Q1 2012 INTERIM REPORT April 25, 2012 Pekka Lundmark, President and CEO Teo Ottola, CFO 1
HIGHLIGHTS OF Q1/12 Positives Strong order intake both in Service and Equipment All-time high order book EBIT margin improved Y/Y in Service Sales funnel remains reasonably strong despite the economic uncertainties Negatives Demand remained weak in China, but was stable sequentially Operating leverage remained modest in Equipment Net working capital remained high 2
CAPACITY UTILIZATION: EU27 AND USA SOURCES: Eurostat (latest data point Q1/12), Federal Reserve Bank of St. Louis (March 2012) 3
CONTAINER TRAFFIC Annual container handling volume Monthly container handling volume SOURCE: Drewry Container Port Insight (latest data point January 2012) 4
MARKET OUTLOOK AND FINANCIAL GUIDANCE AS OF APRIL 25, 2012 Market outlook Forecasting the demand continues to be challenging due to macroeconomic uncertainties. Based on the current offer base, the demand outlook is stable. However, due to the timing of large port crane projects, the quarterly Equipment order intake may fluctuate. Financial guidance Based on the order book, we forecast year 2012 sales and operating profit to be higher than in 2011. 5
20 AUTOMATED STACKING CRANES TO GLOBAL TERMINAL IN USA Order of 20 ASCs to Global s container terminal in New Jersey Delivery in 2013 Related to the terminal s investment to handle larger container ships that will start coming through the widened Panama Canal in 2014 Earlier delivery of 30 ASCs for Virginia, USA Current ASC deliveries 36 ASCs for Barcelona, Spain 30 ASCs for Abu Dhabi, UAE 12 ASCs for Sydney and Brisbane, Australia 6
GLOBAL STRUCTURAL CHANGE IS CONTINUING Asia s share of global industrial production continues to grow 45 % 40 % 35 % 30 % North America Europe Asia 25 % 20 % 15 % 10 % 5 % 0 % 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 Source: Maddison (Historical Statistics), IMF, ETLA 2012 Konecranes. All rights reserved. 7
GROUP ORDERS AND NET SALES Q1 Orders: 534.6 (510.9) MEUR, +4.6% Net sales: 474.0 (387.8) MEUR, +22.2% MEUR 700 ORDERS SALES 600 500 400 300 200 100 0 8
GROUP ORDER BOOK Q1 Order book: 1,075.6 (956.6) MEUR, +12.4% MEUR 1200 1000 800 600 400 200 0 9
GROUP EBIT & MARGIN Q1 EBIT: 24.0 (18.5) MEUR, +29.4% MARGIN: 5.1% (4.8%) MEUR 90 80 70 60 50 40 30 20 10 0 EBIT MARGIN 14 % 12 % 10 % 8 % 6 % 4 % 2 % 0 % 10
SALES SPLIT BY BUSINESS AREA & REGION (R12M) 21% (21) 60% (60) R12M 1,983 MEUR (FY 2011 1,896) 40% (40) R12M 1,983 MEUR 29% (FY 2011 50% (29) 1,896) (50) SERVICE EQUIPMENT EMEA AME APAC 11
12 SERVICE
SERVICE ORDERS AND NET SALES Q1 Orders: 187.6 (167.2) MEUR +12.2% Sales: 205.8 (170.9) MEUR +20.4% MEUR 250 ORDERS SALES 200 150 100 50 0 New orders grew Y/Y in all geographic regions and in major business units Orders received were similar to the fourth quarter across regions and business units 13
SERVICE EBIT & MARGIN Q1 EBIT: 12.6 (9.1) MEUR, +38.6% MARGIN: 6.1% (5.3%) MEUR EBIT MARGIN 25 20 15 10 5 0 12 % 10 % 8 % 6 % 4 % 2 % 0 % Operating profit improved Y/Y due to the higher volume 14
SERVICE CONTRACT BASE Q1 CB: 416 (381) thousand units, +9.0% Annual value 174 (146) MEUR, +19.0% Y/Y UNITS 450 000 400 000 350 000 300 000 250 000 200 000 150 000 100 000 50 000 0 NUMBER OF EQUIPMENT VALUE MEUR 200 180 160 140 120 100 80 60 40 20 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 Q1/12 15
SERVICE ORDER BOOK Q1 Order book: 146.7 (125.8) MEUR, +16.7% MEUR 160 140 120 100 80 60 40 20 0 16
EQUIPMENT 17
EQUIPMENT ORDERS AND NET SALES Q1 Orders: 372.1 (363.8) MEUR, +2.3% Net sales: 293.4 (240.5) MEUR, +22.0% MEUR 450 400 350 300 250 200 150 100 50 0 ORDERS SALES Orders grew Y/Y in the Americas and EMEA, but fell in APAC; all BUs except Port Cranes up Orders grew Q/Q in the Americas and EMEA, while stable in APAC; growth in IC and Components 18
EQUIPMENT EBIT & MARGIN Q1 EBIT: 15.7 (14.0) MEUR, +12.1% MARGIN: 5.4% (5.8%) MEUR 35 30 25 20 15 10 5 0 EBIT MARGIN 10 % 9 % 8 % 7 % 6 % 5 % 4 % 3 % 2 % 1 % 0 % Operating leverage was still weak 19
EQUIPMENT ORDER BOOK Q1 Order book: 928.9 (830.8) MEUR, +11.8% MEUR 1000 900 800 700 600 500 400 300 200 100 0 20
BALANCE SHEET AND CASH FLOW 21
NET WORKING CAPITAL Q1 NWC: 333.7* (184.0**) MEUR 16.8%* (11.3%**) of R12M sales MEUR 400 350 300 250 200 150 100 50 0 NWC, MEUR % OF R12M SALES 18 % 16 % 14 % 12 % 10 % 8 % 6 % 4 % 2 % 0 % * Q1/12 excl. dividend liability of EUR 57 million **Q1/11 excl. dividend liability of EUR 60 million Q1/10 excl. dividend liability of EUR 53 million 22
CASH FLOW BEFORE FINANCING ACTIVITIES MEUR 250 200 150 179.1 181.8 100 50 0-50 70.2 16.6 6.9 2.3 2003 2004 2005 2006 2007 2008 2009 2010 2011 Q1/11 Q1/12-30.4-7.5-39.0-0.8-100 -150-200 -146.5 Capex on acquisitions Q1/12: EUR1.5m Q1/11: EUR30.3m FY 11 : EUR73.6m 23
GEARING Q1 Equity: 391.9 (413.2) MEUR Net debt: 222.4 (7.0) MEUR Gearing: 56.8% (1.7%) MEUR 500 450 400 350 300 250 200 150 100 50 0-50 -100-150 EQUITY NET DEBT GEARING 60 % 50 % 40 % 30 % 20 % 10 % 0 % -10 % -20 % 24
RETURN ON CAPITAL EMPLOYED ROCE % 60 56.3 50 46.2* 40 30 29.5 24.2 20 10 10.8 13.7 17.2 19.3 17.1 19.0 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 R12M *) The 2007 ROCE including capital gain was 50.4% 25
APPENDIXES 26
STATEMENT OF INCOME MEUR Q1 2012 Q1 2011 % Change Sales 474.0 387.8 22.2 Other operating income 0.7 0.5 Depreciation and impairments -9.7-8.6 Other operating expenses -441.0-361.2 Operating profit 24.0 18.5 29.4 Share of associates and joint ventures result 0.6 0.6 Financial income and expenses -4.1-7.3 Profit before taxes 20.5 11.8 73.5 Taxes -6.1-3.5 Net profit for the period 14.4 8.3 73.6 27
BALANCE SHEET MEUR March 31, 2012 March 31, 2011 MEUR March 31, 2012 March 31, 2011 Non-current assets 451.4 397.5 Equity 391.9 413.2 Inventories 388.3 291.0 Non-current liabilities 215.2 121.0 Other current assets 545.1 449.7 Provisions 50.8 46.8 Cash and cash equivalents 107.8 98.2 Current liabilities 834.6 655.5 Total assets 1 492.6 1 236.4 Total equity and liabilities 1 492.6 1 236.4 28
CASH FLOW STATEMENT MEUR Q1 2012 Q1 2011 Operating income before change in net working capital 34.5 27.4 Change in net working capital -8.4-14.7 Financing items and taxes -14.0-14.8 Net cash from operating activities 12.0-2.1 Cash flow from investing activities -12.8-36.9 Cash flow before financing activities -0.8-39.0 Proceeds from options exercised and share issues 0.0 20.6 Change in interest-bearing debt 36.6 21.9 Net cash used in financing activities 36.6 42.5 Translation differences in cash -0.6-3.7 Change of cash and cash equivalents 35.2-0.2 Cash and cash equivalents at beginning of period 72.7 98.5 Cash and cash equivalents at end of period 107.8 98.2 Change of cash and cash equivalents 35.2-0.2 29
KEY FIGURES MEUR Q1 2012 Q1 2011 % Change Earnings per share, basic, EUR 0.25 0.14 71.4 Earnings per share, diluted, EUR 0.25 0.14 72.9 Return on capital employed %, R12M 19.0 25.3 Return on equity %, R12M 17.6 19.8 Equity per share, EUR 6.75 6.79-0.6 Current ratio 1.2 1.2 0.0 Gearing (%) 56.8 1.7 Solidity (%) 30.3 38.1 EBITDA, MEUR 33.7 27.1 24.4 Investments total (excl. acquisitions), MEUR 8.4 4.4 90.3 Interest-bearing net debt, MEUR 222.4 7.0 Net working capital, MEUR 276.5 124.0 122.9 Personnel at end of period 11,756 10,698 9.9 Personnel on average during the period 11,704 10,370 12.9 Average number of shares outstanding, basic 57,198,971 59,231,204-3.4 Average number of shares outstanding, diluted 57,525,053 60,091,166-4.3 Number of shares outstanding 57,198,971 60,035,771-4.7 30
THE LARGEST SHAREHOLDERS Largest shareholders on March 31, 2012 Number of shares % of all shares 1 HTT KCR Holding Oy Ab 6,870,568 10.9 2 Varma Mutual Pension Insurance Company 2,940,275 4.7 3 Gustavson Stig, Chairman of the Board of Konecranes and family *) 2,069,778 3.3 Market cap EUR 1,127 million excluding treasury shares 4 Ilmarinen Mutual Pension Insurance Company 1,483,671 2.4 5 Nordea Investment Funds 1,283,993 2.0 6 The State Pension Fund 917,000 1.5 7 Mandatum Life Insurance Company Ltd. 844,399 1.3 8 Fondita Funds 696,700 1.1 9 OP Investment Funds 664,887 1.1 10 Sigrid Juselius Foundation 638,500 1.0 Konecranes Plc s treasury shares 6,042,456 9.6 Nominee registered shares 18,218,629 28.8 Other shareholders 20,570,571 32.3 Total number of shares 63,241,427 100.0 *) Konecranes Plc has on December 28, 2011 received information according to which the Chairman of the company s Board of Directors Stig Gustavson has donated all of his shares in Konecranes Plc to his near relatives retaining himself for life the voting rights and right to dividend attached to the donated shares. The donation encompasses in total 2,069,778 shares which corresponds to approximately 3.27 percent of all of the company s shares and voting rights. Trading information Listing: NASDAX OMX Helsinki Date of listing: March 27, 1996 Segment: Large Cap Sector: Industrials Trading code: KCR1V 1 3/12 average daily trading volume 710,064 shares, EUR 14.7 million 31
CONTACT INFORMATION Pekka Lundmark, President and CEO Tel. +358 (0)20 427 2000 pekka.lundmark@konecranes.com Teo Ottola, Chief Financial Officer Tel.+358 (0)20 427 2040 teo.ottola@konecranes.com Miikka Kinnunen, Director, Investor Relations Tel. +358 (0)20 427 2050 miikka.kinnunen@konecranes.com Anna-Mari Kautto, Assistant, Investor Relations Tel. +358 (0)20 427 2960 anna-mari.kautto@konecranes.com www.konecranes.com 32
NOT JUST LIFTING THINGS, BUT ENTIRE BUSINESSES 33