April 28, 2010 Pekka Lundmark, President and CEO Teo Ottola, CFO Q1 2010 Interim Report

April 28, 2010Pekka Lundmark, President and CEOTeo Ottola, CFO

Q1 2010Interim Report

Highlights of Q1/10

Positives• Improving macro indicators• Service showing signs of a recovery• Successful cost savings actions supported result• Alliance with Kito

Negatives• Continued low new equipment demand• Intense price competition• Profit burdened by low deliveries

2© 2010 Konecranes Plc. All rights reserved.

ORDERS RECEIVED Y/ Y EMEA AME APAC

SERVICE

EQUIPMENT

Capacity utilization: EU27 and USA


SOURCES: Eurostat, Federal Reserve Bank of St. Louis

72,7

69,4

64

66

68

70

72

74

76

78

80

82

84

86

Jan 2005

Jul 2005

Jan 2006

Jul 2006

Jan 2007

Jul 2007

Jan 2008

Jul 2008

Jan 2009

Jul 2009

Jan 2010

Capacity utilisation in the USA

Total industry Manufacturing

72,9

64

66

68

70

72

74

76

78

80

82

84

86

2005

Q01

2005

Q02

2005

Q03

2005

Q04

2006

Q01

2006

Q02

2006

Q03

2006

Q04

2007

Q01

2007

Q02

2007

Q03

2007

Q04

2008

Q01

2008

Q02

2008

Q03

2008

Q04

2009

Q01

2009

Q02

2009

Q03

2009

Q04

2010

Q01

Capacity utilisation of manufacturing in EU

Container traffic


SOURCES: Drewry Container Annual 2009/2010, Drewry Freight Shipper Inshight

Annual port handling volume Monthly port handling volume

0

100

200

300

400

500

600

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

Million teu

-25 %

-20 %

-15 %

-10 %

-5 %

0 %

5 %

10 %

15 %

20 %

25 %

Change Y/Y

• Founded in 1932 and listed on the Tokyo Stock Exchange in 2007

• Serves customers mainly in Japan, North America and China

• Clear market leader for manual and electric chain hoists in Japan

• For the year ended March 31, 2009, Kito’s net sales amounted to EUR 227 million and operating profit to EUR 16.5 million

• Kito has approximately 1,500 employees and factories in Japan, China and the Philippines

Facts about Kito Corporation

© 2010 Konecranes Plc. All rights reserved. 5

• Purchase of 22% of shares for EUR 27 million

• Konecranes will sell Kito manual products; Kito will sell wire rope hoist made by Konecranes

• Enhances Konecranes’ presence in East Asia and North America

• Possibilities to expand co-operation• Both companies will retain own

identity and independence

Strategic alliance with Kito Corporation


Q1/2010 Group orders and net sales


Orders: 320.6 (369.7) MEUR, -13.3% | Net sales: 306.3 (442.1) MEUR, -30.7%

Sales split by business area & region, R12M


R12M 1,535 MEUR

(FY 2009 1,671)

16%(16%)

56%(56%)

28%(29%)

61%(63%)

39%(37%)

R12M1,535 MEUR

(FY 2009 1,671)

Order book at end of the period 641.3 (792.0) MEUR, -19.0%

Group order book


Q1/2010 Group EBIT & margin


EBIT: 11.6 (36.8) MEUR | Margin: 3.8% (8.3%)

Return on capital employed


*The 2007 ROCE including capital gain was 50.4%

ROCE %

24.3

17.8

10.813.7

17.2

29.5

46.2 *

56.3

19.3

14.6

Future prospects as of April 28, 2010


• 2010 guidance for sales and operating profit reiterated, Services’ demand outlook changed

• Market uncertainty to continue• Demand outlook for maintenance

services has improved as a result of higher capacity utilization within customer industries

• Demand for new equipment to remain on a low level

– Price competition to remain• Order book lower than a year ago

Sales in 2010 forecast to be lower than in 2009

Operating profit in 2010 expected to be lower than in 2009 before restructuring costs

Service

Orders: 139.8 (125.6) MEUR, 11.3% | Net sales: 148.0 (169.7) MEUR, -12.8%

Q1/2010 Service: orders & net sales

• New orders grew in all geographic regions• Higher orders across several business units with particular

strength in Modernization due to large single orders


EBIT: 9.8 (15.7) MEUR | Margin: 6.6% (9.3%)

Q1/2010 Service: EBIT & margin


• Profitability declined due to lower volumes

Q1/2010 Service: contract base 367 (366) thousand units, 0.3% | Annual value 132 (127) MEUR, 3.4%


Service: order book87.7 (109.1) MEUR, -19.6%


0

20

40

60

80

100

120

Q1/ 09 Q2/ 09 Q3/ 09 Q4/ 09 Q1/ 10

MEUR

Equipment

Q1/2010 Equipment: orders & net sales

• Orders decreased both in EMEA and the Americas, but grew in APAC due to strong growth in China

• Orders declined both Y/Y and Q/Q due to lack of large single block orders for port equipment particularly


Orders: 196.2 (263.9) MEUR, -25.7% | Net sales: 185.8 (304.6) MEUR, -39.0%

Q1/2010 Equipment: EBIT & margin

• Profitability declined due to declining volumes• Negative profit impact could not be fully offset by cost savings actions


EBIT: 6.0 (26.8) MEUR, -77.4% | Margin: 3.3% (8.8%)

Equipment: order bookOrder book: 558.2 (701.9) MEUR, -20.5%


0

100

200

300

400

500

600

700

800

Q1/ 09 Q2/ 09 Q3/ 09 Q4/ 09 Q1/ 10

MEUR

Balance Sheet and Cash Flow

Q1/2010 Net working capital 102.5 (267.0) MEUR | 6.7% (12.7%) of LTM sales | 156.0 MEUR | 10.2% of LTM sales incl. dividends


0 %

2 %

4 %

6 %

8 %

10 %

12 %

14 %

16 %

0

50

100

150

200

250

300

Q1/ 07 Q2/ 07 Q3/ 07 Q4/ 07 Q1/ 08 Q2/ 08 Q3/ 08 Q4/ 08 Q1/ 09 Q2/ 09 Q3/ 09 Q4/ 09 Q1/ 10

MEUR NWC, MEUR NWC INCL. DIVIDENDS, MEUR % OF SALES % OF SALES INCL. DIVIDENDS

Cash flow before financing activities


*Including capital gain

*

30.9 MEUR capexon acquisitions and investments in associated companies

Q1/2010 Gearing


Equity: 373.7 (379.7) MEUR | Net debt: -46.6 (37.8) MEUR | Gearing; -12.4% (10.0%)

Appendixes

Statement of income

Q1 2010 MEUR

Q1 2009MEUR

% Change

Sales 306.3 442.1 -30.7

Other operating income 0.8 0.7

Depreciation and impairments -7.3 -6.8

Other operating expenses -288.2 -399.2

Operating profit 11.6 36.8 -68.6

Share of associates’ and joint ventures’ result 0.1 0.0

Financial income and expenses 0.7 -1.5

Income before taxes 12.4 35.4 -64.9

Taxes -3.7 -10.1

Net income for the period 8.8 25.3 -65.4


Balance sheet

MEUR Q1 2010 Q1 2009 Q1 2010 Q1 2009

Non-current assets 324.9 241.2 Equity 373.7 379.7

Inventories 271.1 356.7 Non-current liabilities 111.8 180.4

Other current assets 395.5 468.4 Provisions 58.6 46.9

Cash and cash equivalents

121.1 116.0 Current liabilities 568.6 575.3

Total assets 1 112.7 1 182.2Total equity and

liabilities1 112.7 1 182.2


Cash flow statement

MEUR Q1 2010 Q1 2009

Operating income before change in net working capital 19.3 43.9

Change in net working capital 10.8 9.5

Financing items and taxes -29.6 -20.8

Net cash from operating activities 0.5 32.6

Net cash used in investing activities -35.0 -5.0

Cash flow before financing activities -34.5 27.6

Proceeds from options exercised and share issues 0.9 0.7

Change of interest-bearing debt 10.0 38.8

Dividends paid to equity holders of the parent 0.0 -53.3

Net cash used in financing activities 10.9 -13.8

Translation differences in cash 7.1 1.3

Change of cash and cash equivalents -16.5 15.1

Cash and cash equivalents at beginning of period 137.5 100.9

Cash and cash equivalents at end of period 121.1 116.0

Change of cash and cash equivalents -16.5 15.1


Key figures

Q1 2010MEUR

Q1 2009MEUR

% Change

Sales 306.3 442.1 -30.7

Operating profit (EBIT), including restructuring costs 11.6 36.8 -68.6

Profit before taxes 12.4 35.4 -64.9

Net profit for the period 8.8 25.3 -65.4

Cash flow from operations before financing items and taxes

30.1 53.4

Cash flow from operating activities per share (EUR) 0.01 0.55

Interest bearing net debt -46.6 37.8 -223.2

Gearing (%) -12.4 10.0

Solidity (%) 40.2 38.5

Return on capital employed (%), (R12M) 14.6 50.4 -71.0

Return on equity (%), (R12M) 12.2 49.4 -75.3

Equity per share (EUR) 6.26 6.38 -1.9

Investments total (excl. acquisitions) 4.2 6.0 -29.5

Personnel at end of period 9 562 9 866 -3,1

Personnel on average during the period 9 672 9 885 -2,2


Share details and ownership information

Trading information•Listing: NASDAX OMX Helsinki•Date of listing: March 27, 1996•Segment: Large Cap•Sector: Industrials•Trading code: KCR1V•Q1/10 average daily trading volume 505,322 shares, EUR 10.8 million

Largest shareholders on March 31, 2010

Nr of shares

% of all shares

1 Htt 2 Holding Ltd 3,694,500 5.96%

2 Gustavson Stig, Chairman of the Board of Konecranes

2,036,772 3.29%

3 Varma Mutual Pension Insurance Company

2,005,275 3.24%

4 Nordstjernan Ab 1,380,024 2.23%

5 Nordea Nordenfonden 1,109,591 1.79%

6 Ilmarinen Mutual Pension Insurance Company

1,076,978 1.74%

7 Sigrid Juselius Foundation 601,500 0.97%

8 Mandatum Life Insurance Company Ltd. 558,695 0,90%

9 The State Pension Fund 550,000 0.89%

10 Folkhälsan non-governmental organization svenska Finland rf

535,600 0.86%

Konecranes’ treasury shares 2,542,600 4.10%

Nominee registered shares 29,834,749 48.15%

Other shareholders 13,302,676 21.47%

Total number of shares 61,872,920 100,00%

Market cap > EUR 1 bn


48% 32%

14%

7%

Contact information

• Pekka Lundmark, President and CEOtel. +358 (0)20 427 2000 [email protected]

• Teo Ottola, Chief Financial Officertel.+358 (0)20 427 2040 [email protected]

• Miikka Kinnunen, Director, Investor Relationstel: +358 (0)20 427 [email protected]

• Anna-Mari Kautto, Assistant, Investor Relationstel. +358 (0)20 427 [email protected]

www.konecranes.com


mailto:[email protected]




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Documents

April 28, 2010 Pekka Lundmark, President and CEO Teo Ottola, CFO Q1 2010 Interim Report