KONECRANES PLC INTERIM REPORT April 28, 2010 at 9:30 a.m.
SIGNS OF RECOVERY IN SERVICE, EQUIPMENT DEMAND LOW, FIRST QUARTER PROFIT DOWN
ON LOW VOLUME
Figures in brackets, unless otherwise stated, refer to the same period a year
earlier
FIRST QUARTER HIGHLIGHTS
- Order intake EUR 320.6 million (369.7), -13.3 percent: Service +11.3 percent
and Equipment -25.7 percent.
- Order book EUR 641.3 million (792.0) at end March, 19.0 percent lower than a
year ago, 5.7 percent higher than at end 2009.
- Sales EUR 306.3 million (442.1), -30.7 percent: Service -12.8 percent and
Equipment -39.0 percent.
- Cost reduction according to plan.
- Operating profit EUR 11.6 million (36.8), 3.8 percent of sales (8.3).
- Earnings per share (diluted) EUR 0.15 (0.43).
- Net cash EUR 46.6 million (net debt of 37.8) and gearing -12.4 percent (10.0).
FUTURE PROSPECTS
Konecranes reiterates the previous guidance for the year 2010 for sales and
operating profit, but changes the Service demand outlook as a result of improved
market situation. The new guidance is:
Konecranes expects the market uncertainty to continue. However, the demand
outlook for maintenance services has improved as a result of higher capacity
utilization within customer industries. The demand for new equipment is expected
to remain generally on a low level, and to suffer because of overcapacity at
customers. Price competition is likely to remain. A high degree of fluctuation
between quarters may continue due to the timing of orders.
Due to the lower order book compared to a year ago, our forecast is that sales
in 2010 will be lower than in 2009. We expect the operating profit in 2010 to be
lower than in 2009 before restructuring costs.
The previous statement on the future prospects from February 4, 2010
was:
“Despite a slight pick-up in industrial output in the second half of 2009,
Konecranes expects the uncertainty to continue, with no credible signs of market
recovery visible. The demand for maintenance services is expected to remain
stable or to increase gradually should capacity utilization within customer
industries continue to improve. The demand for new equipment is expected to
remain generally on a low level, and to suffer from overcapacity at customers.
Price competition is likely to remain. A high degree of fluctuation between
quarters may continue due to the timing of orders.
The year 2010 began with a thinner order book than the previous year. Our
forecast is that sales in 2010 will be lower than in 2009. We expect the
operating profit in 2010 to be lower than in 2009 before restructuring costs.”
KEY FIGURES
--------------------------------------------------------------------------------
| | 1-3/ | 1-3/ | Change | R12M | 2009 |
| | 2010 | 2009 | % | | |
--------------------------------------------------------------------------------
| Orders received, MEUR | 320.6 | 369.7 | -13.3 | 1 299.8 | 1 348.9 |
--------------------------------------------------------------------------------
| Order book at end of | 641.3 | 792.0 | -19.0 | | 607.0 |
| period, MEUR | | | | | |
--------------------------------------------------------------------------------
| Sales total, MEUR | 306.3 | 442.1 | -30.7 | 1 535.4 | 1 671.3 |
--------------------------------------------------------------------------------
| Operating profit | 11.6 | 36.8 | -68.6 | 93.6 | 118.8 |
| excluding restructuring | | | | | |
| costs, MEUR | | | | | |
--------------------------------------------------------------------------------
| Operating margin | 3.8 % | 8.3 % | | 6.1 % | 7.1 % |
| excluding restructuring | | | | | |
| costs, % | | | | | |
--------------------------------------------------------------------------------
| Operating profit | 11.6 | 36.8 | -68.6 | 72.7 | 97.9 |
| including restructuring | | | | | |
| costs, MEUR | | | | | |
--------------------------------------------------------------------------------
| Operating margin | 3.8 % | 8.3 % | | 4.7 % | 5.9 % |
| including restructuring | | | | | |
| costs, % | | | | | |
--------------------------------------------------------------------------------
| Profit before taxes, | 12.4 | 35.4 | -64.9 | 65.6 | 88.6 |
| MEUR | | | | | |
--------------------------------------------------------------------------------
| Net profit for the | 8.8 | 25.3 | -65.4 | 46.0 | 62.5 |
| period, MEUR | | | | | |
--------------------------------------------------------------------------------
| Earnings per share, | 0.15 | 0.43 | -64.7 | 0.80 | 1.08 |
| basic, EUR | | | | | |
--------------------------------------------------------------------------------
| Earnings per share, | 0.15 | 0.43 | -64.8 | 0.80 | 1.08 |
| diluted, EUR | | | | | |
--------------------------------------------------------------------------------
| Gearing, % | -12.4 % | 10.0 % | | | -19.1 % |
--------------------------------------------------------------------------------
| Return on capital | | | | 14.6 % | 19.3 % |
| employed %, Rolling 12 | | | | | |
| Months (R12M) | | | | | |
--------------------------------------------------------------------------------
| Average number of | 9 672 | 9 885 | -2.2 | | 9 811 |
| personnel during the | | | | | |
| period | | | | | |
--------------------------------------------------------------------------------
President and CEO Pekka Lundmark comments:
“Our deliveries in the first quarter were very low. The reason is our normal
seasonality with a slow beginning of the year and the effects of the weak order
intake throughout last year. Capacity utilization rates in most of our customer
industries are now on the increase. Service demand - including outsourced
service contracts, spare parts and modernizations - recovers first. This shows
through in our first quarter order intake. The demand for new equipment is still
weak in our largest markets in Western Europe and North America, but growing
especially in Asia.
Our operating profit in the first quarter is not satisfactory in absolute
numbers. However, on the positive, we were able to generate EUR 11.6 million
operating profit with very low sales - only EUR 306 million. Our cost reduction
efforts are delivering expected results. We have successfully defended our gross
margin in spite of market price pressures, and we have reduced our fixed costs
through streamlining our organization.“
KONECRANES' JANUARY - MARCH 2010 INTERIM REPORT
ChangeS in Reporting Method
Konecranes changed its structure from the beginning of 2010 so that Business
Areas Standard Lifting and Heavy Lifting were merged into one Business Area:
Equipment. External segment reporting was also changed to match with the
operational structure of the group. From 2010, Konecranes reports two segments,
Service and Equipment. While the number of segments was reduced from three to
two, Konecranes discloses more information than before about the segments on a
quarterly basis. The new information includes EBITDA, depreciation and
impairments, capital employed, ROCE and capital expenditure.
To further improve the transparency of segment profitability, the allocation of
Group costs into the business areas has been redefined. Previously, centralized
Market Operations, procurement, R&D and IT costs were reported as unallocated
group costs. From 2010 these costs are allocated to the business areas. The
reporting of centralized legal, marketing & communications, finance, HR and
general management costs remain unchanged and these will continue to be shown as
unallocated group costs. Additionally, the reporting of elimination of internal
margins (consolidation items) in inventories has changed as a result of fewer
segments and internal margins within the business areas being incorporated in
the operating profit of the respective business area.
Konecranes published the 2009 comparison figures related to the segment
reporting change in a stock exchange release on February 24, 2010.
In addition, unrealized exchange rate differences relating to the hedging of
trade receivables and payables that are not included in IFRS hedge accounting
have been reported as part of net sales and cost of goods sold above the
operating profit from 2010. Previously these items were reported in financial
income and expenses. It is not possible to recalculate accurately the impact of
this change on 2009 numbers as a result of which restating of the 2009 numbers
has not been done for this change. However, it is estimated that the change
would only have a minor impact on the segment operating profits in 2009. There
would not be any change in profit before taxes in 2009.
MARKET REVIEW
The gradual turnaround in the global economy that started in the autumn of 2009
continued in the first quarter of 2010. Further fuelled by easy monetary
policies and low interest rates, global macro indicators improved on broad basis
and even exceeded expectations in many cases. Growth rates in the emerging
markets continued to exceed those in the developed countries.
Industrial capacity utilization improved both in Europe and the US in the first
quarter, but was still low by historical standards and below the previous trough
in late 2001. Purchasing managers' indexes were buoyant across the globe, all
pointing to expanding business activity.
Demand for new equipment continued to suffer from overcapacity across customer
segments. Demand from the manufacturing and process industries remained weak,
while investments in various types of energy production and by sectors serving
the energy industry remained robust. Investments in ports and shipbuilding
continued to be at a very low level despite the gradual increase in shipping
volumes. New inquiries from steel, petrochemical and mining sectors continued to
increase steadily. Intense price competition persisted due to the overcapacity
in the crane manufacturing industry.
Demand for services relating to lifting equipment and machine tools has started
to gradually improve due to pick-up in capacity utilization within customer
industries. Customers have continued to show a growing interest to outsource
maintenance.
There continued to be signs of increasing cost pressures on steel, copper and
sea freight in January-March, but this did not have a material impact on paid
costs in the first quarter. The US dollar appreciated against EUR during the
first quarter, but was still slightly weaker than a year ago.
Note: Unless otherwise stated, the figures in brackets in the sections below
refer to the same period in the previous year.
ORDERS RECEIVED
January-March orders received totaled EUR 320.6 million (369.7), representing a
decline of 13.3 percent. Orders received grew by 11.3 percent in Service, but
declined by 25.7 percent in Equipment compared with a year before.
The decline in Group orders received was attributable to the lower Equipment
orders in EMEA and the Americas. However, Service orders grew in both regions.
In APAC, both business areas saw higher orders than a year ago in particular as
a result of the stronger Chinese economy.
ORDER BOOK
The value of the order book at end March totaled EUR 641.3 million. The order
book increased by 5.7 percent from year-end 2009 when it stood at EUR 607.0
million, but it remained 19.0 percent below last year's comparison figure of EUR
792.0 million. Service accounted for EUR 87.7 million (14 percent) and Equipment
for EUR 558.2 million (86 percent) of the total end March order book.
SALES
Group sales in January-March declined by 30.7 percent to EUR 306.3 million
(442.1). Sales in Service fell by 12.8 percent and in Equipment by 39.0 percent.
The Finnish port strike and tough weather conditions during the winter moved
certain deliveries from the first to the second quarter.
Acquisitions contributed about 3 percentage points to sales in the first quarter
of 2010.
At end March, calculated for a rolling 12 months, the regional breakdown was as
follows: EMEA 56 (57), Americas 28 (28) and APAC 16 (15) percent.
Net sales by region, MEUR
--------------------------------------------------------------------------------
| | 1-3/2010 | 1-3/2009 | Change | Change % at | R12M | 2009 |
| | | | percent | comparable | | |
| | | | | currency | | |
| | | | | rates | | |
--------------------------------------------------------------------------------
| EMEA | 173.0 | 246.4 | -29.8 | -31.1 | 854.5 | 928.0 |
--------------------------------------------------------------------------------
| AME | 86.6 | 132.7 | -34.8 | -32.9 | 433.4 | 479.5 |
--------------------------------------------------------------------------------
| APAC | 46.7 | 63.0 | -25.8 | -27.9 | 247.5 | 263.8 |
--------------------------------------------------------------------------------
| Total | 306.3 | 442.1 | -30.7 | -31.1 | 1 535.4 | 1 671.3 |
--------------------------------------------------------------------------------
CURRENCY RATE EFFECT
In a year-on-year comparison, the currency rate effect was small in the
reporting period. The reported decline in order intake in January-March was 13.3
percent whereas the corresponding figure at comparable currency rates was 13.8
percent. Reported sales fell by 30.7 percent or by 31.1 percent at comparable
currency rates.
The reported order intake increased in Service by 11.3 percent or by 9.3 percent
at comparable currency rates. Reported sales decreased in Service by 12.8
percent or by 13.4 percent at comparable currency rates. In Equipment, the
reported order intake decreased by 25.7 percent or by 25.5 percent at comparable
currency rates. The corresponding figures in Equipment sales were -39.0 percent
and -38.5 percent.
Of the regions, the currency rate impact in EMEA was positive with the reported
decline in sales being 29.8 percent whereas the decline at comparable currency
rates was 31.1 percent. The impact was negative in the Americas region, where
reported sales declined by 34.8 percent or by 32.9 percent at comparable
currency rates. The corresponding figures in APAC were -25.8 and -27.9 percent.
The changes in currency rates did not have an impact on the Group's operating
margin in January-March compared with the same period a year earlier.
FINANCIAL RESULT
The consolidated operating profit in January-March totaled EUR 11.6 million
(36.8). Operating profit decreased by EUR 25.2 million and the consolidated
operating margin declined to 3.8 percent (8.3). The operating margin in the
Service business declined to 6.6 percent (9.3) whereas in Equipment it fell to
3.3 percent (8.8).
Both business areas suffered from clearly lower volumes than last year. The
implemented cost savings lowered fixed costs compared to a year ago, which
partly offset the under absorption of the cost base. Procurement cost savings
and adjustment of production capacity offset the product price pressure.
Depreciation and impairments totaled EUR 7.3 million (6.8).
The share of the result of associated companies and joint ventures was EUR 0.1
million (0.0).
Financial income and expenses totaled EUR 0.7 million (-1.5). Net interests were
EUR -0.4 million (-0.5) while the remainder was mainly attributable to
unrealized exchange rate gains.
The January-March profit before taxes was EUR 12.4 million (35.4).
Income taxes in January-March were EUR 3.7 million (10.1). The Group's effective
tax rate was 29.5 percent (28.5).
Net profit for January-March was EUR 8.8 million (25.3).
Diluted earnings per share for January-March were EUR 0.15 (0.43).
On a rolling twelve-month basis, return on capital employed was 14.6 percent
(50.4) and return on equity 12.2 percent (49.4).
Balance Sheet
The end March 2010 consolidated balance sheet amounted to EUR 1,112.7 million
(1,182.2). Total equity at the end of the report period was EUR 373.7 million
(379.7). Total equity attributable to equity holders of the parent company at 31
March was EUR 369.0 million (377.9) or EUR 6.26 per share (6.38).
Net working capital at end March 2010 totaled EUR 102.5 million, which was EUR
36.3 million less than at year-end 2009 and EUR 164.5 million less than a year
ago. However, adjusted for the unpaid dividends, which were reported in the
accruals at March 31, net working capital amounted to EUR 156.0 million.
Adjusted for the unpaid dividends, net working capital rose by EUR 17.2 million
from the year-end 2009 due to the increase in work in progress.
Cash Flow and Financing
Net cash from operating activities in January-March was EUR 0.5 million (32.6),
representing EUR 0.01 per diluted share (0.55). Cash flow before financing
activities was EUR -34.5 million (27.6).
Interest-bearing net debt was EUR -46.6 million at the end of March 2010,
compared to EUR -77.7 million at end 2009 and compared to EUR 37.8 million a
year ago. In 2010, dividends were paid out in April whereas in 2009 dividends
were paid out already in March. The solidity was 40.2 percent (38.5) and gearing
-12.4 percent (10.0).
The Group's liquidity remained healthy. At the end of the first quarter, cash
and cash equivalents amounted to EUR 121.1 million (116.0). None of the Group's
EUR 200 million committed back-up financing facility was in use at the end of
the period.
CAPITAL EXPENDITURE
January-March capital expenditure excluding acquisitions amounted to EUR 4.2
million (6.0). This amount consisted mainly of replacement or capacity expansion
investments in machines, equipment and information technology.
Capital expenditure including acquisitions and investments in associated
companies was EUR 33.6 million (6.6).
ACQUISITIONS
Capital expenditure on acquisitions and investments in associated companies was
EUR 29.4 million (0.6). During January-March, Konecranes acquired two small
Machine Tool Service companies, one in Denmark and one in the UK. The net assets
of the acquired companies were recorded at EUR 1.4 million and goodwill of EUR
1.1 million was booked from the acquisitions.
Konecranes and the Japanese hoist, crane and material handling equipment company
Kito Corporation (“Kito”) entered into a strategic alliance. The alliance
agreement was signed by representatives of the two companies on March 23, 2010.
To fully utilize the global market potential and mutually complement each other,
Konecranes will enter into an agreement to sell Kito manual products while Kito
will sell wire rope hoists made by Konecranes. Moreover, the parties will
jointly examine the possibilities to co-operate in distribution and license
manufacturing of other products as well as in procurement. Under the alliance
agreement, the parties have agreed to negotiate definitive distribution and
license agreements by the end of June 2010. Both companies will retain their own
identity and independence under this alliance based on mutual trust and equal
partnership.
To reinforce the strategic alliance, Konecranes purchased 29,750 shares (22.0%
of the share capital and voting rights) in Kito through negotiated transaction
from funds controlled by The Carlyle Group. The purchase price for the shares in
Kito was JPY 111,800 per share and the settlement date was March 24, 2010. The
total value of the stake purchased amounted to approximately JPY 3.3 billion
(EUR 27 million). The purchase was financed with existing cash reserves.
Furthermore, Kito repurchased 10.0% of the share capital on March 24, 2010. Post
the share purchase by Konecranes and the Kito share buyback, Konecranes has
approximately 24.4% of the voting rights in Kito.
The shareholding has been included in investments accounted for using the equity
method in the balance sheet on March 31. Kito will be included in Konecranes'
statement of income as an associated company. The benefits of the alliance are
not expected to have a material impact on Konecranes' net sales and operating
profit in 2010.
As part of the strategic alliance, Konecranes and Kito have signed a Memorandum
of Understanding according to which Konecranes intends to sell the hoist
distribution business of its Japanese subsidiary MHS Konecranes to Kito. After
the sale, Konecranes will continue its end-user customer business in Japan as a
supplier of cranes and crane service to local customers. Prior to the final
agreement, Konecranes intends to increase its ownership in MHS Konecranes to
100% by acquiring the remaining 35% stake from Meidensha Corporation. Konecranes
and Kito aim to transfer the hoist distribution business of MHS Konecranes by no
later than July 2010.
PERSONNEL
In the first quarter, the Group employed an average of 9,672 people (9,885). At
March 31, the headcount was 9,562 (9,866). At end March, the number of personnel
by Business Area were as follows: Service 4,926 employees (5,494), Equipment
4,586 employees (4,317) and Group staff 50 (55). The Group had 5,466 employees
(5,626) working in EMEA, 2,171 (2,654) in the Americas and 1,925 (1,586) in the
APAC region.
BUSINESS AREAS
Service
--------------------------------------------------------------------------------
| | 1-3/ | 1-3/ | Change | R12M | 2009 |
| | 2010 | 2009 | percent | | |
--------------------------------------------------------------------------------
| Orders received | 139,8 | 125,6 | 11,3 | 512,6 | 498,4 |
--------------------------------------------------------------------------------
| Order book | 87,7 | 109,1 | -19,6 | | 75,9 |
--------------------------------------------------------------------------------
| Net sales | 148,0 | 169,7 | -12,8 | 645,5 | 667,2 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EBITDA | 12,4 | 18,0 | -31,5 | 62,9 | 68,6 |
--------------------------------------------------------------------------------
| EBITDA, % | 8,3 % | 10,6 % | | 9,7 % | 10,3 % |
--------------------------------------------------------------------------------
| Depreciation and | -2,5 | -2,3 | 9,6 | -10,5 | -10,3 |
| amortization | | | | | |
--------------------------------------------------------------------------------
| Operating profit (EBIT) | 9,8 | 15,7 | -37,5 | 55,1 | 61,0 |
| excluding restructuring | | | | | |
| costs | | | | | |
--------------------------------------------------------------------------------
| Operating profit (EBIT) | 6,6 % | 9,3 % | | 8,5 % | 9,1 % |
| excluding restructuring | | | | | |
| costs, % | | | | | |
--------------------------------------------------------------------------------
| Restructuring costs | 0,0 | 0,0 | | -2,7 | -2,7 |
--------------------------------------------------------------------------------
| Operating profit (EBIT) | 9,8 | 15,7 | -37,5 | 52,4 | 58,3 |
--------------------------------------------------------------------------------
| Operating profit (EBIT), | 6,6 % | 9,3 % | | 8,1 % | 8,7 % |
| % | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Capital employed | 133,1 | 151,2 | -12,0 | | 130,7 |
--------------------------------------------------------------------------------
| ROCE% | | | | 36,9 % | 43,8 % |
--------------------------------------------------------------------------------
| Capital expenditure | 1,0 | 1,7 | -43,3 | 7,0 | 7,7 |
--------------------------------------------------------------------------------
| Personnel at the end of | 4 926 | 5 494 | -10,3 | | 4 991 |
| period | | | | | |
--------------------------------------------------------------------------------
January-March orders received rose by 11.3 percent to EUR 139.8 million (125.6).
New orders grew in all geographic regions, but particularly in EMEA and APAC.
Order intake increased across several business units with particular strength in
Modernization due to large single orders.
Compared with the fourth quarter 2009, the order intake increased by 14.7
percent. Americas' Service operations made a recovery following the sluggish
performance of the second half of 2009. Orders for Parts continued to grow
sequentially.
The order book decreased by 19.6 percent from a year before to EUR 87.7 million
(109.1), but increased by 15.5 percent from year-end 2009.
Sales in the report period fell by 12.8 percent to EUR 148.0 million (169.7).
Operating profit was EUR 9.8 million (15.7) and the operating margin 6.6 percent
(9.3). Profitability weakened due to lower volumes.
The contract base developed favorably, in terms of both value and number of
units. The total number of equipment included in the maintenance contract base
increased to 367,124 at end March, from 366,024 a year before and from 362,996
at year-end 2009. The annual value of the contract base increased to EUR 131.7
million from EUR 127.4 million a year before and from EUR 122.3 million at
year-end 2009. Approximately a half of the increase in the value of the contract
base from the end of 2009 was attributable to the strengthening of key
currencies.
The number of service technicians at end March was 3,192, which is 385 or 10.8
percent less than at the end of March 2009.
Equipment
--------------------------------------------------------------------------------
| | 1-3/ | 1-3/ | Change | R12M | 2009 |
| | 2010 | 2009 | percent | | |
--------------------------------------------------------------------------------
| Orders received | 196,2 | 263,9 | -25,7 | 866,9 | 934,6 |
--------------------------------------------------------------------------------
| Order book | 558,2 | 701,9 | -20,5 | | 547,8 |
--------------------------------------------------------------------------------
| Net sales | 185,8 | 304,6 | -39,0 | 996,3 | 1 115,1 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EBITDA | 10,7 | 30,9 | -65,4 | 59,3 | 79,5 |
--------------------------------------------------------------------------------
| EBITDA, % | 5,7 % | 10,1 % | | 5,9 % | 7,1 % |
--------------------------------------------------------------------------------
| Depreciation and | -4,6 | -4,1 | 13,9 | -21,5 | -21,0 |
| amortization | | | | | |
--------------------------------------------------------------------------------
| Operating profit (EBIT) | 6,0 | 26,8 | -77,4 | 56,0 | 76,7 |
| excluding restructuring | | | | | |
| costs | | | | | |
--------------------------------------------------------------------------------
| Operating profit (EBIT) | 3,3 % | 8,8 % | | 5,6 % | 6,9 % |
| excluding restructuring | | | | | |
| costs, % | | | | | |
--------------------------------------------------------------------------------
| Restructuring costs | 0,0 | 0,0 | | -18,2 | -18,2 |
--------------------------------------------------------------------------------
| Operating profit (EBIT) | 6,0 | 26,8 | -77,4 | 37,7 | 58,5 |
--------------------------------------------------------------------------------
| Operating profit | 3,3 % | 8,8 % | | 3,8 % | 5,2 % |
| (EBIT), % | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Capital employed | 194,7 | 289,5 | -32,8 | | 208,7 |
--------------------------------------------------------------------------------
| ROCE% | | | | 15,6 % | 22,9 % |
--------------------------------------------------------------------------------
| Capital expenditure | 3,2 | 3,6 | -10,0 | 16,6 | 17,0 |
--------------------------------------------------------------------------------
| Personnel at the end of | 4 586 | 4 317 | 6,2 | | 4 742 |
| period | | | | | |
--------------------------------------------------------------------------------
January-March orders received totaled EUR 196.2 million (263.9), showing a
decline of 25.7 percent. Orders decreased particularly in EMEA, but also in the
Americas. However, new orders grew in APAC due to the growth in China. Orders
for Industrial Cranes accounted for close to a half of the orders received and
were lower than a year ago. Components generated approximately 30 percent of the
new orders, which were below last year's level. The combined orders for the
other business units (Nuclear Cranes, Port Cranes and Lift Trucks) amounted to
approximately 20 percent of the orders received, representing a decline compared
to the comparison period due to the lack of large single orders, which boosted
last year's figure.
Compared with the fourth quarter 2009, the order intake decreased by 25.2
percent. New orders declined mainly in EMEA, but also in APAC. However, orders
received grew in the Americas. Orders for Industrial Cranes were stable.
Component orders continued to improve sequentially. However, orders for other
equipment declined due to the lack of large single orders.
The order book decreased by 20.5 percent from a year before to EUR 558.2 million
(701.9), but increased by 1.9 percent from the year-end 2009.
Sales fell by 39.0 percent to EUR 185.8 million (304.6). Sales decreased in all
geographic areas and business units. The mix of sales was similar to that of
orders received. Operating profit was EUR 6.0 million (26.8) and operating
margin 3.3 percent (8.8). Profitability weakened due to declining volumes. The
negative profit impact from lower volumes could not be fully offset by the cost
savings actions.
Group Overheads
Unallocated Group overhead costs and eliminations in the reporting period were
EUR -4.3 million (-5.7), representing 1.4 percent of sales (1.3).
ADMINISTRATION
Konecranes Annual General Meeting was held March 25, 2010. The meeting approved
the company's annual accounts for the fiscal year 2009 and discharged the
members of the Board of Directors and Managing Director from liability.
Payment of dividend
The AGM approved the Board's proposal that a dividend of EUR 0.90 per share is
paid from the distributable assets of the parent company. The dividend was paid
on 59,426,320 shares and amounted to EUR 53,483,688. The dividend was paid on
April 9, 2010.
Composition of the Board of Directors
The AGM approved the proposal of the Nomination and Compensation Committee that
eight (8) members of the Board of Directors be elected. The Board members
elected at the AGM in 2009 i.e. Mr Svante Adde, Mr Tomas Billing, Mr Kim Gran,
Mr Stig Gustavson, Mr Tapani Järvinen, Mr Matti Kavetvuo, Ms Malin Persson and
Mr Mikael Silvennoinen were re-elected.
Compensation of the Board of Directors
The AGM confirmed the annual compensation to the Board members:
Chairman of the Board: EUR 100,000
Vice Chairman of the Board: EUR 64,000
Other Board Members: EUR 40,000
In addition, compensation of EUR 1,500 per meeting will be paid for attendance
at Board Committee meetings.
Approximately 40 percent of the annual remuneration will be paid in Konecranes'
shares purchased from the market. The remuneration may be paid also by
transferring company's own shares based on the authorization given to the Board
of Directors. In case the purchase of shares cannot be carried out due to
reasons related to either the company or the Board member, the annual
remuneration shall be paid fully in cash.
Travel expenses of Board members are compensated for against receipt.
Election of the auditors and their remuneration
According to the Articles of Association, the auditors are elected to office
until further notice. The AGM confirmed that Ernst & Young Oy continues as the
Company's external auditor. The remuneration of the auditor will be paid
according to the auditor's reasonable invoice.
Amendment of the Articles of Association
The AGM decided to amend the Section 9 of the Articles of Association so that
notice to the General Meeting shall be delivered no less than three weeks before
the General Meeting, however no less than 9 days prior to the record date of the
General Meeting. The AGM also approved that the notice, by decision by the Board
of Directors, can be delivered by publishing the notice on the Company's website
or in national newspapers or by sending written notices to the shareholders by
mail. Furthermore, the AGM confirmed that the General Meeting may, in addition
to the Company's domicile, be held in Helsinki, Espoo or Vantaa.
Authorization of the Board of Directors to decide on the issuance of shares as
well as on the issuance of special rights entitling to shares
The AGM authorized the Board of Directors to decide on the issuance of shares as
well as the issuance of special rights entitling to shares referred to in
chapter 10 section 1 of the Finnish Companies Act as follows.
The amount of shares to be issued based on this authorization shall not exceed
9,000,000 shares, which corresponds to approximately 14.5 percent of all of the
shares in the Company.
The Board of Directors decides on all the conditions of the issuance of shares
and of special rights entitling to shares. The issuance of shares and of special
rights entitling to shares may be carried out in deviation from the
shareholders' pre-emptive rights (directed issue). However, the authorization
cannot be used for incentive arrangements.
The authorization is effective until the end of the next Annual General Meeting,
however no longer than until 24 September 2011.
Authorization of the Board of Directors to repurchase the Company's own shares
The AGM authorized the Board of Directors to decide on the repurchase of the
Company's own shares and/or on the acceptance as pledge of the Company's own
shares as follows.
The amount of own shares to be repurchased and/or accepted as pledge shall not
exceed 6,000,000 shares in total, which corresponds to approximately 9.7 percent
of all of the shares in the Company. However, the Company together with its
subsidiaries cannot at any moment own and/or hold as pledge more than 10 per
cent of all the shares in the Company. Only the unrestricted equity of the
Company can be used to repurchase own shares on the basis of the authorization.
Own shares can be repurchased at a price formed in public trading on the date of
the repurchase or otherwise at a price formed on the market.
The Board of Directors decides how own shares will be repurchased and/or
accepted as pledge. Own shares can be repurchased using, inter alia,
derivatives. Own shares can be repurchased otherwise than in proportion to the
shareholdings of the shareholders (directed repurchase).
Own shares can be repurchased to limit the dilutive effects of share issues
carried out in connection with possible acquisitions, to develop the Company's
capital structure, to be transferred in connection with possible acquisitions,
to pay remuneration to Board members or to be cancelled, provided that the
repurchase is in the interest of the Company and its shareholders.
The authorization is effective until the end of the next Annual General Meeting,
however no longer than until 24 September 2011.
Authorization of the Board of Directors to decide on the transfer of the
Company's own shares
The AGM authorized the Board of Directors to decide on the transfer of the
Company's own shares as follows.
The authorization is limited to a maximum of 6,000,000 shares, which corresponds
to approximately 9.7 percent of all of the shares in the Company.
The Board of Directors decides on all the conditions of the transfer of own
shares. The transfer of shares may be carried out in deviation from the
shareholders' pre-emptive rights (directed issue). The Board of Directors can
also use this authorization to grant special rights concerning the Company's own
shares, referred to in Chapter 10 of the Companies Act. However, the
authorization cannot be used for incentive arrangements.
This authorization shall be effective until the next Annual General Meeting of
Shareholders, however no longer than until 24 September 2011.
Donation for philanthropic purposes
The AGM decided to grant a donation to one or more Finnish Universities in the
amount of EUR 1,250,000 to thereby support education and research within the
fields of technology, economy or art. Furthermore, the AGM authorized the Board
of Directors to decide on practical matters relating to the donation, for
example nomination of recipients and the detailed donation terms.
Board of Directors' organizing meeting
In its first meeting held after the Annual General Meeting, the Board of
Directors elected Mr Stig Gustavson to continue as Chairman. Mr Svante Adde was
elected Chairman of the Audit Committee, and Mr Kim Gran, Mr Tapani Järvinen and
Mr Mikael Silvennoinen as Committee members. Mr Matti Kavetvuo was elected
Chairman of the Nomination and Compensation Committee, and Mr Tomas Billing, Mr
Stig Gustavson, and Ms Malin Persson were elected as Committee members.
With the exception of Mr Stig Gustavson, the Board members are deemed to be
independent of the company under the Finnish Corporate Governance Code. Mr
Gustavson is deemed dependent of the company based on the Board's overall
evaluation relating to his former and current positions in Konecranes combined
with his substantial shareholding in the Company.
All Board members are independent of significant shareholders of the company.
SHARE CAPITAL AND SHARES
The company's registered share capital at March 31, 2010 totaled EUR 30.1
million. At March 31, 2010, the number of shares including treasury shares and
the shares owned by KCR Management Oy totaled 61,968,920. At March 31, 2010,
Konecranes held a total of 2,542,600 treasury shares, excluding the shares owned
by KCR Management Oy, which corresponds to 4.1 percent of the total number of
shares and which at that date had a market value of EUR 55.6 million.
SHARES REGISTERED UNDER STOCK OPTION RIGHTS
Pursuant to Konecranes' stock option plans, 96,000 new shares were subscribed
and registered in the Finnish Trade Register during the first quarter. As a
result of these subscriptions, the total number of Konecranes shares (including
treasury shares and the shares owned by KCR Management Oy) rose to 61,968,920.
The subscription period for the options under Konecranes 2001B stock option plan
ended on March 31, 2010. The last lot of the shares subscribed under the 2001B
stock option plan will be registered in the Finnish Trade Register on about May
4, 2010.
The stock options issued under Konecranes Plc's ongoing stock option plans (2007
and 2009) at end-March 2010 entitle holders to subscribe a total of 2,648,000
shares, which would increase the total number of Konecranes shares (including
treasury shares and the shares owned by KCR Management Oy) to 64,616,920. The
option programs include approximately 180 key persons.
All shares carry one vote per share and equal rights to dividends.
The terms and conditions of the stock option programs are available on
Konecranes' website at www.konecranes.com.
MARKET CAPITALIZATION AND TRADING VOLUME
The closing price for Konecranes Plc's shares on March 31, 2010 was EUR 21.87.
The volume-weighted average share price in January-March was EUR 21.36, the
highest price being EUR 24.30 in March and the lowest EUR 19.08 in January. In
January-March, the trading volume totaled 31 million Konecranes Plc shares,
corresponding to a turnover of approximately EUR 671 million. The average daily
trading volume was 506,322 shares, representing an average daily turnover of EUR
10.8 million.
On March 31, 2010, the total market capitalization of Konecranes Plc's shares
was EUR 1,355.3 million including treasury shares held by the company and the
shares held by KCR Management Oy. The market capitalization was EUR 1,288.3
million excluding the treasury shares and the shares held by KCR Management Oy.
FLAGGING NOTIFICATIONS
On February 24, 2010, HTT 2 Holding Ltd informed Konecranes that their holding
had exceeded 5 percent. HTT 2 Holding Ltd held 3,129,500 shares, which was 5.06
percent of Konecranes' shares and votes on February 24, 2010.
EVENTS AFTER THE END OF THE REPORTING PERIOD
On April 9, 2010, BlackRock, Inc. informed Konecranes that their holding had
exceeded 10 percent. BlackRock, Inc. held 6,228,000 shares, which was 10.05
percent of Konecranes' shares and votes on April 9, 2010.
RISKS AND UNCERTAINTIES
Konecranes reiterates the risks and uncertainties stated in the Financial
Statements on February 4, 2010. The Group's principal short-term risks and
uncertainties derive from a prolonged downturn in the world economy or other
unforeseen events. A decrease in demand for Konecranes' products and services
may have a continuing negative effect on the Group's sales volumes and pricing
power, and thus result in decreasing profits, a possible impairment of goodwill
and other assets, and inventory obsolescence.
The shortage of credit may cause difficulties to Konecranes' customers,
suppliers, and financial and other counterparties. The risk may be realized as a
shortage of supplies or defaulting liabilities. The Group has paid special
attention to securing customer payments and requiring strict terms for possible
postponements by customers. Increased attention is also being paid to the
financial status and business continuity of key subcontractors and vendors. As
of now, no such major risks have materialized. In the case of a continued
shortage of credit and a prolonged economic downturn, credit losses may
increase.
The continuing financial crisis may also lead to challenges in securing
liquidity. Although Konecranes has not faced difficulties in financing its
business operations, the Group aims to keep more cash in the balance sheet than
normally. Konecranes is supported by its solid financial position and strong
balance sheet in securing its liquidity.
Challenges in financing may lead customers to postpone projects or even to
cancel existing orders. Currently, the financial stringency has mainly been
visible in prolonged decision making times. As of now, no major cancellations
have occurred and advance payments represent about one fourth of the order book.
However, if longer postponements and potential cancellations of some major
projects actually occur, this may deteriorate the quality of the order book and
cause losses. Konecranes is paying increased attention to order book quality and
is continuously monitoring the status of orders.
Currency rate fluctuations may significantly affect the company's performance.
The USD/EUR exchange rate has the largest impact on financial performance
through a combination of the translational effect and transactional exposure.
FUTURE PROSPECTS
Konecranes reiterates the previous guidance for the year 2010 for sales and
operating profit, but changes the Service demand outlook as a result of improved
market situation. The new guidance is:
Konecranes expects the market uncertainty to continue. However, the demand
outlook for maintenance services has improved as a result of higher capacity
utilization within customer industries. The demand for new equipment is expected
to remain generally on a low level, and to suffer because of overcapacity at
customers. Price competition is likely to remain. A high degree of fluctuation
between quarters may continue due to the timing of orders.
Due to the lower order book compared to a year ago, our forecast is that sales
in 2010 will be lower than in 2009. We expect the operating profit in 2010 to be
lower than in 2009 before restructuring costs.
The previous statement on the future prospects from February 4, 2010
was:
“Despite a slight pick-up in industrial output in the second half of 2009,
Konecranes expects the uncertainty to continue, with no credible signs of market
recovery visible. The demand for maintenance services is expected to remain
stable or to increase gradually should capacity utilization within customer
industries continue to improve. The demand for new equipment is expected to
remain generally on a low level, and to suffer from overcapacity at customers.
Price competition is likely to remain. A high degree of fluctuation between
quarters may continue due to the timing of orders.
The year 2010 began with a thinner order book than the previous year. Our
forecast is that sales in 2010 will be lower than in 2009. We expect the
operating profit in 2010 to be lower than in 2009 before restructuring costs.”
Helsinki, April 28, 2010
Konecranes Plc
Board of Directors
Disclaimer
It should be noted that certain statements in this report, which are not
historical facts, including, without limitation, those regarding
- expectations for general economic development and market situation,
- expectations for general developments in the industry,
- expectations regarding customer industry profitability and investment
willingness,
- expectations for company growth, development and profitability,
- expectations regarding market demand for the company's products and services,
- expectations regarding the successful completion of acquisitions on a timely
basis and Konecranes' ability to achieve the set targets and synergies,
- expectations regarding competitive conditions,
- expectations regarding cost savings,
- and statements preceded by "believes," "expects," "anticipates," "foresees" or
similar expressions, are forward-looking statements. These statements are based
on current expectations, decisions and plans and currently known facts.
Therefore, they involve risks and uncertainties, which may cause actual results
to materially differ from the results currently expected by the company. Such
factors include, but are not limited to,
- general economic conditions, including fluctuations in exchange rates and
interest levels,
- the competitive situation, especially significant products or services
developed by our competitors,
- industry conditions,
- the company's own operating factors, including the success of production,
product development, project management, quality, and timely delivery of our
products and services and their continuous development,
- the success of pending and future acquisitions and restructurings.
Summary Financial Statements and Notes
ACCOUNTING PRINCIPLES
The presented financial information is prepared in accordance with International
Accounting Standard (IAS) 34, Interim Financial Reporting, as adopted by the EU.
As of January 1, 2010 Konecranes applied one amended standard: IFRS 3, Business
Combinations (Revised). In revised IFRS 3 the acquisition-related costs will be
expensed through statement of income at time that such services are received.
This is a significant difference from former practice in which such costs were
included in the cost of the business combination and therefore included in the
calculation of goodwill. The other year 2010 standards will have immaterial
impact on future financial statements.
Konecranes is introducing also new reporting segments. From the beginning of
2010, Konecranes will report two Business Areas: Service and Equipment.
Previously the number of reporting segments was three: Service, Standard Lifting
and Heavy Lifting. More information than before will be provided for each
segment, and the allocation of Group costs into the segments has been redefined
to improve transparency. The comparison figures in year 2009 have been changed
accordingly.
Otherwise Konecranes applies the same accounting policies as were applied in the
2009 annual financial statements.
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 numbers stated in this bulletin have not been subject to audit.
CONSOLIDATED STATEMENT OF INCOME
--------------------------------------------------------------------------------
| EUR million | 1-3/2010 | 1-3/2009 | Change | 1-12/2009 |
--------------------------------------------------------------------------------
| | | | % | |
--------------------------------------------------------------------------------
| Sales | 306.3 | 442.1 | -30.7 | 1 671.3 |
--------------------------------------------------------------------------------
| Other operating income | 0.8 | 0.7 | | 2.9 |
--------------------------------------------------------------------------------
| Depreciation and | -7.3 | -6.8 | | -32.5 |
| impairments | | | | |
--------------------------------------------------------------------------------
| Other operating expenses | -288.2 | -399.2 | | -1 543.8 |
--------------------------------------------------------------------------------
| Operating profit | 11.6 | 36.8 | -68.6 | 97.9 |
--------------------------------------------------------------------------------
| Share of associates' and | 0.1 | 0.0 | | -2.2 |
| joint ventures' result | | | | |
--------------------------------------------------------------------------------
| Financial income and | 0.7 | -1.5 | | -7.1 |
| expenses | | | | |
--------------------------------------------------------------------------------
| Profit before taxes | 12.4 | 35.4 | -64.9 | 88.6 |
--------------------------------------------------------------------------------
| Taxes | -3.7 | -10.1 | | -26.1 |
--------------------------------------------------------------------------------
| NET PROFIT FOR THE PERIOD | 8.8 | 25.3 | -65.4 | 62.5 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net profit for the period | | | | |
| attributable to: | | | | |
--------------------------------------------------------------------------------
| Shareholders of the | 8.9 | 25.4 | | 63.6 |
| parent company | | | | |
--------------------------------------------------------------------------------
| Minority interest | -0.2 | -0.1 | | -1.1 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings per share, basic | 0.15 | 0.43 | -64.7 | 1.08 |
| (EUR) | | | | |
--------------------------------------------------------------------------------
| Earnings per share, | 0.15 | 0.43 | -64.8 | 1.08 |
| diluted (EUR) | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CONSOLIDATED STATEMENT OF | | | | |
| COMPREHENSIVE INCOME | | | | |
--------------------------------------------------------------------------------
| EUR million | 1-3/2010 | 1-3/2009 | Change | 1-12/2009 |
--------------------------------------------------------------------------------
| | | | % | |
--------------------------------------------------------------------------------
| Net profit for the period | 8.8 | 25.3 | -65.4 | 62.5 |
--------------------------------------------------------------------------------
| Other comprehensive | | | | |
| income for the period, | | | | |
| net of tax | | | | |
--------------------------------------------------------------------------------
| Exchange differences on | 11.8 | 5.1 | | -1.1 |
| translating foreign | | | | |
| operations | | | | |
--------------------------------------------------------------------------------
| Cash flow hedges | -4.1 | -0.3 | | 1.9 |
--------------------------------------------------------------------------------
| Income tax relating to | 1.1 | 0.1 | | -0.5 |
| components of other | | | | |
| comprehensive income | | | | |
--------------------------------------------------------------------------------
| Other comprehensive | 8.8 | 4.9 | | 0.3 |
| income for the period, | | | | |
| net of tax | | | | |
--------------------------------------------------------------------------------
| TOTAL COMPREHENSIVE | 17.6 | 30.2 | -41.9 | 62.8 |
| INCOME FOR THE PERIOD | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total comprehensive income | | | |
| attributable to: | | | |
--------------------------------------------------------------------------------
| Shareholders of the | 17.4 | 30.4 | | 64.0 |
| parent company | | | | |
--------------------------------------------------------------------------------
| Minority interest | 0.1 | -0.2 | | -1.2 |
--------------------------------------------------------------------------------
Consolidated balance sheet
--------------------------------------------------------------------------------
| EUR million | | | |
--------------------------------------------------------------------------------
| ASSETS | 31.3.2010 | 31.3.2009 | 31.12.2009 |
--------------------------------------------------------------------------------
| Non-current assets | | | |
--------------------------------------------------------------------------------
| Goodwill | 72.8 | 58.4 | 71.5 |
--------------------------------------------------------------------------------
| Intangible assets | 66.5 | 61.3 | 65.8 |
--------------------------------------------------------------------------------
| Property, plant and equipment | 96.1 | 72.7 | 91.3 |
--------------------------------------------------------------------------------
| Advance payments and | 12.6 | 4.3 | 11.8 |
| construction in progress | | | |
--------------------------------------------------------------------------------
| Investments accounted for | 31.7 | 7.7 | 4.5 |
| using the equity method | | | |
--------------------------------------------------------------------------------
| Available-for-sale | 1.8 | 1.9 | 1.8 |
| investments | | | |
--------------------------------------------------------------------------------
| Long-term loans receivable | 2.7 | 2.2 | 2.7 |
--------------------------------------------------------------------------------
| Deferred tax assets | 40.8 | 32.6 | 37.3 |
--------------------------------------------------------------------------------
| Total non-current assets | 324.9 | 241.2 | 286.7 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Current assets | | | |
--------------------------------------------------------------------------------
| Inventories | | | |
--------------------------------------------------------------------------------
| Raw material and semi- | 119.9 | 171.4 | 125.0 |
| manufactured goods | | | |
--------------------------------------------------------------------------------
| Work in progress | 141.1 | 171.3 | 114.3 |
--------------------------------------------------------------------------------
| Advance payments | 10.1 | 13.9 | 8.9 |
--------------------------------------------------------------------------------
| Total inventories | 271.1 | 356.7 | 248.2 |
--------------------------------------------------------------------------------
| Accounts receivable | 254.4 | 341.6 | 265.4 |
--------------------------------------------------------------------------------
| Loans receivable | 2.6 | 4.1 | 2.9 |
--------------------------------------------------------------------------------
| Other receivables | 24.3 | 28.2 | 23.5 |
--------------------------------------------------------------------------------
| Deferred assets | 114.2 | 94.5 | 96.1 |
--------------------------------------------------------------------------------
| Cash and cash equivalents | 121.1 | 116.0 | 137.5 |
--------------------------------------------------------------------------------
| Total current assets | 787.8 | 941.0 | 773.7 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| TOTAL ASSETS | 1 112.7 | 1 182.2 | 1 060.4 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EUR million | | | |
--------------------------------------------------------------------------------
| EQUITY AND LIABILITIES | 31.3.2010 | 31.3.2009 | 31.12.2009 |
--------------------------------------------------------------------------------
| Equity attributable to equity | | | |
| holders of the parent company | | | |
--------------------------------------------------------------------------------
| Share capital | 30.1 | 30.1 | 30.1 |
--------------------------------------------------------------------------------
| Share premium account | 39.3 | 39.3 | 39.3 |
--------------------------------------------------------------------------------
| Share issue | 0.3 | 0.5 | 0.0 |
--------------------------------------------------------------------------------
| Fair value reserves | -0.7 | 0.7 | 2.3 |
--------------------------------------------------------------------------------
| Translation difference | -6.9 | -12.2 | -18.4 |
--------------------------------------------------------------------------------
| Paid in capital | 9.9 | 8.1 | 9.0 |
--------------------------------------------------------------------------------
| Retained earnings | 288.2 | 286.1 | 276.6 |
--------------------------------------------------------------------------------
| Net profit for the period | 8.9 | 25.4 | 63.6 |
--------------------------------------------------------------------------------
| Total equity attributable to | 369.0 | 377.9 | 402.5 |
| equity holders of the parent | | | |
| company | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Minority interest | 4.7 | 1.7 | 4.6 |
--------------------------------------------------------------------------------
| Total equity | 373.7 | 379.7 | 407.1 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Liabilities | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Non-current liabilities | | | |
--------------------------------------------------------------------------------
| Interest-bearing liabilities | 38.3 | 106.6 | 38.6 |
--------------------------------------------------------------------------------
| Other long-term liabilities | 56.5 | 55.9 | 56.1 |
--------------------------------------------------------------------------------
| Deferred tax liabilities | 17.0 | 17.9 | 18.6 |
--------------------------------------------------------------------------------
| Total non-current liabilities | 111.8 | 180.4 | 113.3 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Provisions | 58.6 | 46.9 | 61.1 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Current liabilities | | | |
--------------------------------------------------------------------------------
| Interest-bearing liabilities | 41.9 | 53.5 | 26.9 |
--------------------------------------------------------------------------------
| Advance payments received | 183.4 | 197.1 | 156.7 |
--------------------------------------------------------------------------------
| Progress billings | 14.4 | 3.6 | 18.9 |
--------------------------------------------------------------------------------
| Accounts payable | 80.5 | 104.4 | 83.7 |
--------------------------------------------------------------------------------
| Other short-term liabilities | 15.3 | 24.1 | 13.8 |
| (non-interest bearing) | | | |
--------------------------------------------------------------------------------
| Accruals | 233.2 | 192.6 | 178.7 |
--------------------------------------------------------------------------------
| Total current liabilities | 568.6 | 575.3 | 478.9 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total liabilities | 739.0 | 802.6 | 653.3 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| TOTAL EQUITY AND LIABILITIES | 1 112.7 | 1 182.2 | 1 060.4 |
--------------------------------------------------------------------------------
Consolidated statement of changes in equity
--------------------------------------------------------------------------------
| | Equity attributable to equity holders of the parent |
| | company |
--------------------------------------------------------------------------------
| EUR million | Share | Share | Share | Cash flow | Trans-latio |
| | capital | premium | issue | hedge | n |
| | | account | | | difference |
--------------------------------------------------------------------------------
| Balance at | 30.1 | 39.3 | 0.0 | 2.3 | -18.4 |
| 1 January, 2010 | | | | | |
--------------------------------------------------------------------------------
| Option exercised | | | | | |
--------------------------------------------------------------------------------
| Share issue | | | 0.3 | | |
--------------------------------------------------------------------------------
| Dividends paid to | | | | | |
| equity holders | | | | | |
--------------------------------------------------------------------------------
| Share based | | | | | |
| payments | | | | | |
| recognized against | | | | | |
| equity | | | | | |
--------------------------------------------------------------------------------
| Total | | | | -3.0 | 11.5 |
| comprehensive | | | | | |
| income | | | | | |
--------------------------------------------------------------------------------
| Balance at | 30.1 | 39.3 | 0.3 | -0.7 | -6.9 |
| 31 March, 2010 | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Balance at | 30.1 | 39.3 | 0.1 | 0.9 | -17.4 |
| 1 January, 2009 | | | | | |
--------------------------------------------------------------------------------
| Option exercised | | | | | |
--------------------------------------------------------------------------------
| Share issue | | | 0.3 | | |
--------------------------------------------------------------------------------
| Dividends paid to | | | | | |
| equity holders | | | | | |
--------------------------------------------------------------------------------
| Share based | | | | | |
| payments | | | | | |
| recognized against | | | | | |
| equity | | | | | |
--------------------------------------------------------------------------------
| Total | | | | -0.2 | 5.2 |
| comprehensive | | | | | |
| income | | | | | |
--------------------------------------------------------------------------------
| Balance at | 30.1 | 39.3 | 0.5 | 0.7 | -12.2 |
| 31 March, 2009 | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | Equity attributable to equity | | |
| | holders of the parent company | | |
--------------------------------------------------------------------------------
| EUR million | Paid in | Retained | Total | Mino-rity | Total |
| | capital | earnings | | interest | equity |
--------------------------------------------------------------------------------
| Balance at | 9.0 | 340.2 | 402.5 | 4.6 | 407.1 |
| 1 January, 2010 | | | | | |
--------------------------------------------------------------------------------
| Option exercised | 0.8 | | 0.8 | | 0.8 |
--------------------------------------------------------------------------------
| Share issue | | | 0.3 | | 0.3 |
--------------------------------------------------------------------------------
| Dividends paid to | | -53.0 | -53.0 | | -53.0 |
| equity holders | | | | | |
--------------------------------------------------------------------------------
| Share based | | 0.9 | 0.9 | | 0.9 |
| payments | | | | | |
| recognized against | | | | | |
| equity | | | | | |
--------------------------------------------------------------------------------
| Total | | 8.9 | 17.4 | 0.1 | 17.6 |
| comprehensive | | | | | |
| income | | | | | |
--------------------------------------------------------------------------------
| Balance at | 9.9 | 297.1 | 369.0 | 4.7 | 373.7 |
| 31 March, 2010 | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Balance at | 7.3 | 338.5 | 398.8 | 1.9 | 400.7 |
| 1 January, 2009 | | | | | |
--------------------------------------------------------------------------------
| Option exercised | 0.8 | | 0.8 | | 0.8 |
--------------------------------------------------------------------------------
| Share issue | | | 0.3 | | 0.3 |
--------------------------------------------------------------------------------
| Dividends paid to | | -53.3 | -53.3 | | -53.3 |
| equity holders | | | | | |
--------------------------------------------------------------------------------
| Share based | | 0.9 | 0.9 | | 0.9 |
| payments | | | | | |
| recognized against | | | | | |
| equity | | | | | |
--------------------------------------------------------------------------------
| Total | | 25.4 | 30.4 | -0.2 | 30.2 |
| comprehensive | | | | | |
| income | | | | | |
--------------------------------------------------------------------------------
| Balance at | 8.1 | 311.5 | 377.9 | 1.7 | 379.7 |
| 31 March, 2009 | | | | | |
--------------------------------------------------------------------------------
Consolidated cash flow statement
--------------------------------------------------------------------------------
| EUR million | 1-3/2010 | 1-3/2009 | 1-12/2009 |
--------------------------------------------------------------------------------
| Cash flow from operating | | | |
| activities | | | |
--------------------------------------------------------------------------------
| Net income | 8.8 | 25.3 | 62.5 |
--------------------------------------------------------------------------------
| Adjustments to net income | | | |
--------------------------------------------------------------------------------
| Taxes | 3.7 | 10.1 | 26.1 |
--------------------------------------------------------------------------------
| Financial income and | -0.7 | 1.5 | 7.5 |
| expenses | | | |
--------------------------------------------------------------------------------
| Share of associates' and | -0.1 | 0.0 | 2.2 |
| joint ventures' result | | | |
--------------------------------------------------------------------------------
| Dividend income | 0.0 | 0.0 | -0.4 |
--------------------------------------------------------------------------------
| Depreciation and | 7.3 | 6.8 | 32.5 |
| impairments | | | |
--------------------------------------------------------------------------------
| Profits and losses on sale | 0.0 | 0.0 | 0.6 |
| of fixed assets | | | |
--------------------------------------------------------------------------------
| Other adjustments | 0.5 | 0.3 | 1.8 |
--------------------------------------------------------------------------------
| Operating income before | 19.3 | 43.9 | 132.9 |
| change in net working capital | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Change in interest-free | 17.8 | 78.4 | 171.8 |
| short-term receivables | | | |
--------------------------------------------------------------------------------
| Change in inventories | -13.4 | -17.9 | 94.9 |
--------------------------------------------------------------------------------
| Change in interest-free | 6.4 | -51.0 | -111.9 |
| short-term liabilities | | | |
--------------------------------------------------------------------------------
| Change in net working capital | 10.8 | 9.5 | 154.8 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow from operations | 30.1 | 53.4 | 287.7 |
| before financing items and | | | |
| taxes | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Interest received | 0.6 | 0.3 | 1.2 |
--------------------------------------------------------------------------------
| Interest paid | -1.1 | -2.0 | -4.6 |
--------------------------------------------------------------------------------
| Other financial income and | -2.4 | 0.8 | -1.6 |
| expenses | | | |
--------------------------------------------------------------------------------
| Income taxes paid | -26.6 | -20.0 | -59.6 |
--------------------------------------------------------------------------------
| Financing items and taxes | -29.6 | -20.8 | -64.6 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net cash from operating | 0.5 | 32.6 | 223.0 |
| activities | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow from investing | | | |
| activities | | | |
--------------------------------------------------------------------------------
| Acquisition of Group | -3.9 | -0.4 | -12.3 |
| companies, net of cash | | | |
--------------------------------------------------------------------------------
| Divestment of Group | 0.0 | 0.0 | -0.4 |
| companies, net of cash | | | |
--------------------------------------------------------------------------------
| Acquisition of shares in | -27.0 | 0.0 | 0.0 |
| associated companies | | | |
--------------------------------------------------------------------------------
| Investments in other shares | 0.0 | 0.0 | -0.2 |
--------------------------------------------------------------------------------
| Capital expenditures | -4.7 | -4.8 | -29.7 |
--------------------------------------------------------------------------------
| Proceeds from sale of fixed | 0.7 | 0.2 | 0.9 |
| assets | | | |
--------------------------------------------------------------------------------
| Dividends received | 0.0 | 0.0 | 0.4 |
--------------------------------------------------------------------------------
| Net cash used in investing | -35.0 | -5.0 | -41.2 |
| activities | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow before financing | -34.5 | 27.6 | 181.8 |
| activities | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow from financing | | | |
| activities | | | |
--------------------------------------------------------------------------------
| Proceeds from options | 0.9 | 0.7 | 1.7 |
| exercised and share issues | | | |
--------------------------------------------------------------------------------
| Related Party net investment | 0.0 | 0.0 | -7.1 |
| to Konecranes Plc shares | | | |
--------------------------------------------------------------------------------
| Proceeds from long-term | 0.0 | 81.4 | 132.6 |
| borrowings | | | |
--------------------------------------------------------------------------------
| Repayments of long-term | -1.5 | -80.0 | -207.2 |
| borrowings | | | |
--------------------------------------------------------------------------------
| Proceeds from (+), payments | 11.0 | 41.5 | -8.4 |
| of (-) short-term borrowings | | | |
--------------------------------------------------------------------------------
| Change in long-term | 0.2 | -0.3 | -0.9 |
| receivables | | | |
--------------------------------------------------------------------------------
| Change in short-term | 0.3 | -3.7 | -2.6 |
| receivables | | | |
--------------------------------------------------------------------------------
| Dividends paid to equity | 0.0 | -53.3 | -53.3 |
| holders of the parent | | | |
--------------------------------------------------------------------------------
| Net cash used in financing | 10.9 | -13.8 | -145.2 |
| activities | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Translation differences in | 7.1 | 1.3 | 0.0 |
| cash | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Change of cash and cash | -16.5 | 15.1 | 36.6 |
| equivalents | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash and cash equivalents at | 137.5 | 100.9 | 100.9 |
| beginning of period | | | |
--------------------------------------------------------------------------------
| Cash and cash equivalents at | 121.1 | 116.0 | 137.5 |
| end of period | | | |
--------------------------------------------------------------------------------
| Change of cash and cash | -16.5 | 15.1 | 36.6 |
| 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 reporting period.
Segment information
1. BUSINESS SEGMENTS
--------------------------------------------------------------------------------
| EUR million | | | | | | |
--------------------------------------------------------------------------------
| Orders received by | 1-3/ | % of | 1-3/ | % of | 1-12/ | % of |
| Business Area | 2010 | total | 2009 | total | 2009 | total |
--------------------------------------------------------------------------------
| Service 1) | 139.8 | 42 | 125.6 | 32 | 498.4 | 35 |
--------------------------------------------------------------------------------
| Equipment | 196.2 | 58 | 263.9 | 68 | 934.6 | 65 |
--------------------------------------------------------------------------------
| ./. Internal | -15.4 | | -19.8 | | -84.1 | |
--------------------------------------------------------------------------------
| Total | 320.6 | 100 | 369.7 | 100 | 1 348.9 | 100 |
--------------------------------------------------------------------------------
| 1) Excl. Service | | | | | | |
| Contract Base | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | 31.3. | % of | 31.3. | % of | 31.12. | % of |
| | 2010 | total | 2009 | total | 2009 | total |
--------------------------------------------------------------------------------
| Order book total | | | | | | |
| 2) | | | | | | |
--------------------------------------------------------------------------------
| Service | 87.7 | 14 | 109.1 | 13 | 75.9 | 12 |
--------------------------------------------------------------------------------
| Equipment | 558.2 | 86 | 701.9 | 87 | 547.8 | 88 |
--------------------------------------------------------------------------------
| ./. Internal | -4.6 | | -19.0 | | -16.8 | |
--------------------------------------------------------------------------------
| Total | 641.3 | 100 | 792.0 | 100 | 607.0 | 100 |
--------------------------------------------------------------------------------
| 2) Percentage of | | | | | | |
| completion | | | | | | |
| deducted | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Sales by Business | 1-3/ | % of | 1-3/ | % of | 1-12/ | % of |
| Area | 2010 | total | 2009 | total | 2009 | total |
--------------------------------------------------------------------------------
| Service | 148.0 | 44 | 169.7 | 36 | 667.2 | 37 |
--------------------------------------------------------------------------------
| Equipment | 185.8 | 56 | 304.6 | 64 | 1 115.1 | 63 |
--------------------------------------------------------------------------------
| ./. Internal | -27.6 | | -32.2 | | -111.1 | |
--------------------------------------------------------------------------------
| Total | 306.3 | 100 | 442.1 | 100 | 1 671.3 | 100 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating profit | 1-3/ | EBIT | 1-3/ | EBIT | 1-12/ | EBIT |
| (EBIT) by Business | 2010 | % | 2009 | % | 2009 | % |
| Area excluding | MEUR | | MEUR | | MEUR | |
| restructuring | | | | | | |
| costs | | | | | | |
--------------------------------------------------------------------------------
| Service | 9.8 | 6.6 | 15.7 | 9.3 | 61.0 | 9.1 |
--------------------------------------------------------------------------------
| Equipment | 6.0 | 3.3 | 26.8 | 8.8 | 76.7 | 6.9 |
--------------------------------------------------------------------------------
| Group costs and | -4.3 | | -5.7 | | -18.9 | |
| eliminations | | | | | | |
--------------------------------------------------------------------------------
| Total | 11.6 | 3.8 | 36.8 | 8.3 | 118.8 | 7.1 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating profit | 1-3/ | EBIT | 1-3/ | EBIT | 1-12/ | EBIT % |
| (EBIT) by Business | 2010 | % | 2009 | % | 2009 | |
| Area including | MEUR | | MEUR | | MEUR | |
| restructuring | | | | | | |
| costs | | | | | | |
--------------------------------------------------------------------------------
| Service | 9.8 | 6.6 | 15.7 | 9.3 | 58.3 | 8.7 |
--------------------------------------------------------------------------------
| Equipment | 6.1 | 3.3 | 26.8 | 8.8 | 58.5 | 5.2 |
--------------------------------------------------------------------------------
| Group costs and | -4.3 | | -5.7 | | -18.9 | |
| eliminations | | | | | | |
--------------------------------------------------------------------------------
| Total | 11.6 | 3.8 | 36.8 | 8.3 | 97.9 | 5.9 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Capital Employed | 1-3/ | | 1-3/ | | 1-12/ | |
| and ROCE% | 2010 | | 2009 | | 2009 | |
--------------------------------------------------------------------------------
| | MEUR | | MEUR | | MEUR | ROCE % |
--------------------------------------------------------------------------------
| Service | 133.1 | | 151.2 | | 130.7 | 43.8 |
--------------------------------------------------------------------------------
| Equipment | 194.7 | | 289.5 | | 208.7 | 22.9 |
--------------------------------------------------------------------------------
| Unallocated | 126.1 | | 99.1 | | 133.2 | |
| Capital Employed | | | | | | |
--------------------------------------------------------------------------------
| Total | 453.9 | | 539.7 | | 472.6 | 19.3 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Personnel by | 31.3. | % of | 31.3. | % of | 31.12. | % of |
| Business Area (at | 2010 | total | 2009 | total | 2009 | total |
| the end of the | | | | | | |
| period) | | | | | | |
--------------------------------------------------------------------------------
| Service | 4 926 | 52 | 5 494 | 56 | 4 991 | 51 |
--------------------------------------------------------------------------------
| Equipment | 4 586 | 48 | 4 317 | 44 | 4 742 | 48 |
--------------------------------------------------------------------------------
| Group staff | 50 | 1 | 55 | 1 | 49 | 1 |
--------------------------------------------------------------------------------
| Total | 9 562 | 100 | 9 866 | 100 | 9 782 | 100 |
--------------------------------------------------------------------------------
2. GEOGRAPHICAL SEGMENTS
--------------------------------------------------------------------------------
| EUR million | | | | | | |
--------------------------------------------------------------------------------
| Sales by market | 1-3/ | % of | 1-3/ | % of | 1-12/ | % of |
| | 2010 | total | 2009 | total | 2009 | total |
--------------------------------------------------------------------------------
| Europe-Middle | 173.0 | 56 | 246.4 | 56 | 928.0 | 56 |
| East-Africa (EMEA) | | | | | | |
--------------------------------------------------------------------------------
| Americas (AME) | 86.6 | 28 | 132.7 | 30 | 479.5 | 29 |
--------------------------------------------------------------------------------
| Asia-Pacific (APAC) | 46.7 | 15 | 63.0 | 14 | 263.8 | 16 |
--------------------------------------------------------------------------------
| Total | 306.3 | 100 | 442.1 | 100 | 1 671.3 | 100 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Personnel by region | 31.3. | % of | 31.3. | % of | 31.12. | % of |
| (at the end of the | 2010 | total | 2009 | total | 2009 | total |
| period) | | | | | | |
--------------------------------------------------------------------------------
| Europe-Middle | 5 466 | 57 | 5 626 | 57 | 5 533 | 57 |
| East-Africa (EMEA) | | | | | | |
--------------------------------------------------------------------------------
| Americas (AME) | 2 171 | 23 | 2 654 | 27 | 2 236 | 23 |
--------------------------------------------------------------------------------
| Asia-Pacific (APAC) | 1 925 | 20 | 1 586 | 16 | 2 013 | 21 |
--------------------------------------------------------------------------------
| Total | 9 562 | 100 | 9 866 | 100 | 9 782 | 100 |
--------------------------------------------------------------------------------
Notes
--------------------------------------------------------------------------------
| KEY FIGURES | 31.3.2010 | 31.3.2009 | Change % | 31.12.2009 |
--------------------------------------------------------------------------------
| Earnings per share, | 0.15 | 0.43 | -64.7 | 1.08 |
| basic (EUR) | | | | |
--------------------------------------------------------------------------------
| Earnings per share, | 0.15 | 0.43 | -64.8 | 1.08 |
| diluted (EUR) | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Return on capital | 14.6 | 50.4 | -71.0 | 19.3 |
| employed %, Rolling 12 | | | | |
| Months (R12M) | | | | |
--------------------------------------------------------------------------------
| Return on equity %, | 12.2 | 49.4 | -75.3 | 15.5 |
| Rolling 12 Months | | | | |
| (R12M) | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Equity per share (EUR) | 6.26 | 6.38 | -1.9 | 6.84 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Current ratio | 1.3 | 1.5 | -13.3 | 1.4 |
--------------------------------------------------------------------------------
| Gearing % | -12.4 | 10.0 | -224.0 | -19.1 |
--------------------------------------------------------------------------------
| Solidity % | 40.2 | 38.5 | 4.4 | 45.1 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EBITDA, EUR million | 18.8 | 43.6 | -56.7 | 130.4 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Investments total | 4.2 | 6.0 | -29.5 | 25.7 |
| (excl. acquisitions), | | | | |
| EUR million | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Interest-bearing net | -46.6 | 37.8 | -223.2 | -77.7 |
| debt, EUR million | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net working capital, | 102.5 | 267.0 | -61.6 | 138.8 |
| EUR million | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Average number of | 9 672 | 9 885 | -2.2 | 9 811 |
| personnel during the | | | | |
| period | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Average number of | 58 832 081 | 59 137 550 | -0.5 | 58 922 323 |
| shares outstanding, | | | | |
| basic | | | | |
--------------------------------------------------------------------------------
| Average number of | 59 069 680 | 59 202 419 | -0.2 | 59 085 936 |
| shares outstanding, | | | | |
| diluted | | | | |
--------------------------------------------------------------------------------
| Number of shares | 58 908 624 | 59 196 720 | -0.5 | 58 812 624 |
| outstanding | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| The period end exchange | 31.3.2010 | 31.3.2009 | Change % | 31.12.2009 |
| rates*: | | | | |
--------------------------------------------------------------------------------
| USD - US dollar | 1.335 | 1.330 | -0.4 | 1.441 |
--------------------------------------------------------------------------------
| CAD - Canadian dollar | 1.372 | 1.645 | 19.9 | 1.513 |
--------------------------------------------------------------------------------
| GBP - Pound sterling | 0.900 | 0.929 | 3.1 | 0.888 |
--------------------------------------------------------------------------------
| CNY - Chinese yuan | 9.116 | 9.084 | -0.4 | 9.835 |
--------------------------------------------------------------------------------
| SGD - Singapore dollar | 1.876 | 2.016 | 7.5 | 2.019 |
--------------------------------------------------------------------------------
| SEK - Swedish krona | 9.708 | 10.894 | 12.2 | 10.252 |
--------------------------------------------------------------------------------
| NOK - Norwegian krone | 8.098 | 8.800 | 8.7 | 8.300 |
--------------------------------------------------------------------------------
| AUD - Australian dollar | 1.478 | 1.923 | 30.1 | 1.601 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| The period average | 31.3.2010 | 31.3.2009 | Change | 31.12.2009 |
| exchange rates*: | | | % | |
--------------------------------------------------------------------------------
| USD - US dollar | 1.384 | 1.302 | -5.9 | 1.395 |
--------------------------------------------------------------------------------
| CAD - Canadian dollar | 1.441 | 1.622 | 12.5 | 1.585 |
--------------------------------------------------------------------------------
| GBP - Pound sterling | 0.887 | 0.908 | 2.4 | 0.891 |
--------------------------------------------------------------------------------
| CNY - Chinese yuan | 9.448 | 8.898 | -5.8 | 9.529 |
--------------------------------------------------------------------------------
| SGD - Singapore dollar | 1.941 | 1.970 | 1.5 | 2.024 |
--------------------------------------------------------------------------------
| SEK - Swedish krona | 9.952 | 10.944 | 10.0 | 10.618 |
--------------------------------------------------------------------------------
| NOK - Norwegian krone | 8.104 | 8.941 | 10.3 | 8.726 |
--------------------------------------------------------------------------------
| AUD - Australian dollar | 1.532 | 1.968 | 28.5 | 1.773 |
--------------------------------------------------------------------------------
*Konecranes applies a weekly calendar in its financial reporting. The presented
exchange rates are determined by rates on the last Friday of the period.
CONTINGENT LIABILITIES AND PLEDGED ASSETS
--------------------------------------------------------------------------------
| EUR million | 31.3.2010 | 31.3.2009 | 31.12.2009 |
--------------------------------------------------------------------------------
| For own commercial | | | |
| obligations | | | |
--------------------------------------------------------------------------------
| Pledged assets | 0.0 | 0.4 | 0.0 |
--------------------------------------------------------------------------------
| Guarantees | 346.6 | 208.0 | 212.0 |
--------------------------------------------------------------------------------
| For associated companies | | | |
--------------------------------------------------------------------------------
| Guarantees | 0.0 | 13.5 | 0.0 |
--------------------------------------------------------------------------------
| Leasing liabilities | | | |
--------------------------------------------------------------------------------
| Next year | 27.0 | 30.6 | 27.7 |
--------------------------------------------------------------------------------
| Later on | 70.8 | 67.3 | 71.3 |
--------------------------------------------------------------------------------
| Other | 0.1 | 0.2 | 0.2 |
--------------------------------------------------------------------------------
| Total | 444.5 | 319.8 | 311.1 |
--------------------------------------------------------------------------------
Leasing contracts comply with normal practices in the countries concerned.
Contingent liabilities relating to litigation
Various legal actions, claims and other proceedings are pending against the
Group in various countries. These actions, claims and other proceedings are
typical for this industry and consistent with a global business offering that
encompasses a wide range of products and services. These matters involve
contractual disputes, warranty claims, product liability (including design
defects, manufacturing defects, failure to warn and asbestos legacy),
employment, vehicles and other matters involving claims of general liability.
While the final outcome of these matters cannot be predicted with certainty
Konecranes is of the opinion, based on the information available to date and
considering the grounds presented for such claims, the available insurance
coverage and the reserves made, that the outcome of such actions, claims and
other proceedings, if unfavorable, would not have a material, adverse impact on
the financial condition of the Group.
NOMINAL AND FAIR VALUES OF DERIVATIVE FINANCIAL INSTRUMENTS
--------------------------------------------------------------------------------
| EUR million | 31.3. | 31.3. | 31.3. | 31.3. | 31.12. | 31.12. |
| | 2010 | 2010 | 2009 | 2009 | 2009 | 2009 |
--------------------------------------------------------------------------------
| | Nominal | Fair | Nominal | Fair | Nominal | Fair |
| | value | value | value | value | value | value |
--------------------------------------------------------------------------------
| Foreign | 142.9 | -2.1 | 232.9 | 3.2 | 129.5 | 2.6 |
| exchange | | | | | | |
| forward | | | | | | |
| contracts | | | | | | |
--------------------------------------------------------------------------------
| Electricity | 2.1 | -0.2 | 1.7 | -0.5 | 2.1 | -0.2 |
| derivatives | | | | | | |
--------------------------------------------------------------------------------
| Total | 145.0 | -2.3 | 234.6 | 2.7 | 131.6 | 2.5 |
--------------------------------------------------------------------------------
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 large projects in Business Area
Equipment.
ACQUISITIONS
During January-March, Konecranes made two small acquisitions which related to
machine tool service (MTS) business in Denmark and in the United Kingdom.
The preliminary fair values of the identifiable assets and liabilities of the
acquired businesses at date of acquisitions are summarized below.
--------------------------------------------------------------------------------
| EUR million | 31.3.2010 | 31.3.2010 |
--------------------------------------------------------------------------------
| | Recognized on | Carrying value |
| | acquisition | |
--------------------------------------------------------------------------------
| Intangible assets | 1.1 | 0.0 |
--------------------------------------------------------------------------------
| Tangible assets | 0.0 | 0.0 |
--------------------------------------------------------------------------------
| Inventories | 0.1 | 0.1 |
--------------------------------------------------------------------------------
| Account receivables and other assets | 0.3 | 0.3 |
--------------------------------------------------------------------------------
| Cash and bank | 0.3 | 0.3 |
--------------------------------------------------------------------------------
| Total assets | 1.8 | 0.7 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Deferred tax liabilities | 0.2 | 0.0 |
--------------------------------------------------------------------------------
| Accounts payable | 0.1 | 0.1 |
--------------------------------------------------------------------------------
| Other liabilities | 0.2 | 0.2 |
--------------------------------------------------------------------------------
| Total liabilities | 0.4 | 0.3 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net assets | 1.4 | 0.4 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Acquisition costs | 2.5 | |
--------------------------------------------------------------------------------
| Goodwill | 1.1 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash outflow on acquisition | | |
--------------------------------------------------------------------------------
| Acquisition costs | 2.5 | |
--------------------------------------------------------------------------------
| Liabilities assumed | -1.0 | |
--------------------------------------------------------------------------------
| Acquisition costs paid in cash | 1.5 | |
--------------------------------------------------------------------------------
| Cash and cash equivalents of acquired | -0.3 | |
| companies | | |
--------------------------------------------------------------------------------
| Net cash flow arising on acquisition | 1.2 | |
--------------------------------------------------------------------------------
Acquisition of associated company:
On March 23, 2010 Konecranes purchased 29,750 shares (22.0% of the share capital
and voting rights) in the Japanese hoist, crane and material handling equipment
company Kito Corporation ("Kito"). The purchase price for the shares in Kito was
JPY 111,800 per share. The total value of the stake purchased amounted to
approximately JPY 3.3 billion (EUR 27 million). The purchase was financed with
existing cash reserves.
Furthermore, Kito repurchased 10.0% of the share capital on March 24, 2010. Post
the share purchase by Konecranes and the Kito share buyback, Konecranes has
approximately 24.4% of the voting rights in Kito.
Quarterly figures
CONSOLIDATED STATEMENT OF INCOME, QUARTERLY
--------------------------------------------------------------------------------
| EUR million | Q1/2010 | Q4/2009 | Q3/2009 | Q2/2009 | Q1/2009 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Sales | 306.3 | 428.9 | 368.7 | 431.6 | 442.1 |
--------------------------------------------------------------------------------
| Other operating | 0.8 | 1.1 | 0.4 | 0.8 | 0.7 |
| income | | | | | |
--------------------------------------------------------------------------------
| Depreciation and | -7.3 | -11.8 | -7.4 | -6.5 | -6.8 |
| impairments | | | | | |
--------------------------------------------------------------------------------
| Restructuring | 0.0 | -5.1 | -13.9 | -1.9 | 0.0 |
| costs | | | | | |
--------------------------------------------------------------------------------
| Other operating | -288.2 | -390.9 | -337.7 | -395.1 | -399.2 |
| expenses | | | | | |
--------------------------------------------------------------------------------
| Operating profit | 11.6 | 22.2 | 10.2 | 28.8 | 36.8 |
--------------------------------------------------------------------------------
| Share of | 0.1 | -0.2 | -0.7 | -1.4 | 0.0 |
| associates' and | | | | | |
| joint ventures' | | | | | |
| result | | | | | |
--------------------------------------------------------------------------------
| Financial income | 0.7 | -3.4 | -2.3 | 0.0 | -1.5 |
| and expenses | | | | | |
--------------------------------------------------------------------------------
| Profit before | 12.4 | 18.6 | 7.2 | 27.4 | 35.4 |
| taxes | | | | | |
--------------------------------------------------------------------------------
| Taxes | -3.7 | -5.2 | -3.0 | -7.8 | -10.1 |
--------------------------------------------------------------------------------
| Net profit for | 8.8 | 13.4 | 4.2 | 19.6 | 25.3 |
| the period | | | | | |
--------------------------------------------------------------------------------
CONSOLIDATED BALANCE SHEET, QUARTERLY
--------------------------------------------------------------------------------
| EUR million | Q1/2010 | Q4/2009 | Q3/2009 | Q2/2009 | Q1/2009 |
--------------------------------------------------------------------------------
| ASSETS | | | | | |
--------------------------------------------------------------------------------
| Goodwill | 72.8 | 71.5 | 64.4 | 59.5 | 58.4 |
--------------------------------------------------------------------------------
| Intangible assets | 66.5 | 65.8 | 60.5 | 61.1 | 61.3 |
--------------------------------------------------------------------------------
| Property, plant and | 96.1 | 91.3 | 76.6 | 75.5 | 72.7 |
| equipment | | | | | |
--------------------------------------------------------------------------------
| Other | 89.5 | 58.1 | 54.8 | 56.5 | 48.8 |
--------------------------------------------------------------------------------
| Total non-current | 324.9 | 286.7 | 256.3 | 252.7 | 241.2 |
| assets | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Inventories | 271.1 | 248.2 | 303.0 | 322.6 | 356.7 |
--------------------------------------------------------------------------------
| Receivables and | 395.5 | 387.9 | 400.5 | 441.3 | 468.3 |
| other current | | | | | |
| assets | | | | | |
--------------------------------------------------------------------------------
| Cash and cash | 121.1 | 137.5 | 88.5 | 96.9 | 116.0 |
| equivalents | | | | | |
--------------------------------------------------------------------------------
| Total current | 787.8 | 773.7 | 792.1 | 860.7 | 941.0 |
| assets | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total assets | 1 112.7 | 1 060.4 | 1 048.4 | 1 113.4 | 1 182.2 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EQUITY AND | | | | | |
| LIABILITIES | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total equity | 373.7 | 407.1 | 389.1 | 385.4 | 379.7 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Non-current | 111.8 | 113.3 | 93.5 | 109.3 | 180.4 |
| liabilities | | | | | |
--------------------------------------------------------------------------------
| Provisions | 58.6 | 61.1 | 54.9 | 42.9 | 46.9 |
--------------------------------------------------------------------------------
| Advance payments | 183.4 | 156.7 | 157.3 | 175.2 | 197.1 |
| received | | | | | |
--------------------------------------------------------------------------------
| Other current | 385.3 | 322.2 | 353.6 | 400.6 | 378.2 |
| liabilities | | | | | |
--------------------------------------------------------------------------------
| Total liabilities | 739.0 | 653.3 | 659.3 | 728.0 | 802.6 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total equity and | 1 112.7 | 1 060.4 | 1 048.4 | 1 113.4 | 1 182.2 |
| liabilities | | | | | |
--------------------------------------------------------------------------------
CONSOLIDATED CASH FLOW STATEMENT - QUARTERLY
--------------------------------------------------------------------------------
| EUR million | Q1/2010 | Q4/2009 | Q3/2009 | Q2/2009 | Q1/2009 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating income | 19.3 | 36.4 | 17.2 | 35.4 | 43.9 |
| before change in | | | | | |
| net working | | | | | |
| capital | | | | | |
--------------------------------------------------------------------------------
| Change in net | 10.8 | 64.4 | 57.4 | 23.6 | 9.5 |
| working capital | | | | | |
--------------------------------------------------------------------------------
| Financing items | -29.6 | -10.8 | -8.4 | -24.6 | -20.8 |
| and taxes | | | | | |
--------------------------------------------------------------------------------
| Net cash from | 0.5 | 89.9 | 66.2 | 34.4 | 32.6 |
| operating | | | | | |
| activities | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow from | -35.0 | -18.4 | -9.2 | -8.7 | -5.0 |
| investing | | | | | |
| activities | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow before | -34.5 | 71.5 | 57.0 | 25.7 | 27.6 |
| financing | | | | | |
| activities | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Proceeds from | 0.9 | 0.2 | 0.2 | 0.6 | 0.7 |
| options exercised | | | | | |
| and share issues | | | | | |
--------------------------------------------------------------------------------
| Related Party net | 0.0 | 0.0 | 0.0 | -7.1 | 0.0 |
| investment to | | | | | |
| Konecranes shares | | | | | |
--------------------------------------------------------------------------------
| Change of | 10.0 | -24.1 | -64.2 | -36.9 | 38.8 |
| interest-bearing | | | | | |
| debt | | | | | |
--------------------------------------------------------------------------------
| Dividends paid to | 0.0 | 0.0 | 0.0 | 0.0 | -53.3 |
| equity holders of | | | | | |
| the parent | | | | | |
--------------------------------------------------------------------------------
| Net cash used in | 10.9 | -23.9 | -64.0 | -43.4 | -13.8 |
| financing | | | | | |
| activities | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Translation | 7.1 | 1.5 | -1.4 | -1.4 | 1.3 |
| differences in | | | | | |
| cash | | | | | |
--------------------------------------------------------------------------------
| Change of cash and | -16.5 | 49.1 | -8.4 | -19.1 | 15.1 |
| cash equivalents | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash and cash | 137.5 | 88.5 | 96.9 | 116.0 | 100.9 |
| equivalents at | | | | | |
| beginning of | | | | | |
| period | | | | | |
--------------------------------------------------------------------------------
| Cash and cash | 121.1 | 137.5 | 88.5 | 96.9 | 116.0 |
| equivalents at end | | | | | |
| of period | | | | | |
--------------------------------------------------------------------------------
| Change of cash and | -16.5 | 49.1 | -8.4 | -19.1 | 15.1 |
| cash equivalents | | | | | |
--------------------------------------------------------------------------------
QUARTERLY SEGMENT INFORMATION
--------------------------------------------------------------------------------
| EUR million | | | | | |
--------------------------------------------------------------------------------
| Orders received by | Q1/2010 | Q4/2009 | Q3/2009 | Q2/2009 | Q1/2009 |
| Business Area | | | | | |
--------------------------------------------------------------------------------
| Service 1) | 139.8 | 121.8 | 124.5 | 126.4 | 125.6 |
--------------------------------------------------------------------------------
| Equipment | 196.2 | 262.2 | 205.9 | 202.6 | 263.9 |
--------------------------------------------------------------------------------
| ./. Internal | -15.4 | -22.9 | -22.0 | -19.5 | -19.8 |
--------------------------------------------------------------------------------
| Total | 320.6 | 361.1 | 308.5 | 309.6 | 369.7 |
--------------------------------------------------------------------------------
| 1) Excl. Service | | | | | |
| Contract Base | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Order book by | Q1/2010 | Q4/2009 | Q3/2009 | Q2/2009 | Q1/2009 |
| Business Area | | | | | |
--------------------------------------------------------------------------------
| Service | 87.7 | 75.9 | 88.1 | 93.9 | 109.1 |
--------------------------------------------------------------------------------
| Equipment | 558.2 | 547.8 | 565.6 | 599.0 | 701.9 |
--------------------------------------------------------------------------------
| ./. Internal | -4.6 | -16.8 | -15.3 | -12.2 | -19.0 |
--------------------------------------------------------------------------------
| Total | 641.3 | 607.0 | 638.4 | 680.6 | 792.0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Sales by Business | Q1/2010 | Q4/2009 | Q3/2009 | Q2/2009 | Q1/2009 |
| Area | | | | | |
--------------------------------------------------------------------------------
| Service | 148.0 | 170.5 | 157.6 | 169.5 | 169.7 |
--------------------------------------------------------------------------------
| Equipment | 185.8 | 284.0 | 233.5 | 293.0 | 304.6 |
--------------------------------------------------------------------------------
| ./. Internal | -27.6 | -25.6 | -22.4 | -30.9 | -32.2 |
--------------------------------------------------------------------------------
| Total | 306.3 | 428.9 | 368.7 | 431.6 | 442.1 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating profit | Q1/2010 | Q4/2009 | Q3/2009 | Q2/2009 | Q1/2009 |
| (EBIT) by Business | | | | | |
| Area | | | | | |
--------------------------------------------------------------------------------
| excluding | | | | | |
| restructuring costs | | | | | |
--------------------------------------------------------------------------------
| Service | 9.8 | 15.8 | 13.9 | 15.6 | 15.7 |
--------------------------------------------------------------------------------
| Equipment | 6.0 | 15.4 | 14.0 | 20.5 | 26.8 |
--------------------------------------------------------------------------------
| Group costs and | -4.3 | -3.9 | -3.9 | -5.4 | -5.7 |
| eliminations | | | | | |
--------------------------------------------------------------------------------
| Total | 11.6 | 27.3 | 24.0 | 30.7 | 36.8 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating margin, | Q1/2010 | Q4/2009 | Q3/2009 | Q2/2009 | Q1/2009 |
| (EBIT %) by | | | | | |
| Business Area | | | | | |
--------------------------------------------------------------------------------
| excluding | | | | | |
| restructuring costs | | | | | |
--------------------------------------------------------------------------------
| Service | 6.6 % | 9.3 % | 8.8 % | 9.2 % | 9.3 % |
--------------------------------------------------------------------------------
| Equipment | 3.3 % | 5.4 % | 6.0 % | 7.0 % | 8.8 % |
--------------------------------------------------------------------------------
| Group EBIT % total | 3.8 % | 6.4 % | 6.5 % | 7.1 % | 8.3 % |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Sales by market | Q1/2010 | Q4/2009 | Q3/2009 | Q2/2009 | Q1/2009 |
--------------------------------------------------------------------------------
| Europe-Middle | 173.0 | 244.2 | 201.0 | 236.3 | 246.4 |
| East-Africa (EMEA) | | | | | |
--------------------------------------------------------------------------------
| Americas (AME) | 86.6 | 113.7 | 111.9 | 121.2 | 132.7 |
--------------------------------------------------------------------------------
| Asia-Pacific (APAC) | 46.7 | 71.1 | 55.7 | 74.0 | 63.0 |
--------------------------------------------------------------------------------
| Total | 306.3 | 428.9 | 368.7 | 431.6 | 442.1 |
--------------------------------------------------------------------------------
Analyst and press briefing
An analyst and press conference will be held at G.W. Sundmans' Auditorium
(address Eteläranta 16) at 12.00 p.m. Finnish time. The Interim Report will be
presented by Konecranes' President and CEO Pekka Lundmark and CFO Teo Ottola.
A live webcast of the conference with the possibility to ask questions through
web will begin at 12.00 p.m. at www.konecranes.com. An on-demand version of the
webcast will be available on the company's website later the same day.
Next report
Konecranes January-June 2010 interim report will be published on July 22, 2010.
KONECRANES PLC
Miikka Kinnunen
Director, Investor Relations
For further information, please contact:
Mr Pekka Lundmark, President and CEO, tel. +358 20 427 2000
Mr Teo Ottola, Chief Financial Officer, tel. +358 20 427 2040
Mr Miikka Kinnunen, Director, Investor Relations, tel. +358 20 427 2050
Mr Mikael Wegmüller,
Vice President, Marketing and Communications, tel. +358 20 427 2008
Konecranes is a world-leading group of Lifting Businesses™, serving a broad
range of customers, including manufacturing and process industries, shipyards,
ports and terminals. Konecranes provides productivity-enhancing lifting
solutions as well as services for lifting equipment and machine tools of all
makes. In 2009, Group sales totaled EUR 1,671 million. The Group has 9,600
employees, at more than 545 locations in 43 countries. Konecranes is listed on
the NASDAQ OMX Helsinki (symbol: KCR1V).
Distribution
Media
NASDAQ OMX Helsinki
www.konecranes.com
SIGNS OF RECOVERY IN SERVICE, EQUIPMENT DEMAND LOW, FIRST QUARTER PROFIT DOWN ON LOW VOLUME
| Source: Konecranes Oyj
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