posting the largest increase mainly as a result of strong volume growth. Return
on capital employed increased to 33.3 % and return on equity to 42.8 % on a
rolling twelve-month basis.
Outlook
The level of orders received in the first quarter and the stronger order book,
combined with a solid demand outlook for the second quarter, form a strong base
for the rest of year 2007. Based on these factors, 2007 sales are targeted to
increase by approximately 20 % compared with 2006 sales of MEUR 1,483.
The target is to continue the EBIT margin improvement achieved during recent
years. The expected EBIT margin improvement is based on forecasted higher sales
volumes and productivity gains, a higher pre-calculated margin in the order book
and improved profitability in field services. Unlike in the past, capacity
utilization during the first quarter was high, boosting the margin. This
improvement cannot be directly extrapolated for the rest of the year.
General uncertainty regarding 2007 profitability has increased as a result of
(1) the weaker USD/EUR rate, and (2) uncertain availability and prices of
certain components and raw materials.
Interim Report January-March 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 |
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| Service | | | | |
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| Orders received, MEUR | 99.8 | 108.3 | 117.9 | 122.5 |
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| 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 |
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| Operating margin, % | 8.2 | 10.0 | 10.5 | 10.9 |
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| Standard Lifting | | | | |
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| Orders received, MEUR | 142.6 | 155.3 | 157.2 | 137.7 |
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| Net sales, MEUR | 114.0 | 131.7 | 153.2 | 159.5 |
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| Operating income, MEUR | 8.0 | 12.0 | 15.3 | 16.2 |
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| Operating margin, % | 7.0 | 9.1 | 10.0 | 10.2 |
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Also 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.
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| | Q1 2006 | Q2 2006 | Q3 2006 | Q4 2006 |
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| EMEA | 170.1 | 195.3 | 187.9 | 227.8 |
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| 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 |
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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 Q1 2006 comparison figures do not include MMH. MMH
accounted for roughly half of the reported 28.3 percent sales growth and the
29.1 percent order intake growth. Somewhat over half of MMH's sales and orders
are included in the Service Business Area, and the remainder is fairly evenly
divided between Standard Lifting and Heavy Lifting.
Market Review
Overall market demand for Konecranes' products and services continued to develop
favorably during the first quarter of 2007. Demand improved in all geographical
regions and in almost all customer industries, with general manufacturing,
shipyards, primary metals and metal warehousing, power and petrochemicals
showing particularly strong growth. The pulp and paper and the automotive
industries continued to show weak investment demand. Demand for
container-handling equipment varied by product segment and geographical region.
Due to the continued rise in input costs, especially steel and other metals, as
well as labor costs, the market prices for cranes and crane maintenance rose
somewhat during the first quarter.
Orders Received, Order Book and Contract Base
Order intake amounted to EUR 429.4 (Q1 2006: 332.7) million, representing order
growth of 29.1 percent. Both the strong market and internal factors contributed
to the high order growth. Order intake increased in all geographical regions.
Order intake in Service and Standard Lifting grew substantially, while Heavy
Lifting, which shows considerable quarterly variations, posted moderate growth.
Order intake in Service returned to double-digit organic growth after posting
weaker growth in the fourth quarter 2006.
Standard Lifting benefited from growth in the general manufacturing customer
segment both in emerging and developed markets, and continued strengthening its
clear market-leading position.
Strong demand in process cranes continued supporting order intake in Heavy
Lifting.
The value of the order backlog at the end of March was EUR 636.8 (end of March
2006: 510.8) million, up by 24.7 percent year-on-year and 11.4 percent from the
end of 2006.
The Standard Lifting order book grew clearly as a result of the high order
intake. It represents approximately four months of sales. Also the Service order
book increased substantially, while Heavy Lifting's order book was more or less
unchanged.
The contract base development was positive both in terms of units and value. At
the end of March 2007, there were 269,045 (245,814) cranes and hoists included
in the annual maintenance contract base, up by over 6,000 from the end of 2006.
Orders Received by Business Areas, MEUR
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| | Q1 2007 | Q1 2006 | Change percent |
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| Service | 143.8 | 99.8 | +44.1 |
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| Standard Lifting | 196.0 | 142.6 | +37.5 |
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| Heavy Lifting | 118.3 | 115.1 | +2.7 |
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| Internal | -28.7 | -24.9 | |
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| Total | 429.4 | 332.7 | +29.1 |
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Sales
Net sales rose 28.3 percent to EUR 380.5 (296.7) million. Sales growth was
predominantly the result of higher volumes, but also higher prices contributed
to growth. All Business Areas achieved strong growth in all geographical
regions.
Service sales were supported by the good development in the maintenance contract
base, in addition to strong order growth, increased spare parts sales and MMH's
service revenue.
Organic growth was strongest in Standard Lifting as a result of the strong
demand in general manufacturing, a competitive product offering, new key
customers and expanding geographical presence.
The ongoing supply chain restructuring in Heavy Lifting continued to set
restraints on sales growth potential. Difficulties in procuring subcontracted
components showed no signs of easing.
Net Sales by Business Areas, MEUR
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| | Q1 2007 | Q1 2006 | Change percent |
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| Service | 147.8 | 105.6 | +39.9 |
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| Standard Lifting | 144.7 | 114.0 | +26.9 |
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| Heavy Lifting | 113.9 | 98.4 | +15.8 |
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| Internal | -25.8 | -21.3 | |
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| Total | 380.5 | 296.7 | +28.3 |
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Profitability
The Group's operating income more than doubled to EUR 30.8 (14.0) million and
the operating margin rose to 8.1 (4.7) percent. Higher volumes were the main
driver of the improved margin. Also Increased productivity continued to have a
positive impact on profitability. Changes in currency exchange rates had only a
marginal negative translational effect on operating income. Currency hedging
absorbed the major part of the impact of the weaker USD/EUR rate (and USD-linked
currencies). The decrease in Group overheads from 2.5 to 2.2 percent of sales
supported the Group's margin expansion.
The operating margin in Service rose from 8.2 to 10.2 percent. The main
contributing factors for the profitability increase were higher volumes and
productivity, a maintained high maintenance contract retention rate, and a
higher proportion of spare parts sales. The MMH service business also
contributed to the margin expansion.
The EBIT margin in Standard Lifting rose 4.8 percentage points to 11.8 percent.
Standard Lifting's first quarter product mix was very favorable in terms of
profitability. Other main reasons for Standard Lifting's improved margin were
higher volumes through broader geographical presence, improved productivity,
synergies from the acquired businesses and improved cost-competitiveness. The
restructuring program implemented in 2002-2005 continues to have a positive
effect on productivity and competitiveness. Price increases made after the first
quarter 2006 also helped boost profitability.
In Heavy Lifting, the operating margin rose from 5.7 to 6.9 percent. The
Business Area started a similar restructuring program in 2004 as Standard
Lifting started in 2002. These measures helped improve profitability despite the
fact that the program is ongoing. In combination with the tighter market for
subcontracted components, this continued to create a very challenging
environment in terms of production and deliveries while improving profitability.
Operating income and margin by Business Area
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| | Q1 2007 | Percent of | Q1 2006 | Percent of |
| | MEUR | sales | MEUR | sales |
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| Service | 15.1 | 10.2 | 8.7 | 8.2 |
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| Standard Lifting | 17.0 | 11.8 | 8.0 | 7.0 |
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| Heavy Lifting | 7.9 | 6.9 | 5.6 | 5.7 |
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| ./. Group overheads | -8.5 | -2.2 | -7.4 | -2.5 |
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| ./. Elimination of | -0.7 | -0.0 | -0.8 | -0.0 |
| internal profit | | | | |
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| Total | 30.8 | 8.1 | 14.0 | 4.7 |
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Group EBITDA was EUR 37.0 (18.8) million or 9.7 (6.3) percent on sales.
Depreciations grew by EUR 1.5 million, from EUR 4.7 million to EUR 6.2 million.
The increase in depreciations is mainly attributable to acquisitions.
The share of associated companies' result amounted to EUR -0.2 (-0.1) million.
Group interest costs (the net of interest income and expenses) were EUR 2.6
(2.3) million.
Group income after financing items was EUR 27.4 (11.9) million. Income taxes
were EUR 8.0 (3.6) million corresponding to an effective tax rate of 29 (30)
percent for the year. The change in tax rate is mainly related to structural
changes.
Group net income was EUR 19.5 (8.3) million. Basic earnings per share totaled
EUR 0.33 (0.15) and diluted earnings per share were EUR 0.32 (0.14).
The Group's return on capital employed was 29.9 (18.3) percent and return on
equity was 35.3 (21.7) percent. On a rolling twelve-month basis, return on
capital employed was 33.3 and return on equity 42.8.
Group costs
Unallocated Group overhead costs were EUR 8.5 (7.4) million, representing 2.2
(2.5) 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.
Seasonality of sales and profit
The sales and profit accumulation in the Group has historically not been equal
between quarters. Typically, sales and profit generation has been slow in the
beginning of the year and accelerated towards the yearend.
This seasonality has, however, decreased in the past two years as the business
has become more geographically distributed. The decrease in seasonality is
expected to continue in 2007, as the strong growth will lead to high capacity
utilization throughout the year.
Cash flow and balance sheet
Cash flow from operations before financing items and taxes, but after the change
in working capital, was EUR 34.5 (31.2) million, representing EUR 0.58 (0.54)
per share. Net working capital increased marginally despite significantly higher
volumes.
Cash flow from financing items and taxes was EUR -12.2 (-4.6) million. Net cash
flow from operating activities was EUR 22.3 (26.6) million, representing EUR
0.38 (0.46) per share.
In total, EUR 12.0 (3.1) million of cash was used to cover capital expenditures
including acquisitions. The cash-based capital expenditures in fixed assets were
EUR 6.8 (3.6) million.
The parent company paid EUR 26.8 (15.8) million in dividends.
Group interest-bearing debt was EUR 204.5 (162.7) million, and interest-bearing
net debt was EUR 141.8 (122.6) million. Gearing was 65.0 (79.3) percent. The
Solidity (equity) ratio was 27.1 (24.5) percent and the current ratio was 1.3
(1.2).
The Group has a EUR 200 million committed back-up financing facility to secure
running liquidity. At the end of the first quarter, EUR 60.0 (end-2006: 100.9)
million was in use.
Currencies
Changes in currency exchange rates had only a marginal negative translational
effect on reported orders, sales and operating income. Currency hedging absorbed
the major part of the impact of the weaker USD/EUR rate (and USD-linked
currencies).
The impact of the weakened USD/EUR rate will, however weight on the reported
orders, sales and profits in the second half of 2007. Continued unfavorable
currency rate development would have a further negative impact on profitability
going forward.
The consolidation exchange rates of some important currencies for the Group
developed as follows:
The period end rates:
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| | Q1 2007 | Q1 2006 | Change % |
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| USD | 1.332 | 1.210 | -9.12% |
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| CAD | 1.537 | 1.408 | -8.34% |
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| GBP | 0.680 | 0.696 | 2.44% |
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| CNY | 10.295 | 9.704 | -5.74% |
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| SGD | 2.020 | 1.958 | -3.08% |
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| SEK | 9.346 | 9.432 | 0.91% |
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| NOK | 8.119 | 7.968 | -1.87% |
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| AUD | 1.648 | 1.700 | 3.11% |
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The period average rates:
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| | Q1 2007 | Q1 2006 | Change % |
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| USD | 1.311 | 1.202 | -8.27% |
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| CAD | 1.536 | 1.389 | -9.55% |
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| GBP | 0.671 | 0.686 | 2.32% |
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| CNY | 10.169 | 9.678 | -4.83% |
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| SGD | 2.007 | 1.956 | -2.55% |
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| SEK | 9.189 | 9.353 | 1.78% |
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| NOK | 8.169 | 8.024 | -1.77% |
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| AUD | 1.667 | 1.628 | -2.37% |
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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
The Group's capital expenditures excluding acquisitions were EUR 5.4 (3.1)
million. These capital expenditures consisted mainly of replacement or capacity
expansion investments on machines, equipment and information technology. Capital
expenditure in acquisitions was EUR 5.4 (0.0) million, of which the acquisition
of the existing Straddle Carrier product rights from Consens Transport Systeme
GmbH form the majority.
Personnel and personnel development
At the end of March, the Group employed 7,805 (6,125) persons. The average
number of personnel was 7,677 (6,024) in the first quarter 2007. The increase in
employment relates mainly to the acquisition on MMH Holding. Since the end of
2006, the number of employees increased by 256, of which 205 in Service.
Personnel by Business Area, end of period
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| | Q1 2007 | Q1 2006 | Change percent |
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| Service | 4,128 | 3,042 | +36 |
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| Standard Lifting | 2,321 | 2,047 | +13 |
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| Heavy Lifting | 1,173 | 898 | +8 |
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| Group Staff | 183 | 138 | +32 |
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| Total | 7,805 | 6,125 | +27 |
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Resolutions of Konecranes' Annual General Meeting
Konecranes Annual General Meeting held on 8 March, 2007 approved the company's
Financial Statements for the fiscal year 2006 and discharged the Board and
Managing Director from liability.
The AGM adopted the Board's proposal that dividend of EUR 0.45 be paid on
59,402,720 shares, totaling EUR 26,731,224.00. Konecranes has 742,600 own shares
in its possession, which are not entitled to dividend. The rest of the
non-restricted equity of EUR 45,110,117.03 was retained and carried forward. The
dividend was paid on 21 March, 2007.
The AGM approved the proposal of the Nomination and Compensation Committee that
eight (8) members of the Board of Directors be elected. The Board of Directors
elected in the AGM in 2006 was re-elected, added with one new member. Mr. Svante
Adde, Mr. Stig Gustavson, Mr. Matti Kavetvuo, Ms. Malin Persson, Mr. Timo
Poranen, Mr. Björn Savén and Mr. Stig Stendahl were re-elected, and the managing
director of Nokian Tyres Plc. Mr. Kim Gran was elected as a new member. The term
of the Board ends at the next AGM.
The AGM confirmed an annual fee of EUR 78,000 for the Chairman of the Board, EUR
48,000 for the Vice Chairman of the Board, and EUR 30,000 for other Board
members and that 40 % of the annual fee will be used to acquire Konecranes Plc
shares from the market to each Board member. Should the acquisition of shares
not be possible due to reasons consequent upon the Company or Board member, the
compensation will be paid in its entirety in cash. In addition, compensation of
EUR 1,200 was approved for attendance at Board Committee meetings. Travel
expenses are compensated against invoice.
The AGM confirmed that Ernst & Young Oy continue as the Company's external
auditors.
The AGM approved the Board's proposal to amend the Articles of Association,
which are mainly due to the new Companies Act effective as from 1 September,
2006. The Articles of Association were amended as follows:
-The Company name is Konecranes Abp, in Finnish Konecranes Oyj and in English
Konecranes Plc (1 §)
-The definition of the object of the Company's business is complemented (2 §)
-The provisions concerning the Company's minimum share capital and maximum
authorized capital and the number of shares are abolished (3 § and 4 §)
-The provisions concerning the record date are abolished (5 §)
-The provisions concerning the representing of the Company are amended to
correspond with the terminology of the new Companies Act (the new 6 §)
-The time of delivery of the Notice of a Shareholders' Meeting is amended. The
notice is to be delivered not earlier than three (3) months before the General
Meeting (the new 9 §)
-The agenda of the Annual General Meeting is amended to correspond contentually
to the new Companies Act (the new 10 §)
-The provision concerning the shareholder's liability to redeem shares is
abolished (13 §)
-A provision on the resolution of corporate disputes is added (the new 11 §)
Board Authorizations
The AGM authorized the Board to repurchase the Company's own shares. No more
than 6,500,000 shares may be repurchased. The Company cannot at any moment own
more shares than the amount of shares, which together with shares held by its
subsidiaries corresponds to 10 per cent of all the registered shares of the
Company.
The Board resolves upon the methods of the repurchase and other provisions.
Among others, derivatives can be used in the purchase. The shares can be
purchased in deviation from the proportioned holdings of the shareholders
(directed purchase).
The AGM authorized the Board to transfer shares repurchased by the Company. The
authorization is limited to a maximum of 6,500,000 shares. The shares may be
transferred in one or several tranches. The Board is authorized to resolve upon
the terms and conditions of the transfer of the own shares. The Board is
authorized to resolve to transfer the shares deviating from the shareholders'
pre-emptive rights to acquire the Company's shares, provided that weighty
financial grounds exist. The Board can use this authorization to grant stock
option rights and other special rights concerning the Company's own shares,
referred to in Chapter 10 of the Companies Act but not, however, to resolve upon
a personnel stock option plan.
The AGM approved the Board's proposal that the key employees of the Konecranes
group are granted the maximum of 3 million option rights. The option rights
entitle to an aggregate of 3 million Company shares.
Option rights are divided into three series, whose subscription periods are
staggered, so that the share subscription period for the option rights of the
first series begins on 2 May 2009 and ends for the option rights of the last
series on 30 April 2013.
The share subscription prices when exercising an option right are based on the
Company share's market price, as defined in the terms of the option rights.
The AGM approved the Board's proposal that the subscription price paid for new
shares that are subscribed on the basis of the Company's option rights 1997
(based on the General Meeting resolution on 4 March 1997), 1999 (based on the
General Meeting resolution on 11 March 1999), 2001 (based on the General Meeting
resolution on 8 March 2001) and 2003 (based on the General Meeting resolution on
6 March 2003), and are issued after the General Meeting, will be booked in its
entirety to the paid in capital.
Change in Management
The Konecranes Group's CFO Teuvo Rintamäki informed that he will leave his
position. Mr. Rintamäki has been a member of the Group management team since it
was formed in 1994. The search for a new CFO is underway and both internal and
external candidates will be considered. Mr. Rintamäki has confirmed that he will
continue as CFO until his successor has been appointed and introduced to the
position.
Acquisitions
Konecranes acquired all the existing Straddle Carrier product rights from
Consens Transport Systeme GmbH in January, 2007. Konecranes has started to
manufacture Straddle Carriers based on the concept developed by Consens.
Konecranes' entry into the Straddle Carrier business is an important step in
developing Konecranes' product offering within Ports and further increases the
company's global competitiveness. Konecranes will use its well-established
global service platform to support the new product line and utilize its existing
distribution and service network for cranes and lifttrucks to market the new
product line.
By entering the straddle carrier business, Konecranes not only widens the
product offering, but also gains access to new customers, who have been using
this yard-operating concept.
Sale of Real Estate
Konecranes signed a letter of intent regarding the sale of six properties
located in Hyvinkää and Hämeenlinna, Finland, to the Swedish-based real estate
company AB Sagax (publ.) on March 26, 2007. The real estate comprises buildings
of approximately 74,000 square meters and a land area of roughly 240,000 square
meters, which are currently mainly in production, warehousing and office use.
The Konecranes companies currently operating in the facilities will continue
their normal operations in these facilities under long-term rental agreements.
The aggregate sales price for the facilities is approximately EUR 30 million. As
a result of the transaction, which is expected to be signed and closed shortly,
Konecranes will book a capital gain in the second quarter of 2007.
Risks
Konecranes main short-term risks regarding the 2007 financial performance are
the availability, quality, costs, and delivery times and accuracy of
subcontracted components.
The ability and cost to increase own production capacity is also subject to some
uncertainty.
Due to the current tight labor market, labor costs and difficulty to recruit
skilled personnel is a cause of some uncertainty in regards to growth and
profitability in Service.
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 four ongoing stock option plans (1997, 1999, 2001 and 2003). The
option plans include approximately 300 key employees. The terms and conditions
of the stock option programs are available on our website at www.konecranes.com.
Pursuant to Konecranes' stock option plans 194,500 new shares were subscribed
for and registered in the Finnish Trade Register during year the first quarter
of 2007. As a result of the subscriptions, Konecranes' share capital increased
to EUR 30,072,660, comprising 60,272,220 shares.
The remaining 1997, 1999B, 2001 and 2003 stock options at the end of the
accounting period entitle to subscription of a total of 1,797,100 shares.
On 15 December, 2006, the Konecranes Board approved a long-term incentive
program directed to Pekka Lundmark, the Managing Director of the Company. The
program was implemented by disposing of the Company's own shares held by the
Company on the basis of the authorization granted to the Board of Directors by
the AGM on 8 March, 2006.
Pursuant to the incentive program a total of 50,000 shares were sold to the
Managing Director on 22 December 2006, and 50,000 shares were sold in January
2007 on terms and conditions defined in the terms of subscription. The shares
sold are subject to a five-year transfer restriction. As part of the scheme the
Company paid a separate bonus to the Managing Director to cover the taxes levied
as a result of the arrangement.
The purpose of the incentive scheme is to motivate the Managing Director to
contribute in the best possible manner to long-term success of the Company and
increased shareholder value for all shareholders of the Company.
Own Shares in the Company's Possession
At the end of March, 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 13 percent during the first quarter of 2007
and closed at EUR 25.10. The period high was EUR 26.85 and period low EUR 20.68.
The volume-weighted average share price during the period was EUR 24.31. In the
same period, the OMX Helsinki Index rose by roughly seven percent and the OMX
Helsinki Industrials Index by nearly 12 percent.
At the end of March 2007, Konecranes' total market capitalization was EUR 1,512
million including own shares in the company's possession, making it the 29th
largest company on the Helsinki Stock Exchange.
The trading volume totaled 32.1 million shares, representing a turnover velocity
of 207 percent. Total trading amounted to EUR 781 million, which was the 21st
highest on the Helsinki Exchange. The daily average trading volume was 502,307
shares, representing a daily average turnover of EUR 12.2 million.
Flagging notifications
--------------------------------------------------------------------------------
| Date | Shareholder | Number of | % of | Prior |
| | | Shares | shares and | flagging, % |
| | | owned | votes* | of shares |
| | | | | and votes |
--------------------------------------------------------------------------------
| 19 | Fidelity | 4 137 578 | 6.89 | 10.02 |
| January,2007 | International | | | |
| | Limited and its | | | |
| | direct and | | | |
| | indirect | | | |
| | subsidiaries | | | |
--------------------------------------------------------------------------------
| 12 March, 2007 | JPMorgan Chase & | 3 008 405 | 5.00 | |
| | Co and its | | | |
| | subsidiaries | | | |
--------------------------------------------------------------------------------
| 14 March, 2007 | JPMorgan Chase & | 2 936 245 | 4.88 | |
| | Co and its | | | |
| | subsidiaries | | | |
--------------------------------------------------------------------------------
| 20 March, 2007 | Morgan Stanley & | 3 014 940 | 5.00 | |
| | Co International | | | |
| | Ltd | | | |
--------------------------------------------------------------------------------
| 21 March, 2007 | Morgan Stanley & | 2 010 229 | 3.33 | |
| | Co International | | | |
| | Ltd | | | |
--------------------------------------------------------------------------------
| 29 March, 2007 | JPMorgan Chase & | 3 313 163 | 5.50 | |
| | Co and its | | | |
| | subsidiaries | | | |
| | direct and | | | |
| | indirect | | | |
| | subsidiaries | | | |
--------------------------------------------------------------------------------
*Percentage of shares at time of notification
Outlook
The level of orders received in the first quarter and the stronger order book,
combined with a solid demand outlook for the second quarter, form a strong base
for the rest of year 2007. Based on these factors, 2007 sales are targeted to
increase by approximately 20 % compared with 2006 sales of MEUR 1,483.
The target is to continue the EBIT margin improvement achieved during recent
years. The expected EBIT margin improvement is based on forecasted higher sales
volumes and productivity gains, a higher pre-calculated margin in the order book
and improved profitability in field services. Unlike in the past, capacity
utilization during the first quarter was high, boosting the margin. This
improvement cannot be directly extrapolated for the rest of the year.
General uncertainty regarding 2007 profitability has increased as a result of
(1) the weaker USD/EUR rate, and (2) uncertain availability and prices of
certain components and raw materials.
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
RTG orders in Europe:
Grupo Boluda Corporacion Maritima, a new customer to Konecranes, ordered eight
RTG (Rubber Tired Gantry) cranes, and Dragados S.P.L. placed a repeat order of
six RTGs to Maritima Valenciana in the Port of Valencia. The orders were made in
March, 2007 and the cranes will be
delivered by January, 2008. The total value
of the orders is approximately 15 MEUR.
Shipyards:
Taekwang Heavy Industry, an important player in the South Korean shipbuilding
market ordered one Gantry Crane. Taekwang is a new customer to Konecranes and
the latest order reflects an increased demand for high capacity shipyard cranes
among Korean shipbuilders. The crane will be delivered to the Taekwang shipyard
in Youngkwang in October 2007.
HPC Ukraina, in Odessa, Ukraine, a subsidiary of HPC Hamburg Port Consulting
GmbH, which is a new customer to Konecranes, ordered four RTG cranes and
Compania Auxiliar del Puerto SA (CAPSA) in Santa Cruz de Tenerife, Canary
Islands has ordered two RTGs. The total value of the orders is over 7 MEUR. The
cranes will be delivered by January 2008.
Energy:
RWEnPower ordered a 12T grabbing crane for Aberthaw power plant in
Wales.Konecranes will deliver 3 EOT-powerhouse cranesto the power plant Limberg
II in Austria. China Everbright / Changzhou Environmental Energy (Changzhou) Ltd
orderd two sets of 9.5t semiautomatic cranes for refuse handling to be delivered
to China. Shandong Luneng Mount Tai Electric Equipment Co., Ltd ordered one set
of 260/32t EOT Crane. They also ordered 6 sets of CXT Cranes. All cranes will be
delivered to China.
RTG orders in Europe:
Grupo Boluda Corporacion Maritima, a new customer to Konecranes, ordered eight
RTG (Rubber Tired Gantry) cranes, and Dragados S.P.L. placed a repeat order of
six RTGs to Maritima Valenciana in the Port of Valencia. The orders were made in
March, 2007 and the cranes will be delivered by January, 2008. The total value
of the orders is approximately 15 MEUR.
HPC Ukraina, in Odessa, Ukraine, a subsidiary of HPC Hamburg Port Consulting
GmbH, which is a new customer to Konecranes, ordered four RTG cranes and
Compania Auxiliar del Puerto SA (CAPSA) in Santa Cruz de Tenerife, Canary
Islands has ordered two RTGs. The total value of the orders is over 7 MEUR. The
cranes will be delivered by January 2008.
Shipyards:
Taekwang Heavy Industry, an important player in the South Korean shipbuilding
market ordered one Gantry Crane. Taekwang is a new customer to Konecranes and
the latest order reflects an increased demand for high capacity shipyard cranes
among Korean shipbuilders. The crane will be delivered to the Taekwang shipyard
in Youngkwang in October 2007.
Steel:
Thyssen 13t Crane to be delivered to France. Duferco ordered one 52t+15t Gantry
Crane to be delivered to Belgium.
Energy:
RWEnPower ordered a 12T grabbing crane for Aberthaw power plant in
Wales.Konecranes will deliver 3 EOT-powerhouse cranesto the power plant Limberg
II in Austria. China Everbright / Changzhou Environmental Energy (Changzhou) Ltd
orderd two sets of 9.5t semiautomatic cranes for refuse handling to be delivered
to China. Shandong Luneng Mount Tai Electric Equipment Co., Ltd ordered one set
of 260/32t EOT Crane. They also ordered 6 sets of CXT Cranes. All cranes will be
delivered to China.
Others:
Fluor Enterprises, Inc from Texas, USA ordered one 30 ton coke handling bucket
crane with a span of 139 feet for the Marathon Oil Corporation refinery in
Garyville, Lousiana, USA. This is the second Konecranes coker crane for this
refinery.
OJI Tomioka made a large order comprising five process cranes for its paper mill
in Japan.
PSA Peugeot Citroën ordered one 50t Crane and one 30t SM Crane to be delivered
to France.
--------------------------------------------------------------------------------
| CONSOLIDATED STATEMENT OF INCOME - IFRS | | | |
--------------------------------------------------------------------------------
| EUR million | 1-3/2007 | 1-3/2006 | 1-12/2006 |
--------------------------------------------------------------------------------
| Sales | 380.5 | | 296.7 | | 1 482.5 |
--------------------------------------------------------------------------------
| Other operating income | 0.7 | | 0.8 | | 2.0 |
--------------------------------------------------------------------------------
| Depreciation and impairments | -6.2 | | -4.7 | | -22.5 |
--------------------------------------------------------------------------------
| Other operating expenses | -344.3 | | -278.8 | | -1 356.5 |
--------------------------------------------------------------------------------
| Operating profit | 30.8 | | 14.0 | | 105.5 |
--------------------------------------------------------------------------------
| Share of result of associates and | -0.2 | | -0.1 | | 0.7 |
| joint ventures | | | | | |
--------------------------------------------------------------------------------
| Financial income and expenses | -3.2 | | -2.0 | | -11.1 |
--------------------------------------------------------------------------------
| Profit before taxes | 27.4 | | 11.9 | | 95.1 |
--------------------------------------------------------------------------------
| Taxes | -8.0 | | -3.6 | | -26.5 |
--------------------------------------------------------------------------------
| Net profit for the period | 19.5 | | 8.3 | | 68.6 |
--------------------------------------------------------------------------------
| Net profit for the period attributable to | | | | |
--------------------------------------------------------------------------------
| Shareholders of the parent company | 19.5 | | 8.3 | | 68.6 |
--------------------------------------------------------------------------------
| Minority interest | 0.0 | | 0.0 | | 0.0 |
--------------------------------------------------------------------------------
| Earnings per share, basic (EUR) | 0.33 | | 0.15 | | 1.17 |
--------------------------------------------------------------------------------
| Earnings per share, diluted (EUR) | 0.32 | | 0.14 | | 1.15 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CONSOLIDATED BALANCE SHEET - IFRS | | | | |
--------------------------------------------------------------------------------
| EUR million | | | | | |
--------------------------------------------------------------------------------
| ASSETS | 31.03.2007 | 31.03.2006 | 31.12.2006 |
--------------------------------------------------------------------------------
| Non-current assets | | | | | |
--------------------------------------------------------------------------------
| Goodwill | 54.0 | | 55.6 | | 54.0 |
--------------------------------------------------------------------------------
| Other intangible assets | 54.7 | | 41.7 | | 55.0 |
--------------------------------------------------------------------------------
| Property, plant and equipment | 68.2 | | 59.6 | | 67.5 |
--------------------------------------------------------------------------------
| Advance payments and | 11.0 | | 6.0 | | 9.6 |
| construction in progress | | | | | |
--------------------------------------------------------------------------------
| Investments accounted for using | 6.1 | | 5.8 | | 6.3 |
| the equity method | | | | | |
--------------------------------------------------------------------------------
| Available-for-sale investments | 2.1 | | 1.6 | | 2.1 |
--------------------------------------------------------------------------------
| Long-term loans receivable | 0.5 | | 0.4 | | 0.5 |
--------------------------------------------------------------------------------
| Deferred tax assets | 25.4 | | 21.1 | | 24.6 |
--------------------------------------------------------------------------------
| Total non-current assets | 221.9 | | 191.7 | | 219.6 |
--------------------------------------------------------------------------------
| Current assets | | | | | |
--------------------------------------------------------------------------------
| Inventories | | | | | |
--------------------------------------------------------------------------------
| Raw material and | 96.7 | | 70.1 | | 92.7 |
| semi-manufactured goods | | | | | |
--------------------------------------------------------------------------------
| Work in progress | 119.5 | | 94.1 | | 103.5 |
--------------------------------------------------------------------------------
| Advance payments | 35.4 | | 13.1 | | 30.4 |
--------------------------------------------------------------------------------
| Total inventories | 251.6 | | 177.3 | | 226.6 |
--------------------------------------------------------------------------------
| Account receivables | 283.9 | | 212.6 | | 324.2 |
--------------------------------------------------------------------------------
| Loans receivable | 0.1 | | 0.3 | | 0.2 |
--------------------------------------------------------------------------------
| Other receivables | 23.6 | | 22.4 | | 27.0 |
--------------------------------------------------------------------------------
| Deferred assets | 71.0 | | 78.1 | | 76.9 |
--------------------------------------------------------------------------------
| Cash and cash equivalents | 62.0 | | 39.4 | | 44.4 |
--------------------------------------------------------------------------------
| Total current assets | 692.3 | | 530.1 | | 699.4 |
--------------------------------------------------------------------------------
| TOTAL ASSETS | 914.2 | | 721.9 | | 919.0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EQUITY AND LIABILITIES | 31.03.2007 | 31.03.2006 | 31.12.2006 |
--------------------------------------------------------------------------------
| Capital and reserves attributable to the shareholders of the | |
| parent | |
--------------------------------------------------------------------------------
| Share capital | 30.1 | | 29.5 | | 30.0 |
--------------------------------------------------------------------------------
| Share premium account | 39.3 | | 33.3 | | 39.0 |
--------------------------------------------------------------------------------
| Share issues | 0.2 | | 0.0 | | 0.0 |
--------------------------------------------------------------------------------
| Fair value reserves | 3.6 | | -2.0 | | 3.7 |
--------------------------------------------------------------------------------
| Translation difference | -6.1 | | -1.7 | | -5.8 |
--------------------------------------------------------------------------------
| Paid in capital | 1.9 | | 0.0 | | 0.5 |
--------------------------------------------------------------------------------
| Retained earnings | 129.6 | | 87.2 | | 87.7 |
--------------------------------------------------------------------------------
| Net profit for the period | 19.5 | | 8.3 | | 68.6 |
--------------------------------------------------------------------------------
| Total Shareholders' equity | 218.0 | | 154.6 | | 223.7 |
--------------------------------------------------------------------------------
| Minority interest | 0.1 | | 0.1 | | 0.1 |
--------------------------------------------------------------------------------
| Total equity | 218.0 | | 154.7 | | 223.7 |
--------------------------------------------------------------------------------
| Liabilities | | | | | |
--------------------------------------------------------------------------------
| Non-current liabilities | | | | | |
--------------------------------------------------------------------------------
| Interest-bearing | 79.4 | | 27.1 | | 120.9 |
| liabilities | | | | | |
--------------------------------------------------------------------------------
| Other long-term liabilities | 58.8 | | 58.0 | | 58.7 |
--------------------------------------------------------------------------------
| Deferred tax liabilities | 19.0 | | 17.1 | | 20.0 |
--------------------------------------------------------------------------------
| Total non-current | 157.2 | | 102.2 | | 199.6 |
| liabilities | | | | | |
--------------------------------------------------------------------------------
| Provisions | 27.3 | | 20.4 | | 28.2 |
--------------------------------------------------------------------------------
| Current liabilities | | | | | |
--------------------------------------------------------------------------------
| Interest-bearing | 125.1 | | 135.6 | | 52.4 |
| liabilities | | | | | |
--------------------------------------------------------------------------------
| Advance payments received | 109.8 | | 89.7 | | 128.9 |
--------------------------------------------------------------------------------
| Progress billings | 8.5 | | 0.0 | | 7.0 |
--------------------------------------------------------------------------------
| Accounts payable | 102.2 | | 78.4 | | 113.6 |
--------------------------------------------------------------------------------
| Other short-term | 23.9 | | 19.1 | | 23.0 |
| liabilities (non-interest | | | | | |
| bearing) | | | | | |
--------------------------------------------------------------------------------
| Accruals | 142.2 | | 121.6 | | 142.5 |
--------------------------------------------------------------------------------
| Total current liabilities | 511.7 | | 444.5 | | 467.4 |
--------------------------------------------------------------------------------
| Total liabilities | 696.2 | | 567.1 | | 695.2 |
--------------------------------------------------------------------------------
| TOTAL EQUITY AND | 914.2 | | 721.9 | | 919.0 |
| LIABILITIES | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| KEY FIGURES | 31.03.2007 | 31.03.2006 | 31.12.2006 |
--------------------------------------------------------------------------------
| Gearing % | 65.0 | | 79.3 | | 57.3 |
--------------------------------------------------------------------------------
| Solidity % | 27.1 | | 24.5 | | 28.3 |
--------------------------------------------------------------------------------
| Return on capital employed | 33.3 | | 20.6 | | 29.5 |
| %, Rolling 12 Months | | | | | |
| (R12M) | | | | | |
--------------------------------------------------------------------------------
| Return on equity %, | 42.8 | | 24.3 | | 36.5 |
| Rolling 12 Months (R12M) | | | | | |
--------------------------------------------------------------------------------
| Equity/share, EUR | 3.66 | | 2.66 | | 3.77 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CONSOLIDATED STATEMENT OF CHANGES |
| IN EQUITY - IFRS |
--------------------------------------------------------------------------------
| MEUR | Share | Share premium | Share | Fair value |
| | capital | account | issues | Reserves |
--------------------------------------------------------------------------------
| Balance at 31 Dec, | 29.0 | 26.5 | 0.0 | -4.9 |
| 2005 | | | | |
--------------------------------------------------------------------------------
| Option excercised | 0.6 | 6.7 | | |
--------------------------------------------------------------------------------
| Dividend distribution | | | | |
--------------------------------------------------------------------------------
| Cash flow hedge | | | | 2.9 |
--------------------------------------------------------------------------------
| Translation difference | | | | |
--------------------------------------------------------------------------------
| Share based payments | | |
| recognized against equity | | |
--------------------------------------------------------------------------------
| Other change | | | | |
--------------------------------------------------------------------------------
| Minority interest | | | | |
--------------------------------------------------------------------------------
| Net profit for the | | | | |
| period | | | | |
--------------------------------------------------------------------------------
| Balance at 31 March, | 29.5 | 33.3 | 0.0 | -2.0 |
| 2006 | | | | |
--------------------------------------------------------------------------------
| Balance at 31 Dec, | 30.0 | 39.0 | 0.0 | 3.7 |
| 2006 | | | | |
--------------------------------------------------------------------------------
| Option excercised | 0.0 | 0.3 | | |
--------------------------------------------------------------------------------
| Share issue | | | 0.2 | |
--------------------------------------------------------------------------------
| Dividend distribution | | | | |
--------------------------------------------------------------------------------
| Cash flow hedge | | | | -0.1 |
--------------------------------------------------------------------------------
| Translation difference | | | | |
--------------------------------------------------------------------------------
| Share based payments | | |
| recognized against equity | | |
--------------------------------------------------------------------------------
| Minority interest | | | | |
--------------------------------------------------------------------------------
| Net profit for the | | | | |
| period | | | | |
--------------------------------------------------------------------------------
| Balance at 31 March, | 30.1 | 39.3 | 0.2 | 3.6 |
| 2007 | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CONSOLIDATED STATEMENT OF CHANGES |
| IN EQUITY - IFRS |
--------------------------------------------------------------------------------
| MEUR | Translati | Paid in | Retained | Minority | Total |
| | on | Capital | Earnings | interest | Equity |
| | Differenc | | | | |
| | e | | | | |
--------------------------------------------------------------------------------
| Balance at 31 Dec, | -1.2 | 0.0 | 102.7 | 0.1 | 152.1 |
| 2005 | | | | | |
--------------------------------------------------------------------------------
| Option excercised | | | | | 7.3 |
--------------------------------------------------------------------------------
| Dividend | | | -15.8 | | -15.8 |
| distribution | | | | | |
--------------------------------------------------------------------------------
| Cash flow hedge | | | | | 2.9 |
--------------------------------------------------------------------------------
| Translation | -0.5 | | | | -0.5 |
| difference | | | | | |
--------------------------------------------------------------------------------
| Share based payments | 0.2 | | 0.2 |
| recognized against equity | | | |
--------------------------------------------------------------------------------
| Other change | | | 0.1 | | 0.1 |
--------------------------------------------------------------------------------
| Minority interest | | | | | 0.0 |
--------------------------------------------------------------------------------
| Net profit for the | | | 8.3 | | 8.3 |
| period | | | | | |
--------------------------------------------------------------------------------
| Balance at 31 March, | -1.7 | 0.0 | 95.6 | 0.1 | 154.7 |
| 2006 | | | | | |
--------------------------------------------------------------------------------
| Balance at 31 Dec, | -5.8 | 0.5 | 156.3 | 0.1 | 223.7 |
| 2006 | | | | | |
--------------------------------------------------------------------------------
| Option excercised | | 1.4 | | | 1.7 |
--------------------------------------------------------------------------------
| Share issue | | | | | 0.2 |
--------------------------------------------------------------------------------
| Dividend | | | -26.8 | | -26.8 |
| distribution | | | | | |
--------------------------------------------------------------------------------
| Cash flow hedge | | | | | -0.1 |
--------------------------------------------------------------------------------
| Translation | -0.3 | | | | -0.3 |
| difference | | | | | |
--------------------------------------------------------------------------------
| Share based payments | | | 0.1 | | 0.1 |
| recognized against | | | | | |
| equity | | | | | |
--------------------------------------------------------------------------------
| Minority interest | | | | | 0.0 |
--------------------------------------------------------------------------------
| Net profit for the | | | 19.5 | | 19.5 |
| period | | | | | |
--------------------------------------------------------------------------------
| Balance at 31 March, | -6.1 | 1.9 | 149.1 | 0.1 | 218.0 |
| 2007 | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CONSOLIDATED CASH FLOW STATEMENT - IFRS | | | |
--------------------------------------------------------------------------------
| EUR million | 1-3/2007 | 1-3/2006 | 1-12/2006 |
--------------------------------------------------------------------------------
| Cash flow from operating | | | | | |
| activities | | | | | |
--------------------------------------------------------------------------------
| Operating income | 30.8 | | 14.0 | | 105.5 |
--------------------------------------------------------------------------------
| Adjustments to operating profit | | | | | |
--------------------------------------------------------------------------------
| Depreciation and impairments | 6.2 | | 4.7 | | 22.5 |
--------------------------------------------------------------------------------
| Profits and losses on sale of | -0.1 | | 0.0 | | -0.3 |
| fixed assets | | | | | |
--------------------------------------------------------------------------------
| Other non-cash items | -0.2 | | 0.1 | | 2.0 |
--------------------------------------------------------------------------------
| Operating income before chg in net | 36.7 | | 18.9 | | 129.7 |
| working capital | | | | | |
--------------------------------------------------------------------------------
| Change in interest-free short-term | 45.9 | | 14.6 | | -69.1 |
| receivables | | | | | |
--------------------------------------------------------------------------------
| Change in inventories | -22.4 | | -21.9 | | -48.2 |
--------------------------------------------------------------------------------
| Change in interest-free short-term | -25.7 | | 19.5 | | 101.9 |
| liabilities | | | | | |
--------------------------------------------------------------------------------
| Change in net working capital | -2.2 | | 12.3 | | -15.4 |
--------------------------------------------------------------------------------
| Cash flow from operations before | 34.5 | | 31.2 | | 114.2 |
| financing items and taxes | | | | | |
--------------------------------------------------------------------------------
| Interest received | 0.4 | | 0.4 | | 2.1 |
--------------------------------------------------------------------------------
| Interest paid | -3.0 | | -2.0 | | -11.5 |
--------------------------------------------------------------------------------
| Other financial income and | -0.6 | | 0.3 | | -1.4 |
| expenses | | | | | |
--------------------------------------------------------------------------------
| Income taxes paid | -9.1 | | -3.4 | | -22.1 |
--------------------------------------------------------------------------------
| Financing items and taxes | -12.2 | | -4.6 | | -32.8 |
--------------------------------------------------------------------------------
| Net cash from operating activities | 22.3 | | 26.6 | | 81.4 |
--------------------------------------------------------------------------------
| Cash flow from investing | | | | | |
| activities | | | | | |
--------------------------------------------------------------------------------
| Acquisition of Group companies, | -5.1 | | 0.0 | | -48.3 |
| net of cash | | | | | |
--------------------------------------------------------------------------------
| Acquisition of shares in | 0.0 | | 0.0 | | -0.2 |
| associated company | | | | | |
--------------------------------------------------------------------------------
| Investments in other shares | -0.2 | | 0.0 | | -0.6 |
--------------------------------------------------------------------------------
| Capital expenditures | -6.8 | | -3.6 | | -17.1 |
--------------------------------------------------------------------------------
| Proceeds from sale of fixed assets | 0.1 | | 0.5 | | 1.2 |
--------------------------------------------------------------------------------
| Dividends received | 0.0 | | 0.0 | | 0.1 |
--------------------------------------------------------------------------------
| Net cash used in investing | -12.0 | | -3.1 | | -64.8 |
| activities | | | | | |
--------------------------------------------------------------------------------
| Cash flow before financing | 10.3 | | 23.5 | | 16.6 |
| activities | | | | | |
--------------------------------------------------------------------------------
| Cash flow from financing | | | | | |
| activities | | | | | |
--------------------------------------------------------------------------------
| Proceeds from options exercised | 2.0 | | 7.3 | | 14.1 |
| and share issues | | | | | |
--------------------------------------------------------------------------------
| Proceeds from (+), payments of (-) | -40.8 | | -3.9 | | 88.5 |
| long-term borrowings | | | | | |
--------------------------------------------------------------------------------
| Proceeds from (+), payments of (-) | 73.1 | | -15.3 | | -101.8 |
| short-term borrowings | | | | | |
--------------------------------------------------------------------------------
| Proceeds from (-), payments of (+) | 0.0 | | -0.3 | | -0.2 |
| short-term receivables | | | | | |
--------------------------------------------------------------------------------
| Dividends paid | -26.8 | | -15.8 | | -15.8 |
--------------------------------------------------------------------------------
| Net cash used in financing | 7.5 | | -28.0 | | -15.2 |
| activities | | | | | |
--------------------------------------------------------------------------------
| Translation differences in cash | -0.1 | | -0.2 | | -1.0 |
--------------------------------------------------------------------------------
| Change of cash and cash | 17.7 | | -4.6 | | 0.3 |
| equivalents | | | | | |
--------------------------------------------------------------------------------
| Cash and cash equivalents at | 44.4 | | 44.0 | | 44.0 |
| beginning of period | | | | | |
--------------------------------------------------------------------------------
| Cash and cash equivalents at end | 62.0 | | 39.4 | | 44.4 |
| of period | | | | | |
--------------------------------------------------------------------------------
| Change of cash and cash | 17.7 | | -4.6 | | 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 Intakes | 1-3/ | % of | 1-3/ | % of | R12M* | % of | 1-12/ | % of |
| by Business | 2007 | tota | 2006 | total | | total | 2006 | total |
| Area | | l | | | | | | |
--------------------------------------------------------------------------------
| Services 1) | 143. | 31 | 99.8 | 28 | 492.6 | 30 | 448.5 | 29 |
| | 8 | | | | | | | |
--------------------------------------------------------------------------------
| Standard | 196. | 43 | 142. | 40 | 646.2 | 39 | 592.7 | 38 |
| Lifting | 0 | | 6 | | | | | |
--------------------------------------------------------------------------------
| Heavy Lifting | 118. | 26 | 115. | 32 | 522.3 | 31 | 519.2 | 33 |
| | 3 | | 1 | | | | | |
--------------------------------------------------------------------------------
| ./. Internal | -28. | | -24. | | -91.5 | | -87.7 | |
| | 7 | | 9 | | | | | |
--------------------------------------------------------------------------------
| Total | 429. | 100 | 332. | 100 | 1 | 100 | 1 | 100 |
| | 4 | | 7 | | 569.6 | | 472.8 | |
--------------------------------------------------------------------------------
| 1) Excl. | | | | | | | | |
| Service | | | | | | | | |
| Contract Base | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Order Book | 1-3/2007 | 1-3/2006 | | | 1-12/2006 |
| total 2) | | | | | |
--------------------------------------------------------------------------------
| Total | 636. | | 510. | | | | 571.6 | |
| | 8 | | 8 | | | | | |
--------------------------------------------------------------------------------
| 2) Percentage of | | | | | | | |
| completion | | | | | | | |
| deducted | | | | | | | |
--------------------------------------------------------------------------------
| Sales by | 1-3/ | % of | 1-3/ | % of | R12M* | % of | 1-12/ | % of |
| Business Area | 2007 | tota | 2006 | total | | total | 2006 | total |
| | | l | | | | | | |
--------------------------------------------------------------------------------
| Services | 147. | 36 | 105. | 33 | 568.7 | 34 | 526.6 | 33 |
| | 8 | | 6 | | | | | |
--------------------------------------------------------------------------------
| Standard | 144. | 36 | 114. | 36 | 589.1 | 35 | 558.4 | 35 |
| Lifting | 7 | | 0 | | | | | |
--------------------------------------------------------------------------------
| Heavy Lifting | 113. | 28 | 98.4 | 31 | 506.4 | 30 | 490.8 | 31 |
| | 9 | | | | | | | |
--------------------------------------------------------------------------------
| ./. Internal | -25. | | -21. | | -97.8 | | -93.3 | |
| | 8 | | 3 | | | | | |
--------------------------------------------------------------------------------
| Total | 380. | 100 | 296. | 100 | 1 | 100 | 1 | 100 |
| | 5 | | 7 | | 566.3 | | 482.5 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating | 1-3/2007 | 1-3/2006 | R12M* | | 1-12/2006 |
| Profit (EBIT) | | | | | |
| by Business | | | | | |
| Area | | | | | |
--------------------------------------------------------------------------------
| | MEUR | Ebit | MEUR | Ebit | MEUR | Ebit | MEUR | Ebit % |
| | | % | | % | | % | | |
--------------------------------------------------------------------------------
| Services | 15.1 | 10.2 | 8.7 | 8.2 | 59.5 | 10.5 | 53.0 | 10.1 |
--------------------------------------------------------------------------------
| Standard | 17.0 | 11.8 | 8.0 | 7.0 | 60.5 | 10.3 | 51.5 | 9.2 |
| Lifting | | | | | | | | |
--------------------------------------------------------------------------------
| Heavy Lifting | 7.9 | 6.9 | 5.6 | 5.7 | 35.9 | 7.1 | 33.6 | 6.8 |
--------------------------------------------------------------------------------
| Group costs | -8.5 | | -7.4 | | -32.7 | | -31.6 | |
--------------------------------------------------------------------------------
| Consolidation | -0.7 | | -0.8 | | -0.8 | | -0.9 | |
| items | | | | | | | | |
--------------------------------------------------------------------------------
| Total | 30.8 | 8.1 | 14.0 | 4.7 | 122.3 | 7.8 | 105.5 | 7.1 |
--------------------------------------------------------------------------------
| *R12M = | | | | | | | | |
| Rolling 12 | | | | | | | | |
| Months | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Personnel by Business | 1-3/2007 | 1-3/2006 | 1-12/2006 |
| Area | | | |
--------------------------------------------------------------------------------
| (at the End of the | | % of | | % of | | % of |
| Period) | | total | | total | | total |
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| Services | 4 128 | 53 | 3 042 | 50 | 3 923 | 52 |
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| Standard Lifting | 2 321 | 30 | 2 047 | 33 | 2 333 | 31 |
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| Heavy Lifting | 1 173 | 15 | 898 | 15 | 1 131 | 15 |
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| Group staff | 183 | 2 | 138 | 2 | 162 | 2 |
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| Total | 7 805 | 100 | 6 125 | 100 | 7 549 | 100 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Average number of | 7 677 | | 6 024 | | 6 859 | |
| personnel during | | | | | | |
| period | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 2. GEOGRAPHICAL | | | | | | | |
| SEGMENTS | | | | | | | |
--------------------------------------------------------------------------------
| EUR | | | | | | | | |
| million | | | | | | | | |
--------------------------------------------------------------------------------
| Sales by | 1-3/ | % of | 1-3/ | % of | R12M* | % of | 1-12/ | % of |
| Market | 2007 | tota | 2006 | total | | total | 2006 | total |
| | | l | | | | | | |
--------------------------------------------------------------------------------
| Europe-Mid | 188. | 49 | 170.1 | 57 | 799.1 | 51 | 781.0 | 53 |
| dleEast-Af | 2 | | | | | | | |
| rica | | | | | | | | |
| (EMEA) | | | | | | | | |
--------------------------------------------------------------------------------
| Americas | 151. | 40 | 90.1 | 30 | 573.9 | 37 | 512.3 | 35 |
| (AME) | 7 | | | | | | | |
--------------------------------------------------------------------------------
| Asia-Pacif | 40.7 | 11 | 36.6 | 12 | 193.3 | 12 | 189.1 | 13 |
| ic (APAC) | | | | | | | | |
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| Total | 380. | 100 | 296.7 | 100 | 1 566.3 | 100 | 1 482.5 | 100 |
| | 5 | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| NOTES: | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| INVESTMENTS | | | | | |
--------------------------------------------------------------------------------
| EUR million | 31.03.2007 | 31.03.2006 | 31.12.2006 |
--------------------------------------------------------------------------------
| Investments Total | 5.4 | | 3.1 | | 16.3 |
| (excl.Acquisitions) | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| NET INTEREST BEARING LIABILITIES | | | | |
--------------------------------------------------------------------------------
| EUR million | 31.03.2007 | 31.03.2006 | 31.12.2006 |
--------------------------------------------------------------------------------
| Long- and short-term | -204.5 | | -162.7 | | -173.3 |
| interest bearing liabilities | | | | | |
--------------------------------------------------------------------------------
| Cash and cash equivalents | 62.7 | | 40.1 | | 45.0 |
| and other interest bearing | | | | | |
| assets | | | | | |
--------------------------------------------------------------------------------
| Total | -141.8 | | -122.6 | | -128.2 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CONTINGENT LIABILITIES AND PLEDGED ASSETS | | | |
--------------------------------------------------------------------------------
| EUR million | 31.03.2007 | 31.03.2006 | 31.12.2006 |
--------------------------------------------------------------------------------
| Contingent liabilities | | | | | |
--------------------------------------------------------------------------------
| For own debts | | | | | |
--------------------------------------------------------------------------------
| Mortgages on land and | 0.0 | | 5.9 | | 0.7 |
| buildings | | | | | |
--------------------------------------------------------------------------------
| For own commercial | | | | | |
| obligations | | | | | |
--------------------------------------------------------------------------------
| Pledged assets | 1.1 | | 0.2 | | 1.1 |
--------------------------------------------------------------------------------
| Guarantees | 154.0 | | 125.2 | | 136.3 |
--------------------------------------------------------------------------------
| Other contingent liabilities and | | | |
| financial liabilities | | | |
--------------------------------------------------------------------------------
| Leasing liabilities | | | | | |
--------------------------------------------------------------------------------
| Next year | 11.8 | | 44.2 | | 11.1 |
--------------------------------------------------------------------------------
| Later on | 26.0 | | 0.7 | | 26.0 |
--------------------------------------------------------------------------------
| Other | 1.5 | | | | 1.0 |
--------------------------------------------------------------------------------
| Total | 194.4 | | 176.2 | | 176.2 |
--------------------------------------------------------------------------------
| Leasing contracts follow the normal |
| practices in corresponding countries. |
--------------------------------------------------------------------------------
| Total by category | | | | | |
--------------------------------------------------------------------------------
| Mortgages on land and | 0.0 | | 5.9 | | 0.7 |
| buildings | | | | | |
--------------------------------------------------------------------------------
| Pledged assets | 1.1 | | 0.2 | | 1.1 |
--------------------------------------------------------------------------------
| Guarantees | 154.0 | | 125.2 | | 136.3 |
--------------------------------------------------------------------------------
| Other liabilities | 39.3 | | 44.9 | | 38.1 |
--------------------------------------------------------------------------------
| Total | 194.4 | | 176.2 | | 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 in the account the
insurance arrangements the group has in place.
--------------------------------------------------------------------------------
| NOTIONAL AND FAIR VALUES OF DERIVATIVE FINANCIAL INSTRUMENTS | |
--------------------------------------------------------------------------------
| EUR million | 3/2007 | 3/2007 | 3/2006 | 3/2006 | 12/2006 | 12/2006 |
--------------------------------------------------------------------------------
| | Nominal | Fair | Nomina | Fair | Nominal | Fair |
| | value | value | l | value | value | value |
| | | | value | | | |
--------------------------------------------------------------------------------
| Foreign exchange | 176.8 | 2.7 | 260.6 | -1.8 | 279.7 | 3.0 |
| forward contracts | | | | | | |
--------------------------------------------------------------------------------
| Electricity | 1.2 | 0.0 | 0.7 | 0.5 | 1.1 | 0.1 |
| derivatives | | | | | | |
--------------------------------------------------------------------------------
| Total | 178.1 | 2.7 | 261.3 | -1.3 | 280.8 | 3.1 |
--------------------------------------------------------------------------------
Derivatives are used for hedging currency and interest rate risks as well as
risk of price fluctuation of electricity. Company applies hedge accounting on
derivatives used to hedge cash flows in Heavy Lifting projects.
ACQUISITIONS
During the first quarter in 2007 Konecranes made few small 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 a maintenance service business
of a small Swedish-based company El&Travers. In March Konecranes made an asset
purchase agreement with Spanish company Sistemas de Elevacion, operating in the
field of port service. The preliminary fair values of the identifiable assets
and liabilities of acquired businesses at the date of acquisitions are
summarized below.
--------------------------------------------------------------------------------
| EUR million | 3/2007 | 3/2007 |
--------------------------------------------------------------------------------
| | Recognized on | Carrying |
| | acquisition | value |
--------------------------------------------------------------------------------
| Intangible assets | 1.0 | 0.2 |
--------------------------------------------------------------------------------
| Tangible assets | 0.2 | 0.2 |
--------------------------------------------------------------------------------
| Deferred tax assets | 0.0 | 0.0 |
--------------------------------------------------------------------------------
| Inventories | 4.0 | 4.0 |
--------------------------------------------------------------------------------
| Receivables and other assets | 0.0 | 0.0 |
--------------------------------------------------------------------------------
| Cash and bank | 0.0 | 0.0 |
--------------------------------------------------------------------------------
| Total assets | 5.2 | 4.5 |
--------------------------------------------------------------------------------
| Liabilities | 0.1 | 0.0 |
--------------------------------------------------------------------------------
| Net assets | 5.2 | 4.4 |
--------------------------------------------------------------------------------
| Acquisition costs | 5.4 | |
--------------------------------------------------------------------------------
| Goodwill | 0.3 | |
--------------------------------------------------------------------------------
| Cash outflow on acquisition | | |
--------------------------------------------------------------------------------
| Acquisition costs paid in cash | 5.1 | |
--------------------------------------------------------------------------------
| Cash and cash equivalents of acquired | 0.0 | |
| companies | | |
--------------------------------------------------------------------------------
| Net cash flow arising on acquisition | 5.1 | |
--------------------------------------------------------------------------------
| Cost of the business combination | | |
--------------------------------------------------------------------------------
| Acquisition costs paid in cash | 5.1 | |
--------------------------------------------------------------------------------
| Liabilities assumed | 0.3 | |
--------------------------------------------------------------------------------
| Total cost of business combination | 5.4 | |
--------------------------------------------------------------------------------
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 are applied in 2006 annual
financial statements, except the change in Segment reporting.
At the beginning of year 2007 in Business Area segment Konecranes branded spare
parts are reported in the Service Business Area, while they were earlier partly
included in Standard Lifting. Also the geographical Segment reporting structure
has 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
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 27 April, 2007
Analyst and press briefing
A luncheon presentation for media and analysts will be held at Konecranes office
in Helsinki at 1.00 p.m Finnish Time (address: Eteläesplanadi 22 B).
Live webcast
A live webcast of the presentation for analysts and media will begin at 1.00
p.m. 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 Interim Report January - June 2007 will be published on 1 August,
2007 10.00 a.m.
KONECRANES PLC
Paul Lönnfors
IR Manager
FURTHER INFORMATION
Mr Pekka Lundmark, President and CEO, tel. +358-20 427 2000
Mr Teuvo Rintamäki, 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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