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This release is a summary of Konecranes Plc’s Financial Statement Release 2019. The complete report is attached to this release in pdf format and is also available on Konecranes’ website at www.konecranes.com.

Konecranes has applied IFRS 16 Leases standard since January 1, 2019. The figures for comparison period 2018 have not been restated. Please refer to note 4 for more details on the implementation of IFRS 16 standard and other significant accounting policies.

Figures in brackets, unless otherwise stated, refer to the same period a year earlier.

-Order intake EUR 781.3 million (929.8), -16.0 percent (-16.9 percent on a comparable currency basis), driven by order decline in Business Areas Port Solutions and Industrial Equipment
-Service annual agreement base value increased 9.7 percent (+8.2 percent in comparable currencies) to EUR 267.7 million (243.9). Service order intake EUR 250.0 million (249.3), +0.3 percent (-1.2 percent on a comparable currency basis)
-Order book EUR 1,824.3 million (1,715.4) at the end of December, +6.3 percent (+5.6) percent on a comparable currency basis)
-Sales EUR 933.3 million (910.8), +2.5 percent (+1.5 percent on a comparable currency basis), growth in all Business Areas
- Adjusted EBITA margin 9.4 percent (9.4) and adjusted EBITA EUR 87.3 million (85.6); an increase in the adjusted EBITA margin in both Business Area Service and Business Area Ports Solutions offset by a decrease in Business Area Industrial Equipment, primarily due to costs related to certain process cranes projects
-Operating profit EUR 65.5 million (51.9), 7.0 percent of sales (5.7)
-Earnings per share (diluted) EUR 0.57 (0.50)

-Order intake EUR 3,167.3 million (3,090.3), +2.5 percent (+1.3 percent on a comparable currency basis)
-Service order intake EUR 1,015.1 million (986.5), +2.9 percent (+0.6 percent on a comparable currency basis)
-Sales EUR 3,326.9 million (3,156.1), +5.4 percent (+4.1 percent on a comparable currency basis), growth in all three Business Areas
-Adjusted EBITA margin 8.3 percent (8.1) and adjusted EBITA EUR 275.1 million (257.1), reflecting higher sales and synergy cost-savings
-Operating profit EUR 148.7 million (166.2), 4.5 percent of sales (5.3), restructuring costs totaling EUR 100.7 million (53.4)
-Earnings per share (diluted) EUR 1.03 (1.29)
-Free cash flow EUR 148.5 million (73.1)
-Net debt EUR 655.3 million (545.3) and gearing 52.6 percent (42.5), the impact of the implementation of the new IFRS 16 standard on net debt was approximately EUR 120 million at the end of December
-The Board of Directors proposes a dividend of EUR 1.20 (1.20) per share for 2019 to be paid in two equal instalments

On December 5, 2019 Konecranes signed an agreement to acquire from Jebsen & Jensen its 50 percent stake in MHE-Demag. The transaction was closed on January 2, 2020. Share purchase price was approximately EUR 143 million in cash. Pursuant to the “Stock and asset purchase agreement” dated December 5, 2019 the final cash consideration is subject to post-closing adjustments for cash. After the acquisition, Konecranes holds 100 percent of the shares in the company, while Konecranes’ ownership before the acquisition was 50 percent.

MHE-Demag is a leading supplier of industrial cranes and services in Southeast Asia under the MHE and Demag brands, engineering, manufacturing and maintaining a comprehensive range of industrial cranes and hoists. Its customized solutions serve a wide range of industries and customers from general manufacturing to aerospace. MHE-Demag also provides warehousing equipment such as lift trucks and dock levelers, aerial work platforms, building maintenance units and compact construction equipment, as well as automated car parking systems. With the acquisition, Konecranes increases its presence and market coverage in strategically important and fast-growing Southeast Asia.

Service represents approximately 50 percent of MHE-Demag’s annual net sales, with cranes and components at approximately 35 percent and other industrial products at approximately 15 percent. In 2018, MHE-Demag’s net sales were approximately SGD 285 million (EUR 179 million) and EBITA approximately SGD 20 million (EUR 13 million). Konecranes is the main supplier to MHE-Demag, selling crane components under the Demag brand name.

MHE-Demag has approximately 1,800 employees, including some 700 service engineers. MHE-Demag operates 11 factories and more than 70 service locations throughout Southeast Asia and is headquartered in Singapore. MHE-Demag runs own operations in Australia, Indonesia, Malaysia, Singapore, the Philippines, Taiwan, Thailand and Vietnam. In addition, MHE-Demag has distribution through resellers in several countries including Brunei, Cambodia, Laos, Mongolia, Myanmar, Papua New Guinea and Timor-Leste.

Konecranes expects the acquisition to create approximately EUR 10 million of annual synergies at the EBITA level by 2022, including both revenue and cost synergies. One-time costs generated by the integration of MHE-Demag are estimated to total EUR 6 million.

Within the industrial customer segments, the demand environment in Europe continues to weaken but at a slower rate. The demand environment in North America is relatively stable overall and remains on a higher level compared to Europe. Asia Pacific is showing early signs of improving demand conditions.

Despite its recent decline, global container throughput continues on a good level. Although there is hesitation in the decision-making among some port customers, the longer-term prospects for orders related to container handling remain good overall.

Konecranes expects sales in full-year 2020 to increase 7-10 percent year-on-year, including MHE-Demag. Konecranes expects the adjusted EBITA margin to improve in full-year 2020 compared to full-year 2019.


  Fourth quarter January - December
  10-12/ 2019 10-12/ 2018 Change % 1-12/ 2019 1-12/ 2018 Change %
Orders received, MEUR 781.3 929.8 -16.0 3,167.3 3,090.3 2.5
Order book at end of period, MEUR       1,824.3 1,715.4 6.3
Sales total, MEUR 933.3 910.8 2.5 3,326.9 3,156.1 5.4
Adjusted EBITDA, MEUR 1 111.8 101.9 9.7 373.2 325.7 14.6
Adjusted EBITDA, % 1 12.0% 11.2%   11.2% 10.3%  
Adjusted EBITA, MEUR 2 87.3 85.6 2.0 275.1 257.1 7.0
Adjusted EBITA, % 2 9.4% 9.4%   8.3% 8.1%  
Adjusted operating profit, MEUR 1 81.1 76.2 6.5 250.4 219.6 14.0
Adjusted operating margin, % 1 8.7% 8.4%   7.5% 7.0%  
Operating profit, MEUR 65.5 51.9 26.3 148.7 166.2 -10.5
Operating margin, % 7.0% 5.7%   4.5% 5.3%  
Profit before taxes, MEUR 63.3 51.9 22.0 118.5 138.7 -14.6
Net profit for the period, MEUR 45.8 35.8 28.0 82.8 98.3 -15.8
Earnings per share, basic, EUR 0.57 0.50 15.0 1.03 1.29 -20.5
Earnings per share, diluted, EUR 0.57 0.50 15.0 1.03 1.29 -20.5
Interest-bearing net debt, Equity, %       52.6% 42.5%  
Net Debt / Adjusted EBITDA, R12M 1       1.8 1.7  
Return on capital employed, %       6.3% 7.9%  
Adjusted return on capital employed, % 3       12.7% 12.5%  
Free cash flow, MEUR 32.8 76.4   148.5 73.1  
Average number of personnel during the period       16,104 16,247 -0.9

1 Excluding adjustments, see also note 11 in the summary financial statements
2 Excluding adjustments and purchase price allocation amortization, see also note 11 in the summary financial statements
3 ROCE excluding adjustments, see also note 11 in the summary financial statements


President and CEO Rob Smith:

Konecranes in an iconic global industrial company with an impressive heritage and an exciting future. I am proud and delighted to lead the company as its President and CEO. After spending a good amount of time getting to know the company and many of its leaders in the months preceding my official start this week, I’m increasingly enthusiastic about Konecranes, its exceptional qualities, its talented people and its potential. That said, a lot of work lies ahead of us. Together with the leadership team, I look forward to sharing our plans on what’s next for Konecranes at our Capital Markets Day, which we plan to host in Helsinki on June 11.

I will now move on to our financial performance in the fourth quarter. On the Group level, we finished 2019 in line with our expectations. In full-year 2019, Group sales grew 5.4 percent and the Group adjusted EBITA margin finished at 8.3 percent, improving from the previous year. However, the performance between our three business areas varied significantly.

Business Area Service recorded a solid end to the year. In Q4, the annual value of the agreement base grew 8.2 percent year-on-year on a comparable currency basis. That said, lower demand for retrofits and modernizations continued to weigh on order intake, which fell 1.2 percent in comparable currencies versus the year-ago quarter. A clear bright spot was Service’s adjusted EBITA margin, which improved to 18.0 percent in Q4, up 1.4 pps from the previous year. In full-year 2019, the adjusted EBITA margin improved by 1.5 pps to 16.6 percent. While we expect margin expansion to continue in 2020, the improvement will likely come at a slower rate compared to 2019, largely as we continue to invest in growth and expect no further mix improvement this year.

Business Area Port Solutions also continued to perform well in Q4. We received a strategically important order for 18 Automated Rubber Tired Gantry Cranes (ARTG) from Turkey-based Yilport Holding, marking our first ARTG projects in Europe. The deal is the largest ARTG order in the Western hemisphere to date, and covers altogether three terminals, one in Sweden and two in Portugal. Automated RTG operation is coming of age in Europe, and Konecranes is driving that development.

In the full-year, order intake in Port Solutions increased nearly 5 percent in comparable currencies. That said, despite the milestone ARTG contract and some other good orders in Q4, order intake fell by a third in the quarter, as the large Khalifa Port order received last year made the comparison period particularly tough. On a comparable currency basis, sales increased 4.8 percent in the quarter and the adjusted EBITA margin improved to 9.9 percent, primarily due to good project execution. Going into 2020, we expect Port Solutions’ margin performance to remain approximately flat compared to full-year 2019.

Business Area Industrial Equipment continued to struggle in the quarter. While we have all the key ingredients in place for the business’ sustained long-term success – including industry-leading technology and a strong market position in most key geographies – more work is still needed to get the business to the profitability level we expect from it.

In Q4, the adjusted EBITA margin in Industrial Equipment was weighed by some process crane projects. In addition, the performance of Industrial Equipment continued to be affected by the ongoing manufacturing footprint optimization in Vernouillet, France and Wetter, Germany. The national strikes in Finland also played a role, affecting our crane deliveries in the quarter.

Entering 2020, we expect the full-year adjusted EBITA margin in Industrial Equipment to clearly improve versus full-year 2019. Starting from Q1 2020, we no longer have production in Vernouillet, meaning that the site is not expected to weigh on our adjusted results prior to its closing later during the first half. In Wetter, however, we expect the ongoing initiatives to continue to carry costs until the end of the third quarter 2020.

As we continue to drive further efficiencies throughout the company, we are simultaneously shifting our gears towards profitable growth. As a part of ensuring the best building blocks for the next phase in Konecranes’ journey, we acquired the other 50 percent of our MHE-Demag Asian joint venture in the beginning of 2020. The acquisition allows us to expand our footprint in strategically important and fast-growing South East Asia, increasing our sales in Asia Pacific by approximately 30 percent. The acquisition will also bring greater balance to Konecranes’ regional sales structure and enable us to target total annual synergies of approximately EUR 10 million at EBITA level by 2022.

In full-year 2019, MHE-Demag’s order-intake was approximately EUR 200 million and sales approximately EUR 196 million. During 2019, Konecranes’ sales to MHE-Demag were approximately EUR 27 million.

Looking at the year ahead, after a period of deteriorating macroeconomic conditions, our overall demand environment is showing signs of stabilization. Including MHE-Demag, we expect sales growth of between 7-10 percent and an improvement in the adjusted EBITA margin in 2020 compared to 2019, as stated in our financial guidance for the year.

The Board is proposing the dividend for 2019 to remain unchanged from the previous year at EUR 1.20 per share. Furthermore, the Board is proposing the dividend payment to take place in two equal instalments, the first in April and the second in October.

An analyst and press conference will be held at the restaurant Savoy (address: Eteläesplanadi 14, Helsinki, 7th floor) on February 6, 2020, at 11.00 am Finnish time. The Interim Report will be presented by Konecranes’ President and CEO Rob Smith and CFO Teo Ottola.

A live webcast of the conference will begin at 11.00 am at www.konecranes.com. Please see the press release dated January 23, 2020 for the conference call details.

Konecranes Plc plans to publish Interim Report January-March 2020 on April 29, 2020.

Eero Tuulos
Vice President, Investor Relations

Eero Tuulos, Vice President, Investor Relations, tel. +358 (0) 20 427 2050

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 of all makes. In 2019, Group sales totaled EUR 3.33 billion. Including MHE-Demag, the Group has around 18,000 employees in 50 countries. Konecranes shares are listed on the Nasdaq Helsinki (symbol: KCR).

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