Q3 2010 interim report
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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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Q3 2010 interim report

Q3 2010interim report

October 21,2010

Pekka Lundmark, President and CEO

Teo Ottola, CFO


Highlights of q3 10

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


Capacity utilization eu27 and usa

Capacity utilization: eu27 and usa

SOURCES: Eurostat, Federal Reserve Bank of St. Louis


Container traffic

Container traffic

Annual container handling volume

Monthly container handling volume

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


Market outlook and financial guidance as of oct 21 2010

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


Combination of organic and acquisitive growth

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


Acquisitions in 2010

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


Acquisition of indian wmi cranes

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


Q3 2010 group orders and net sales orders 373 4 308 5 meur 21 0 net sales 393 6 368 7 meur 6 8

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


Q3 2010 group ebit margin ebit 34 3 24 0 meur 42 5 margin 8 7 6 5 excluding restructuring costs

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


1 9 2010 group orders received 1 058 3 987 7 meur 7 1

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


Group order book september 30 2010 679 7 638 4 meur 6 5

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


1 9 2010 group net sales 1 076 9 1 242 4 meur 13 3

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


1 9 2010 group ebit margin ebit 69 2 91 6 meur margin 6 4 7 4 excluding restructuring costs

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


Sales split by business area and region r12m

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)


Return on capital employed

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%


Service

service


Service q3 2010 orders and net sales orders 152 4 124 5 meur 22 4 net sales 173 2 157 6 meur 9 9

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


Service q3 2010 ebit and margin ebit 14 6 13 9 meur margin 8 4 8 8 excluding restructuring costs

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


Q3 2010 interim report

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


Service order book september 30 2010 111 7 88 1 meur 26 8

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


Equipment

EQUIPMENT


Equipment q3 2010 orders and net sales orders 240 0 205 9 meur 16 5 net sales 252 6 233 5 meur 8 2

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


Equipment q3 2010 ebit and margin ebit 22 0 14 0 meur margin 8 7 6 0 excluding restructuring costs

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


Equipment order book september 30 2010 585 6 565 6 meur 3 5

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


Balance sheet and cash flow

Balance sheet and cash flow


Q3 2010 net working capital 183 3 211 1 meur 12 2 11 2 of sales

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


Cash flow before financing activities

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


Q3 2010 gearing equity 415 7 389 1 meur net debt 0 7 14 9 meur gearing 0 2 3 8

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


Appendixes

appendixes


Statement of income

Statement of income


Balance sheet

Balance sheet


Cash flow statement

Cash flow statement


Key figures

Key figures


The largest shareholders

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


Contact information

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 Relations

Tel. +358 (0)20 427 2050

[email protected]

Anna-Mari Kautto, Assistant,

Investor Relations

Tel. +358 (0)20 427 [email protected]

www.konecranes.com


Thank you

Thank you!


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