This release is a summary of Konecranes Plc’s Half-Year Financial Report January-June 2018. The complete report is attached to this release in pdf format and is also available on Konecranes’ website at www.konecranes.com.
Konecranes applied the full retrospective approach in IFRS 15 transition, and the numbers for the periods in 2017 have been restated. Please refer to note 4 for more details on the implementation of IFRS 15 and other significant accounting policies.
Figures in brackets, unless otherwise stated, refer to the same period a year earlier.
SECOND QUARTER HIGHLIGHTS
- Order intake EUR 760.9 million (790.2), -3.7 percent (-0.6 percent on a comparable currency basis)
- Service order intake EUR 256.8 million (251.4), +2.2 percent (+7.1 percent on a comparable currency basis)
- Order book EUR 1,647.5 million (1,605.9) at end of June, +2.6 percent (+4.0 percent on a comparable currency basis)
- Sales EUR 772.2 million (796.4), -3.0 percent (+0.4 percent on a comparable currency basis)
- Adjusted EBITA EUR 59.8 million (51.1), 7.7 percent of sales (6.4)
- Operating profit EUR 42.0 million (30.0), 5.4 percent of sales (3.8)
- Earnings per share (diluted) EUR 0.28 (0.17)
JANUARY-JUNE HIGHLIGHTS
- Order intake EUR 1,444.0 million (1,524.7), -5.3 percent (-1.5 percent on a comparable currency basis)
- Service order intake 495.3 million (497.6), -0.5 percent (+5.9 percent on a comparable currency basis)
- Order book EUR 1,647.5 million (1,605.9) at end-June, +2.6 percent (+4.0 percent on a comparable currency basis)
- Sales EUR 1,445.0 million (1,480.5), -2.4 percent (+2.0 percent on a comparable currency basis)
- Adjusted EBITA EUR 97.1 million (82.2), 6.7 percent of sales (5.6)
- Operating profit EUR 65.8 million (256.4), 4.6 percent of sales (17.3)
- Earnings per share (diluted) EUR 0.38 (2.68)
- Free cash flow EUR -25.1 million (172.6)
- Net debt EUR 641.6 million (542.4) and gearing 52.9 percent (43.0)
DEMAND OUTLOOK
The demand situation in Europe and North America is improving within the industrial customer segments. Demand in the Asia-Pacific region continues stable. Global container throughput growth continues at a high level, and the prospects for orders related to container handling remain stable.
FINANCIAL GUIDANCE
The sales in 2018 are expected to be approximately on the same level or higher than in 2017. We expect the adjusted EBITA margin to improve in 2018.
KEY FIGURES
|
|
April – June
|
First half year
|
|
|
|
4-6/
2018
|
4-6/
2017
|
Change %
|
1-6/ 2018
|
1-6/ 2017
|
Change%
|
R12M
|
2017
|
|
Orders received, MEUR
|
760.9
|
790.2
|
-3.7
|
1,444.0
|
1,524.7
|
-5.3
|
2,926.7
|
3,007.4
|
|
Order book at end of period, MEUR
|
|
|
|
1,647.5
|
1,605.9
|
2.6
|
|
1,535.8
|
|
Sales total, MEUR
|
772.2
|
796.4
|
-3.0
|
1,445.0
|
1,480.5
|
-2.4
|
3,101.7
|
3,137.2
|
|
Adjusted EBITDA, MEUR 1
|
77.5
|
70.8
|
9.4
|
132.7
|
119.8
|
10.7
|
302.1
|
289.2
|
|
Adjusted EBITDA, % 1
|
10.0%
|
8.9%
|
|
9.2%
|
8.1%
|
|
9.7%
|
9.2%
|
|
Adjusted EBITA, MEUR 2
|
59.8
|
51.1
|
17.1
|
97.1
|
82.2
|
18.1
|
231.5
|
216.6
|
|
Adjusted EBITA, % 2
|
7.7%
|
6.4%
|
|
6.7%
|
5.6%
|
|
7.5%
|
6.9%
|
|
Adjusted operating profit, MEUR 1
|
50.5
|
41.3
|
22.2
|
78.3
|
62.5
|
25.2
|
193.8
|
178.0
|
|
Adjusted operating margin, % 1
|
6.5%
|
5.2%
|
|
5.4%
|
4.2%
|
|
6.2%
|
5.7%
|
|
Operating profit, MEUR
|
42.0
|
30.0
|
39.8
|
65.8
|
256.4
|
-74.3
|
128.1
|
318.7
|
|
Operating margin, %
|
5.4%
|
3.8%
|
|
4.6%
|
17.3%
|
|
4.1%
|
10.2%
|
|
Profit before taxes, MEUR
|
31.4
|
13.9
|
126.1
|
42.8
|
236.0
|
-81.8
|
82.8
|
276.0
|
|
Net profit for the period, MEUR
|
22.4
|
14.5
|
54.8
|
30.6
|
207.8
|
-85.3
|
48.2
|
225.4
|
|
Earnings per share, basic, EUR
|
0.28
|
0.17
|
59.6
|
0.38
|
2.68
|
-85.7
|
0.59
|
2.89
|
|
Earnings per share, diluted, EUR
|
0.28
|
0.17
|
59.6
|
0.38
|
2.68
|
-85.7
|
0.59
|
2.89
|
|
Interest-bearing net debt, Equity, %
|
|
|
|
52.9%
|
43.0%
|
|
|
41.1%
|
|
Net Debt / Adjusted EBITDA, R12M 1
|
|
|
|
2.1
|
2.3
|
|
|
1.8
|
|
Return on capital employed, %
|
|
|
|
|
|
|
5.9%
|
23.7%
|
|
Adjusted return on capital employed, % 3
|
|
|
|
|
|
|
11.4%
|
15.4%
|
|
Free cash flow, MEUR
|
-22.9
|
84.6
|
|
-25.1
|
172.6
|
|
116.9
|
224.4
|
|
Average number of personnel during the period
|
|
|
|
16,265
|
14,867
|
9.4
|
|
15,519
|
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 statement
3 ROCE excluding adjustments, see also note 11 in the summary financial statements
President and CEO Panu Routila:
“We continued to make good progress in execution in the second quarter.
In Business Area Service, the year-on-year growth in order intake accelerated to 7.1 percent in comparable currencies. The growth was driven primarily by field services in EMEA and the Americas. We also made good progress in growing the value of our agreement base in Q2. On a comparable currency basis, the value increased by EUR 3.4 million from the previous quarter. I am very happy with the performance in Service so far and expect the trend to continue in the coming quarters.
When looking purely at the number of units in the agreement base, some of the progress has been offset by adjustments made in Q2, as we have harmonized our reporting practices. It is likely that we’ll see further adjustments also in the coming periods, as we continue the review of our current agreement base and the implementation of the oneKONECRANES IT infrastructure.
The solid performance is also evident in our Group adjusted EBITA margin, which improved to 7.7 percent in Q2. This is fully in line with our expectations and plans towards our post-integration EBITA-target of 11 percent for the full year 2020. Our expectation is that this journey will be a gradual evolution, rather than an avalanche of results in the immediate future.
Our run-rate synergies reached EUR 80 million in Q2. Having passed the halfway mark of our synergy savings program has further strengthened our confidence that we will reach the planned EBIT-level run-rate synergies of EUR 140 million at the end of 2019.
Business Area Industrial Equipment also had a good Q2. On a comparable currency basis, external orders grew organically by 2.4 percent in the second quarter compared to the year-ago period. Order intake growth for components accelerated in Q2, in addition to solid growth in order intake for standard cranes in EMEA. Apart from the Americas, order intake for process cranes fell year-on-year. The good order intake in Industrial Equipment was partly explained by the component price increases, which became effective from the beginning of Q3. Consequently, we expect the order intake for components to be affected in the second half, similarly to last year.
The reorganization of our manufacturing network led to limited temporary production delays in certain countries. The reasons for these delays, which now have been resolved, affected net sales and profitability in the second quarter in Business Area Industrial Equipment.
In Port Solutions, the year-on-year decline in order intake was primarily driven by Mobile Harbor Cranes due to the smaller number of orders available in the quarter. On the other hand, the value of Rubber Tyred Gantry Crane orders in Q2 more than doubled from the previous year. Overall the market sentiment for Business Area Port Solutions remains stable and at a good level.
From the net sales point of view, the first half of the year was strong in Port Solutions. The particularly good project execution for the finalized, as well as for the ongoing projects helped to boost Port Solution’s EBITA margin in Q2. However, some of this was specific to the first half of the year, and it is therefore unlikely that Port Solutions would be able to carry its current margin performance fully into the second half.
While the key macroeconomic indicators are signaling slowing growth in many economies, including Europe and the US, our own demand environment is still showing signs of improvement. This gives us confidence when entering the second half of the year. Consequently, we have today updated our demand outlook to reflect improved conditions in Europe and stabilizing conditions in APAC within the industrial customer segments. We have also reiterated our financial guidance for the full year 2018. Based on the current FX rates, we expect the headwind from foreign exchange fluctuations to ease in the second half. Assuming the FX rates would stay at their current level, the negative impact on our full year sales will be approximately 2.5 percent.”
Analyst and press briefing
An analyst and press conference will be held at the restaurant Savoy’s Salikabinetti (address: Eteläesplanadi 14) on July 25, 2018 at 11.00 a.m. Finnish time. The half-year financial report will be presented by the Konecranes’ President and CEO Panu Routila and CFO Teo Ottola.
A live webcast of the conference will begin at 11.00 a.m. at www.konecranes.com. Please see the stock exchange release dated July 11, 2018 for the conference call details.
KONECRANES PLC
Eero Tuulos President, Investor Relations
FURTHER INFORMATION
Mr. Panu Routila, President and CEO, tel. +358 20 427 2000
Mr. Teo Ottola, Chief Financial Officer, tel. +358 20 427 2040
Mr. Eero Tuulos, Vice President, Investor Relations, tel. +358 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 2017, Group sales totaled EUR 3,136 million. The Group has 16,200 employees at 600 locations in 50 countries. Konecranes shares are listed on the Nasdaq Helsinki (symbol: KCR).
DISTRIBUTION
Nasdaq Helsinki
Major media
www.konecranes.com
