KONECRANES PLC FINANCIAL STATEMENTS BULLETIN February 8, 2017 at 9:00 a.m.
ADJUSTED OPERATING PROFIT IMPROVED, FOURTH QUARTER ORDER INTAKE STRONG
This release is a summary of Konecranes Plc’s financial statements bulletin 2016. The complete report is attached to this release in pdf format and is also available on Konecranes’ website at www.konecranes.com .
Figures in brackets, unless otherwise stated, refer to the same period a year earlier. Figures are unaudited.
FOURTH QUARTER HIGHLIGHTS
- Order intake EUR 595.1 million (512.5), +16.1 percent - Order book EUR 1,038.0 million (1,036.5) at year-end, +0.1 percent - Sales EUR 613.3 million (609.0), +0.7 percent - Adjusted operating profit* EUR 52.1 million (44.6), 8.5 percent (7.3) of sales. - Adjustments* EUR -21.2 million (-13.8). - Operating profit EUR 31.0 million (30.8), 5.0 percent of sales (5.1). - Earnings per share (diluted) EUR 0.18 (0.21). - Net cash flow from operating activities EUR 62.1 million (40.9). - Net debt EUR 129.6 million (203.2) and gearing 29.1 percent (44.6).
FULL-YEAR 2016 HIGHLIGHTS
- Orders received EUR 1,920.7 million (1,965.5), -2.3 percent - Sales EUR 2,118.4 million (2,126.2), -0.4 percent - Adjusted operating profit* EUR 140.8 million (117.7), 6.6 percent (5.5) of sales - Adjustments* EUR -55.9 million (-54.7) - Operating profit EUR 84.9 million (63.0), 4.0 percent of sales (3.0) - Earnings per share (diluted) EUR 0.64 (0.53) - Net cash flow from operating activities EUR 109.6 million (39.3) - Dividend proposed by the Board of Directors is EUR 1.05 (1.05) per share
*Adjustments (corresponding to term non-recurring items in 2015) include restructuring costs, transaction costs related to the terminated merger plan with Terex Corporation, and acquisition of Terex’s MHPS business and related activities, unwarranted payments due to identity theft and fraudulent actions (in the third quarter of 2015), and insurance indemnity and returned funds related to identity theft and fraudulent actions (in the second and third quarter of 2016). Konecranes’ management believes that the adjusted operating profit is relevant to understanding the comparable financial performance when comparing the result for the current period with the previous periods.
MARKET OUTLOOK
Customers are cautious about investing due to modest volume growth in manufacturing and process industries, as well as container handling. The companies operating in emerging and commodity markets are particularly under pressure to save costs. The demand situation in Europe and North America is mixed. Low growth in global container throughput has led to a slow decision-making among container terminal operators. The quarterly Equipment order intake may fluctuate due to the timing of the large port crane projects.
FINANCIAL GUIDANCE
Due to the very recent acquisition of the Terex‘s MHPS business, Konecranes believes that it is not appropriate to provide financial guidance for the new combined business at the present time and intends to provide financial guidance in conjunction with its Interim Report January-March 2017.
| KEY FIGURES | Fourth quarter | January - December | ||||
| 10-12/ 2016 | 10-12/ 2015 | Change % | 1-12/ 2016 | 1-12/ 2015 | Change % | |
| Orders received, MEUR | 595.1 | 512.5 | 16.1 | 1,920.7 | 1,965.5 | -2.3 |
| Order book at end of period, MEUR | 1,038.0 | 1,036.5 | 0.1 | |||
| Sales t otal, MEUR | 613.3 | 609.0 | 0.7 | 2,118.4 | 2,126.2 | -0.4 |
| Adjusted EBITDA, MEUR *) | 64.8 | 57.0 | 13.7 | 191.6 | 166.5 | 15.1 |
| Adjusted EBITDA, % *) | 10.6% | 9.4% | 9.0% | 7.8% | ||
| Adjusted operating profit, MEUR *) | 52.1 | 44.6 | 17.0 | 140.8 | 117.7 | 19.6 |
| Adjusted operating margin, % *) | 8.5% | 7.3% | 6.6% | 5.5% | ||
| EBITDA, MEUR | 43.6 | 42.7 | 2.2 | 138.5 | 117.1 | 18.3 |
| EBITDA, % | 7.1% | 7.0% | 6.5% | 5.5% | ||
| Operating profit, MEUR | 31.0 | 30.8 | 0.5 | 84.9 | 63.0 | 34.6 |
| Operating margin, % | 5.0% | 5.1% | 4.0% | 3.0% | ||
| Profit before taxes, MEUR | 25.4 | 28.6 | -11.2 | 62.1 | 55.4 | 12.1 |
| Net profit for the period, MEUR | 10.8 | 12.6 | -13.9 | 37.6 | 30.8 | 22.1 |
| Earnings per share, basic, EUR | 0.18 | 0.21 | -14.1 | 0.64 | 0.53 | 21.7 |
| Earnings per share, diluted, EUR | 0.18 | 0.21 | -14.1 | 0.64 | 0.53 | 21.7 |
| Dividend per share | 1.05** | 1.05 | ||||
| Gearing, % | 29.1% | 44.6% | ||||
| Return on capital employed % | 10.3% | 9.5% | ||||
| Free cash flow, MEUR | 54.1 | 24.8 | 83.9 | -1.4 | ||
| Average number of personnel during the period | 11,398 | 11,934 | -4.5 | |||
*Adjustments (corresponding term non-recurring items in 2015) include restructuring costs, transaction costs related to the terminated merger plan with Terex and the acquisition of Terex MHPS and related activities, unwarranted payments due to identity theft and fraudulent actions (in the third quarter of 2015), and insurance indemnity and returned funds related to identity theft and fraudulent actions (in the second and third quarter of 2016). **The Board’s proposal to the AGM
President and CEO Panu Routila:
“We had a satisfactory performance in 2016. This makes us well-prepared for the integration of the MHPS business that was acquired in early 2017. Group order intake grew by 16.1 percent, sales by 0.7 percent, and adjusted EBIT by 17.0 percent in the fourth quarter. Cash flow strengthened toward the year-end 2016, which lowered gearing to 29 percent.
The profitability improvement, despite the lack of volume growth, demonstrates that our actions to cut manufacturing capacity and the introduction of a new operating model based on direct product line organization and P&L responsibilities have improved our competitiveness. These factors and streamlining of the middle management meant cost savings of more than EUR 30 million in 2016, which is visible in lower fixed costs.
While the fourth quarter order intake was the highest of the year, it also reflects continued challenging market conditions. The highlight of the quarter were the orders from the Virginia Port Authority for 86 automated stacking cranes valued more than EUR 200 million. This was the largest deal in the history of Konecranes. With deliveries extending to 2020, it gives a good base load for our port cranes business.
Service has prioritized efficiency over growth. Our restructuring actions in a weak market, particularly among industrial customers in the Americas, held back growth in 2016. Furthermore, low investment levels within process industries and commodity sectors weighed on the demand for industrial cranes and components. Likewise, weak growth in container throughput and a focus on M&A has affected terminal operators’ appetite for capacity expansions. Our comparable order book the for current year’s deliveries is therefore lower than was the corresponding situation a year ago. From this perspective, the recent strengthening of the Purchasing Managers’ Indexes and return to growth in container traffic is welcome development.
Our acquisition of Terex Corporation’s MHPS business was closed on January 4, 2017. We are extremely proud to combine forces with MHPS. We want to provide a home for Demag and Port Solutions, from which these businesses can grow and become stronger as part of our joint organization. The sound industrial logic of the MHPS acquisition makes it possible for us to realize a long list of synergies. Based on the initiated integration work, we continue to be confident on the targeted synergies of EUR 140 million p.a. within three years, of which EUR 35 million is expected to be implemented by the end of 2017.”
BOARD OF DIRECTORS’ PROPOSAL FOR DISPOSAL OF DISTRIBUTABLE FUNDS
The parent company’s non-restricted equity is EUR 258,938,606.48, of which the net income for the year is EUR 43,570,310.23. The Group’s non-restricted equity is EUR 361,016,000.
According to the Finnish Companies Act, the distributable funds of the company are calculated based on the parent company’s non-restricted equity. For the purpose of determining the amount of the dividend, the Board of Directors has assessed the liquidity of the parent company and the economic circumstances subsequent to the end of fiscal year.
Based on such assessments, the Board of Directors proposes to the Annual General Meeting that a dividend of EUR 1.05 be paid on each share and that the remaining non-restricted equity is retained in shareholders’ equity.
A PDF version of the Konecranes’ full audited financial statements, including the report of the Board of Directors, and corporate governance statement will be available on the web on February 27, 2017, and the printed version during the week commencing on Monday March 13, 2017.
ANALYST AND PRESS BRIEFING
An analyst and press conference will be held at HTC Keilaniemi (note new location, address Keilaranta 15 B, Espoo) at 11.00 a.m. Finnish time. The financial result for 2016 will be presented by 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 on January 12, 2017 for the conference call details.
KONECRANES PLC
Miikka Kinnunen Vice 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 Miikka Kinnunen, Vice President, Investor Relations, tel. +358 20 427 2050 Mr Mikael Wegmüller, Vice President, Marketing and Communications, tel. +358 20 427 2008
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. The Group has 18,000 employees at 600 locations in 50 countries. Konecranes class A share is listed on the Nasdaq Helsinki (symbol: KCR).
DISTRIBUTION Nasdaq Helsinki Media www.konecranes.com
