KONECRANES PLC FINANCIAL STATEMENT RELEASE 2020 FEBRUARY 4, 2021 8:30 am EET
Konecranes Plc: Financial statement release 2020
Strong performance provides solid foundation for growth
This release is a summary of Konecranes Plc’s financial statement release 2020. The complete report is attached to this release in pdf format and is also available on Konecranes’ website at www.konecranes.com.
This report contains comparisons to Konecranes’ historical figures which are Konecranes’ stand-alone financial information as reported for 2019. These do not include figures for MHE-Demag as the acquisition of MHE-Demag was completed in January 2020. The combined operations of Konecranes and MHE-Demag started on January 2, 2020.
The figures presented in this report are unaudited. Figures in brackets, unless otherwise stated, refer to the same period a year earlier.
FOURTH QUARTER HIGHLIGHTS
- Order intake EUR 843.3 million (781.3), +7.9 percent (+11.4 percent on a comparable currency basis), driven by order intake increase in Business Area Port Solutions
- Service annual agreement base value increased 3.0 percent (+8.0 percent in comparable currencies) to EUR 275.7 million (267.7). Service order intake was EUR 233.6 million (250.0), -6.5 percent (-2.0 percent on a comparable currency basis)
- Order book EUR 1,715.5 million (1,824.3) at the end of December, -6.0 percent (-2.9 percent on a comparable currency basis)
- Sales EUR 936.8 million (933.3), +0.4 percent (+3.2 percent on a comparable currency basis), driven by sales growth in Business Area Port Solutions
- Adjusted EBITA margin 10.9 percent (9.4) and adjusted EBITA EUR 102.1 million (87.3); the increase was mainly attributable to continued progress on strategic initiatives and cost management
- Operating profit EUR 83.0 million (65.5), 8.9 percent of sales (7.0), restructuring and transaction costs totaled EUR 10.1 million (15.6)
- Earnings per share (diluted) EUR 0.69 (0.57)
- Free cash flow EUR 177.2 million (32.8), driven by net working capital development
FULL YEAR 2020 HIGHLIGHTS
- Order intake EUR 2,727.3 million (3,167.3), -13.9 percent (-12.6 percent on a comparable currency basis)
- Service order intake EUR 927.8 million (1,015.1), -8.6 percent (-6.5 percent on a comparable currency basis)
- Sales EUR 3,178.9 million (3,326.9), -4.4 percent (-3.0 percent on a comparable currency basis)
- Adjusted EBITA margin 8.2 percent (8.3) and adjusted EBITA EUR 260.8 million (275.1); the adjusted EBITA margin improved in Service as well as in Industrial Equipment and decreased Port Solutions
- Operating profit EUR 173.8 million (148.7), 5.5 percent of sales (4.5), restructuring and transaction costs totaled EUR 51.1 million (101.7)
- Earnings per share (diluted) EUR 1.54 (1.03)
- Free cash flow EUR 366.1 million (148.5)
- Net debt EUR 577.1 million (655.3) and gearing 46.1 percent (52.6)
- The Board of Directors proposes a dividend of EUR 0.88 (1.20) per share for 2020
FIRST QUARTER DEMAND OUTLOOK
The worldwide demand picture remains subject to volatility due to the COVID-19 pandemic.
In Europe and North America, the current demand environment within the industrial customer segments is showing signs of improvement but remains below the year-end 2019 level. At the moment, the demand environment in Europe is less volatile compared to North America. In Asia-Pacific, demand environment has started to show signs of improvement also outside China but remains below the year-end 2019 level.
Global container throughput has reached the previous year’s level, and long-term prospects related to global container handling remain healthy.
Konecranes expects net sales to increase in full-year 2021 compared to 2020. Konecranes expects the full-year 2021 adjusted EBITA margin to improve from 2020.
||January - December
|Orders received, MEUR
|Order book at end of period, MEUR
|Sales total, MEUR
|Adjusted EBITDA, MEUR 1
|Adjusted EBITDA, % 1
|Adjusted EBITA, MEUR 2
|Adjusted EBITA, % 2
|Adjusted operating profit, MEUR 1
|Adjusted operating margin, % 1
|Operating profit, MEUR
|Operating margin, %
|Profit before taxes, MEUR
|Net profit for the period, MEUR
|Earnings per share, basic, EUR
|Earnings per share, diluted, EUR
|Interest-bearing net debt / Equity, %
|Net debt / Adjusted EBITDA, R12M 1
|Return on capital employed, %
|Adjusted return on capital employed, % 3
|Free cash flow, MEUR
|Average number of personnel during the period
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 ended an extraordinary year on a high note. Great sales execution, high performance and cost management across the whole organization delivered an adjusted EBITA margin of 10.9% in Q4, our second consecutive quarter of record-breaking profitability. Our continued strong performance and traction from the strategic actions we have implemented during this challenging year, supported by our Q4 orders, ensure that Konecranes is ready for the future.
While COVID-19 related market uncertainty and volatility is not over, overall market sentiment improved in Q4 compared to the previous two quarters and some of our port customers decided to move forward with their orders. As a result, Konecranes’ Q4 order intake grew 11.4% year-on-year in comparable currencies. Orders increased in all three Business Areas quarter-on-quarter and Port Solutions booked record orders of €404.7 million.
Our Q4 sales improved 3.2% year-on-year in comparable currencies, driven especially by the strong sales execution in Port Solutions. In addition, both Industrial Equipment and Service sales improved sequentially and were only 3% behind last year’s Q4 in comparable currencies. This was an excellent result, as COVID-19 regional restrictions and lockdowns were tightened again in Q4. My warm thanks go again to our employees as well as our customers for enabling safe and timely deliveries, installations and onsite service work.
Q4 Service order intake declined by 2% year-on-year in comparable currencies. We were pleased to see some improvement in the market sentiment also in APAC. Service’s focus on cost efficiency continued and, with its 19.2% adjusted EBITA margin, it set a second consecutive quarterly profitability record. The agreement base value also grew by 8% from the previous year in comparable currencies, including MHE-Demag.
Industrial Equipment had yet another strong quarter in terms of execution. Both orders and sales improved sequentially, and the adjusted EBITA margin came in at 5.8%, driven by good progress with the turnaround of process crane business and lean operations, procurement and project management initiatives. This positive development demonstrates that Industrial Equipment is heading in the right direction.
In Port Solutions, the quarter was record-breaking both in terms of order intake and net sales. In addition to the publicly announced DP World Antwerp Gateway order of 34 Automated Stacking Cranes, Ship-to-Shore Gantry Cranes, Rubber Tire Gantry Cranes and Mobile Harbor Cranes had a strong order intake for the quarter. Although COVID-19 travel restrictions and quarantines continued to hinder our execution, Port Solutions was able to book record-high sales of €355 million, closing the year with an adjusted EBITA margin of 8.1%.
Q4 was eventful and successful beyond the financials. Sustainability is at the core of our business, and CDP1 results published in December recognized our ambitious climate work with an A- rating. Shortly after, we announced our exciting partnership with The Ocean Cleanup to design, manufacture, and service The Ocean Cleanup's Interceptor™, which is designed to extract plastic from rivers before they enter the world’s oceans. Konecranes also signed the commitment letter for the Science Based Targets Initiative (SBTi). In the coming months, we will define new climate targets for our operations, reinforcing our commitment to cut emissions, further develop our already strong low-carbon portfolio and mitigate climate risks.
Our announcement on 1 October to merge with Cargotec to create a global leader in sustainable material flow underpins our strategic plans and growth ambitions. In December, shareholders of both companies gave their support for the plan. The extraordinary general meeting approvals were a major step towards the completion of the merger, which is currently expected to take place on 1 January 2022, given all conditions and merger control approvals for completion are fulfilled. Until then, both companies will operate fully separately and independently.
Turning to 2021, we expect market volatility to continue as the world battles COVID-19. While we can be proud of how we have adapted to the pandemic, we will remain vigilant on both demand and costs as we have entered what is historically our seasonally weakest quarter. Today, we have updated our demand outlook for Q1 and given new guidance for full-year 2021. We expect our net sales to increase in full-year 2021 compared to 2020. Given our performance track record and the continued implementation of our strategic initiatives, we expect our full-year adjusted EBITA margin to improve from 2020.
In 2021, Konecranes will maintain its strategic focus and will continue its commitment to business excellence, high performance and sustainability. Together with our extraordinary team, the actions we undertook in 2020 provide a solid foundation for Konecranes’ future success.
1) CDP is an international non-profit organization that runs a global disclosure system for investors, companies, cities, states and regions to manage their environmental impacts (www.cdp.net).
ANALYST AND PRESS BRIEFING
A live international webcast for analysts, investors and media will be held on February 4, 2021, at 10:30 a.m. Finnish time. The financial statement release 2020 will be presented by Konecranes’ President and CEO Rob Smith and CFO Teo Ottola.
Please see the press release dated January 21, 2021 for the webcast details.
Konecranes Plc plans to publish Interim Report January-March 2021 on April 28, 2021.
Vice President, Investor Relations
Vice President, Investor Relations,
tel. +358 (0) 20 427 2050
The Merger and the merger consideration securities have not been and will not be registered under the U.S. Securities Act, and may not be offered, sold or delivered within or into the United States, except pursuant to an applicable exemption of, or in a transaction not subject to, the U.S. Securities Act.
The information in this release is not directed to, or intended for distribution to or use by, any person or entity that is a citizen or resident of, or located in, any locality, state, country or other jurisdiction where such distribution or use would be contrary to law or regulation or which would require any registration or licensing within such jurisdiction and it does not constitute an offer of or an invitation by or on behalf of, Konecranes, or any other person, to purchase any securities.
The information in this release contains forward-looking statements, which are information on Konecranes’ current expectations and projections relating to its financial condition, results of operations, plans, objectives, future performance and business. These statements may include, without limitation, any statements preceded by, followed by or including words such as “target,” “believe,” “expect,” “aim,” “intend,” “may,” “anticipate,” “estimate,” “plan,” “project,” “will,” “can have,” “likely,” “should,” “would,” “could” and other words and terms of similar meaning or the negative thereof. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond Konecranes’ control that could cause Konecranes’ actual results, performance or achievements to be materially different from the expected results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding Konecranes’ present and future business strategies and the environment in which it will operate in the future.
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 2020, Group sales totaled EUR 3.2 billion. The Group has around 16,900 employees in 50 countries. Konecranes shares are listed on the Nasdaq Helsinki (symbol: KCR).