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Q3 2010 interim report

Q3 2010 interim report. October 21,2010 Pekka Lundmark, President and CEO Teo Ottola, CFO. Highlights of q3/10. Positives Key macroeconomic indicators continued to point to a recovery Improving new equipment demand

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Q3 2010 interim report

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  1. Q3 2010interim report October 21,2010 Pekka Lundmark, President and CEO Teo Ottola, CFO

  2. Highlights of q3/10 • Positives • Key macroeconomic indicators continued to point to a recovery • Improving new equipment demand • Improved EBIT margin in Equipment thanks to higher volume, successful cost savings, favorable product mix, FX tailwind • Negatives • New equipment orders still relatively low in developed markets • Continued price competition especially in standard equipment

  3. Capacity utilization: eu27 and usa SOURCES: Eurostat, Federal Reserve Bank of St. Louis

  4. Container traffic Annual container handling volume Monthly container handling volume SOURCES: Drewry Container Annual 2009/2010, Drewry Freight Shipper Insight

  5. Market outlook and financial guidance as of Oct 21, 2010 • The demand for maintenance services is expected to continue to be above last year’s level due to higher capacity utilization within customer industries • The demand for new equipment is expected to remain robust in Asia-Pacific and in emerging markets in general while customers’ decision-making is still conditional on the sustainability of economic growth in western Europe and North America • Price competition to remain • Financial guidance unchanged • Growing demand will support our sales and profitability already during the second half of 2010 • However, due to the low first half year sales we expect full year 2010 sales to be lower than in 2009 • Operating profit in 2010 expected to be lower than in 2009 before restructuring costs

  6. Combination of organic and acquisitive growth Our main strategy is to grow organically In M&A, our first priority are bolt-on acquisitions We also keep an open mind towards larger M&A

  7. Acquisitions in 2010 • Five MTS companies: two in Denmark and in the UK, one in the US • Crane service and MTS company in France • Purchase of 22% of shares in Kito • Capex on acquisitions and investments in associated companies EUR 35.1 million in January-September • Acquisitive impact approximately 4% on orders and 3% on sales in January-September

  8. ACQUISITION OF INDIAN WMI CRANES • One of the leading suppliers of heavy-duty cranes in India • Development of offering in India, adds in India to supply and sourcing network, enhances service business in India • Acquisition in two phases within a year, maximum price approx. EUR60m • Net sales of EUR30m, order book of more than EUR50m, good order prospects • Approximately 350 people and additionally contracted workforce of about 600 persons *Closing subject to regulatory approvals

  9. Q3/2010 GROUP ORDERS AND NET SALESOrders: 373.4 (308.5) MEUR, +21.0% | Net sales: 393.6 (368.7) MEUR, +6.8%

  10. Q3/2010 GROUP EBIT & MARGINEBIT: 34.3 (24.0) MEUR, +42.5% | Margin: 8.7% (6.5%), excluding restructuring costs

  11. 1-9/2010 group orders received1 058.3 (987.7) MEUR, +7.1%

  12. Group order book September 30, 2010679.7 (638.4) MEUR, +6.5%

  13. 1-9/2010 Group net sales1 076.9 (1 242.4) MEUR, -13.3%

  14. 1-9/2010 group EBIt & marginebit: 69.2 (91.6) MEUR | margin: 6.4% (7.4%), excluding restructuring costs

  15. Sales split by business area and region (R12M) 17% (16) R12M 1,506 MEUR (FY 2009 1,671) R12M 1,506 MEUR (FY 2009 1,671) 59% 41% 30% 54% (63) (37) (29) (56)

  16. Return on capital employed ROCE % 56.3 46.2* 29.5 24.3 19.3 17.8 17.2 18.8 13.7 10.8 *The 2007 ROCE including capital gain was 50.4%

  17. service

  18. Service: Q3/2010 orders and net salesOrders: 152.4 (124.5) MEUR, +22.4% | Net sales: 173.2 (157.6) MEUR, +9.9% • New orders grew in all regions and business units

  19. Service: Q3/2010 ebit and marginebit: 14.6 (13.9) meur | margin: 8.4% (8.8%), excluding restructuring costs • Streamlining costs of EUR 1.5 million in Q3/10

  20. service contract base September 30, 2010377 (371) thousand units, +1.6% |annual value 146.6 (122.6) MEUR, +19.6%

  21. service order book September 30, 2010111.7 (88.1) MEUR, +26.8%

  22. EQUIPMENT

  23. Equipment: Q3/2010 orders and net salesOrders: 240.0 (205.9) MEUR, +16.5% | Net sales: 252.6 (233.5) MEUR, +8.2% • Order intake rose in EMEA and APAC, but fell in the Americas due to low port crane orders • New orders increased in all business units except Port Cranes

  24. Equipment: Q3/2010 ebit and marginebit: 22.0 (14.0) meur | margin: 8.7% (6.0%), excluding restructuring costs • EBIT margin improved due to higher volume, cost savings, sales mix and currencies

  25. equipment order book September 30, 2010585.6 (565.6) meur, +3.5%

  26. Balance sheet and cash flow

  27. Q3/2010 net working capital183.3 (211.1) MEUR | 12.2% (11.2%) of sales

  28. Cash flow before financing activities 181.8 179.1 110.3 70.2 44.1 35.4 36.2 MEUR capex on acquisitions and investments in associated companies 16.6 6.9 2.3 -30.4 -28.6

  29. Q3/2010 gearingEquity: 415.7 (389.1) MEUR | Net debt: 0.7 (-14.9) MEUR | Gearing: 0.2% (-3.8%)

  30. appendixes

  31. Statement of income

  32. Balance sheet

  33. Cash flow statement

  34. Key figures

  35. The largest shareholders Market cap > EUR 1 billion 46.1% *) 36.1% *) According to the flagging notification on September 8, 2010 BlackRock Inc. holds 6,271,713 (10.2%) Konecranes shares. 13.2% 4.6% • Trading information • Listing: NASDAX OMX Helsinki • Date of listing: March 27, 1996 • Segment: Large Cap • Sector: Industrials • Trading code: KCR1V • 1-9/10 average daily trading volume 379,831 shares, EUR 8.6 million

  36. Contact information Pekka Lundmark, President and CEOTel. +358 (0)20 427 2000 pekka.lundmark@konecranes.com Teo Ottola, Chief Financial OfficerTel.+358 (0)20 427 2040 teo.ottola@konecranes.com Miikka Kinnunen, Director, Investor Relations Tel. +358 (0)20 427 2050 miikka.kinnunen@konecranes.com Anna-Mari Kautto, Assistant, Investor Relations Tel. +358 (0)20 427 2960anna-mari.kautto@konecranes.com www.konecranes.com

  37. Thank you!

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