Konecranes PLC - Interim Report January–March 2015
05/01/2015 - Strong order intake, service result continued to improve,equipment result weak.
Figures in brackets, unless otherwise stated, refer to the same period a year earlier.
FIRST QUARTER HIGHLIGHTS
- Order intake EUR 518.8 million (439.3), +18.1 percent; Service +5.2 percent and Equipment +25.4 percent.
- Service contract base value EUR 210.7 million (182.5), +15.5 percent; +3.9 percent at comparable currency rates.
- Order book EUR 1,111.1 million (937.9) at the end of March, 18.5 percent higher than a year ago, 13.4 percent higher than at the end of 2014.
- Sales EUR 474.9 million (427.3), +11.1 percent; Service +13.5 percent and Equipment +8.3 percent.
- Operating profit before restructuring costs EUR 14.2 million (15.6), -9.0 percent, 3.0 percent of sales (3.6).
- Restructuring costs EUR 2.3 million (0.4).
- Operating profit including restructuring costs EUR 11.8 million (15.2), 2.5 percent of sales (3.6).
- Earnings per share (diluted) EUR 0.10 (0.15).
- Net cash flow from operating activities EUR -54.4 million (-24.9).
- Net debt EUR 199.4 million (221.5) and gearing 46.8 percent (57.0).
MARKET OUTLOOK
European customers are still cautious about investing, but the number of inquiries is increasing. In the U.S., the market outlook remains generally positive, but the industrial production indicators are suggesting some softening of the growth rate. The near-term market outlook in emerging markets remains uncertain. Continued contract base growth bodes well for the future of the service business. The quarterly Equipment order intake may fluctuate due to the timing of the large port crane projects.
FINANCIAL GUIDANCE
Based on the order book, service contract base, and the near-term demand outlook, the year 2015 sales are expected to be higher than in 2014. We expect the 2015 operating profit, excluding restructuring costs, to improve from 2014.
President and CEO Pekka Lundmark:
“The uneven development between our two businesses continued in the first quarter. Service business performed well across the board and the steady profit growth that we have seen since 2011 continued. Our service contract base now stands at EUR 211 million, 15.5 percent up from a year ago. Coupled with a promising funnel of new opportunities, new information systems, and new service product introductions, this bodes well for the future of the business.
Equipment business had a challenging quarter. Seasonally low delivery volume coupled with unfavorable product mix, and the fact that the currency tailwind was not yet visible in the result due to hedging lowered the result below last year’s level. Better performance is expected for the rest of the year since the order book of the business is almost all-time high, pushing delivery volumes up in the coming quarters. The earlier announced EUR 30-million cost-saving program that will be implemented by the end of the first quarter 2016 is also gaining momentum. In addition, the weaker euro will start to support the result of the Equipment business quarter by quarter.”
For the full report, visit www.konecranes.com.
FIRST QUARTER HIGHLIGHTS
- Order intake EUR 518.8 million (439.3), +18.1 percent; Service +5.2 percent and Equipment +25.4 percent.
- Service contract base value EUR 210.7 million (182.5), +15.5 percent; +3.9 percent at comparable currency rates.
- Order book EUR 1,111.1 million (937.9) at the end of March, 18.5 percent higher than a year ago, 13.4 percent higher than at the end of 2014.
- Sales EUR 474.9 million (427.3), +11.1 percent; Service +13.5 percent and Equipment +8.3 percent.
- Operating profit before restructuring costs EUR 14.2 million (15.6), -9.0 percent, 3.0 percent of sales (3.6).
- Restructuring costs EUR 2.3 million (0.4).
- Operating profit including restructuring costs EUR 11.8 million (15.2), 2.5 percent of sales (3.6).
- Earnings per share (diluted) EUR 0.10 (0.15).
- Net cash flow from operating activities EUR -54.4 million (-24.9).
- Net debt EUR 199.4 million (221.5) and gearing 46.8 percent (57.0).
MARKET OUTLOOK
European customers are still cautious about investing, but the number of inquiries is increasing. In the U.S., the market outlook remains generally positive, but the industrial production indicators are suggesting some softening of the growth rate. The near-term market outlook in emerging markets remains uncertain. Continued contract base growth bodes well for the future of the service business. The quarterly Equipment order intake may fluctuate due to the timing of the large port crane projects.
FINANCIAL GUIDANCE
Based on the order book, service contract base, and the near-term demand outlook, the year 2015 sales are expected to be higher than in 2014. We expect the 2015 operating profit, excluding restructuring costs, to improve from 2014.
President and CEO Pekka Lundmark:
“The uneven development between our two businesses continued in the first quarter. Service business performed well across the board and the steady profit growth that we have seen since 2011 continued. Our service contract base now stands at EUR 211 million, 15.5 percent up from a year ago. Coupled with a promising funnel of new opportunities, new information systems, and new service product introductions, this bodes well for the future of the business.
Equipment business had a challenging quarter. Seasonally low delivery volume coupled with unfavorable product mix, and the fact that the currency tailwind was not yet visible in the result due to hedging lowered the result below last year’s level. Better performance is expected for the rest of the year since the order book of the business is almost all-time high, pushing delivery volumes up in the coming quarters. The earlier announced EUR 30-million cost-saving program that will be implemented by the end of the first quarter 2016 is also gaining momentum. In addition, the weaker euro will start to support the result of the Equipment business quarter by quarter.”
For the full report, visit www.konecranes.com.
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 2014, Group sales totaled EUR 2,011 million. The Group has 12,000 employees at 600 locations in 48 countries. Konecranes is listed on the Nasdaq Helsinki (symbol: KCR1V).
