KONECRANES PLC HALF-YEAR FINANCIAL REPORT JANUARY-JUNE 2021 JULY 28, 2021 8:30
am EEST
Konecranes Plc: Half-year financial report January-June 2021
Strong orders and fourth consecutive quarterly adjusted EBITA-% record
This release is a summary of Konecranes Plc’s Half-year financial report January
-June 2021. The complete report is attached to this release in pdf format and is
also available on Konecranes’ website at www.konecranes.com.
The figures presented in this report are unaudited. Figures in brackets, unless
otherwise stated, refer to the same period a year earlier.
SECOND QUARTER HIGHLIGHTS
- Order intake EUR 806.7 million (581.5), +38.7 percent (+41.1 percent on a
comparable currency basis), driven by order intake increases in all three
Business Areas
- Service annual agreement base value stayed approximately the same (0.0 percent
in reported currencies) but increased 1.2 percent on a comparable currency basis
to EUR 282.8 million (282.9). Service order intake was EUR 257.5 million
(209.1), +23.1 percent (+26.2 percent on a comparable currency basis)
- Order book EUR 1,974.8 million (1,904.5) at the end of June, +3.7 percent
(+4.8 percent on a comparable currency basis)
- Sales EUR 759.3 million (704.7), +7.7 percent (+10.0 percent on a comparable
currency basis), sales increased in Business Areas Service and Port Solutions
but decreased in Industrial Equipment
- Adjusted EBITA margin 8.6 percent (8.2) and adjusted EBITA EUR 65.3 million
(57.5); the increase was driven by higher sales as well as continued focus on
strategic initiatives
- Operating profit EUR 46.6 million (42.7), 6.1 percent of sales (6.1),
restructuring and transaction costs totaled EUR 10.4 million (5.9)
- Earnings per share (diluted) EUR 0.36 (0.38)
- Free cash flow EUR 15.4 million (53.7)
JANUARY-JUNE 2021 HIGHLIGHTS
- Order intake EUR 1,569.5 million (1,318.5), +19.0 percent (+21.8 percent on a
comparable currency basis)
- Service order intake EUR 512.7 million (475.2), +7.9 percent (+11.7 percent on
a comparable currency basis)
- Sales EUR 1,463.3 million (1,474.2), -0.7 percent (+1.7 percent on a
comparable currency basis)
- Adjusted EBITA margin 8.3 percent (5.3) and adjusted EBITA EUR 121.6 million
(78.6); the adjusted EBITA margin improved in all three Business Areas
- Operating profit EUR 84.1 million (50.5), 5.8 percent of sales (3.4),
restructuring and transaction costs totaled EUR 20.7 million (10.1)
- Earnings per share (diluted) EUR 0.59 (0.53)
- Free cash flow EUR 33.0 million (107.5)
- Net debt EUR 624.4 million (770.2) and gearing 50.6 percent (62.8)
THIRD QUARTER DEMAND OUTLOOK
The worldwide demand picture remains subject to volatility due to the COVID-19
pandemic.
In Europe, the current demand environment within the industrial customer
segments has reached the pre-COVID-19 level, while in North America the demand
environment is still behind the pre-COVID-19 level. In Asia-Pacific, the demand
environment remains below the pre-COVID-19 level outside China.
Global container throughput continues to be at a record high, and long-term
prospects related to global container handling remain good overall.
FINANCIAL GUIDANCE
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.
KEY FIGURES
[][][][][][][][]
Second January
quarter - June
4-6/ 4-6/ Change% 1-6/ 1-6/ Change% R12M 1-12/
2021 2020 2021 2020 2020
Orders 806.7 581.5 38.7 1,569.5 1,318.5 19.0 2,978.3 2,727.3
received,
MEUR
Order book 1,974.8 1,904.5 3.7 1,715.5
at end of
period,
MEUR
Sales 759.3 704.7 7.7 1,463.3 1,474.2 -0.7 3,168.0 3,178.9
total, MEUR
Adjusted 86.5 83.0 4.1 165.5 129.0 28.3 393.2 356.7
EBITDA,
MEUR
[1]
Adjusted 11.4% 11.8% 11.3% 8.8% 12.4% 11.2%
EBITDA, %
[1]
Adjusted 65.3 57.5 13.5 121.6 78.6 54.7 303.8 260.8
EBITA, MEUR
[2]
Adjusted 8.6% 8.2% 8.3% 5.3% 9.6% 8.2%
EBITA, %
[2]
Adjusted 57.0 48.5 17.5 104.8 60.6 72.9 269.1 224.9
operating
profit,
MEUR [1]
Adjusted 7.5% 6.9% 7.2% 4.1% 8.5% 7.1%
operating
margin, %
[1]
Operating 46.6 42.7 9.3 84.1 50.5 66.8 207.5 173.8
profit,
MEUR
Operating 6.1% 6.1% 5.8% 3.4% 6.5% 5.5%
margin, %
Profit 41.1 42.4 -3.0 67.8 58.5 15.9 179.6 170.3
before
taxes,
MEUR
Net profit 28.4 30.3 -6.3 46.8 41.8 11.8 127.8 122.9
for the
period,
MEUR
Earnings 0.36 0.38 -6.6 0.59 0.53 11.4 1.60 1.54
per share,
basic, EUR
Earnings 0.36 0.38 -6.6 0.59 0.53 11.4 1.60 1.54
per share,
diluted,
EUR
Interest 50.6% 62.8% 46.1%
-bearing
net
debt /
Equity, %
Net debt / 1.6 2.3 1.6
Adjusted
EBITDA,
R12M [1]
Return on 8.8% 8.3%
capital
employed, %
Adjusted 13.0% 11.1%
return on
capital
employed, %
[3]
Free cash 15.4 53.7 33.0 107.5 291.6 366.1
flow, MEUR
Average 16,670 17,105 -2.5 17,027
number of
personnel
during the
period
1) Excluding adjustments, see also note 10 in the summary financial statements
2) Excluding adjustments and purchase price allocation amortization, see also
note 10 in the summary financial statements
3) ROCE excluding adjustments, see also note 10 in the summary financial
statements
PRESIDENT AND CEO ROB SMITH:
Konecranes reported its fourth consecutive quarter of record profitability,
powered by solid sales growth and high performance across the whole
organization. Strong first-half orders, especially in our short-cycle products,
together with continuing traction from strategic initiatives give us good
momentum for the latter half of the year.
Overall market sentiment continued to improve in Q2 compared to the previous
quarters, though COVID-19 related market volatility is not over. Activity
remained high in the port sector and continued to improve with our industrial
customers, and at end-June our order book was at a record high. Sequentially,
orders received in the quarter increased by over EUR 43 million and totaled EUR
806.7 million. Year-on-year, Konecranes’ Q2 order intake grew 41.1% in
comparable currencies, as last year’s Q2 marked the peak of the COVID-19
pandemic and lockdowns from a global perspective. We saw once again good order
growth in our short-cycle products.
Component availability and other supply chain constrains continued to affect
sales in Q2, with a quarterly impact of approximately EUR 35 million. However,
sales still grew by 10.0% year-on-year in comparable currencies and increased in
Port Solutions and Service but remained at the previous year’s level in
Industrial Equipment. As a result, and in line with our expectations for the
full year, H1 sales exceeded last year’s H1 sales in comparable currencies and
were 0.7% behind last year’s level in reported currencies.
Our Q2 adjusted EBITA margin was 8.6%, marking the fourth quarter in row with an
all-time high adjusted EBITA margin for the quarter in question. This is an
excellent achievement given the pandemic is still disrupting many countries, and
there are global component and other supply chain issues. I would like to thank
our employees for their hard work, and our suppliers and customers for their
close collaboration during the quarter.
COVID-19 and the global component shortage are not the only events recently
impacting our operations. Two weeks ago, one of our biggest factories, Wetter,
was affected by the flooding catastrophe in Germany. While no employees were
injured, there was some physical damage at the site, and we expect to close the
production gap within a month. We have many employees living in the region, and
our thoughts and sympathies are with them, their family members and communities.
As for our Q2 performance by each business, Service order intake improved by
26.2% year-on-year in comparable currencies, and orders grew in all three
regions. Despite year-on-year sales growth, component shortages and logistics
delays impacted Service sales and also the sales mix, and as a result, the
adjusted EBITA margin was 16.8%, a decrease of 0.4 percentage points versus a
year ago. The agreement base value grew by 1.2% from the previous year in
comparable currencies, continuing to demonstrate the resiliency of our Service
growth engine during the pandemic.
Industrial Equipment’s external order intake grew by 48.4% in comparable
currencies. Net sales were impacted by supply chain constrains resulting from
COVID-19, component shortages and logistics delays. The good profitability
trajectory continued: Industrial Equipment’s adjusted EBITA margin was 2.1%,
improving by 0.4 percentage points from the previous year, mainly driven by the
favorable sales mix as well as continued good progress with our strategic
initiatives, especially in the process crane business.
In Port Solutions, the previous quarters’ good order momentum continued, and
order intake grew 47.9% from the previous year in comparable currencies. Lift
Trucks, Straddle Carriers, Solutions and Port Service had a strong order intake.
Port Solutions’ adjusted EBITA margin increased by 0.7 percentage points to
7.1%, driven by higher sales and our project management excellence initiative.
While we expect market volatility to continue due to the pandemic, we have
updated our demand outlook for Q3 to reflect the current market sentiment. We
reiterate our full-year guidance for 2021 despite the supply chain challenges
which impacted net sales in H1 and continue to impact operations in Q3. We
expect to overcome these challenges, with net sales to increase in full-year
2021 compared to 2020, and given our performance track record and the ongoing
positive impact of our strategic initiatives, we expect our full-year adjusted
EBITA margin to improve from 2020.
Our announced merger with Cargotec is progressing well – merger control filings
and integration planning teams are making good headway. In the beginning of July
the European Commission opened a Phase II merger control review, which is a
common step for sizeable global transactions. Shortly after that, the UK
Competition and Markets Authority (CMA) referred the planned merger for a Phase
II investigation under its fast track procedure. Phase II will enable the
European Commission and the CMA to consider the merger in further detail, and
Konecranes and Cargotec continue to closely cooperate with all relevant
authorities to demonstrate the rationale of the planned merger. Both companies
continue to operate fully separately and independently until all merger closing
conditions are met and the deal is completed.
The merger is fully aligned with Konecranes’ strategic plans and growth
ambitions, and we are confident that the merger will be completed by the end of
H1 2022. Together with Cargotec we will create a global leader in sustainable
material flow.
ANALYST AND PRESS BRIEFING
A live international webcast for analysts, investors and media will be held on
July 28, 2021, at 10:30 a.m. EEST. The half-year financial report will be
presented by Konecranes’ President and CEO Rob Smith and CFO Teo Ottola.
Please see the press release dated July 14, 2021 for the conference call
details.
NEXT REPORT
Konecranes Plc plans to publish Interim report January-September 2021 on October
28, 2021.
KONECRANES PLC
Kiira Fröberg
Vice President, Investor Relations
FURTHER INFORMATION
Kiira Fröberg,
Vice President, Investor Relations,
tel. +358 (0) 20 427 2050
IMPORTANT NOTICE
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 16,500 employees in 50
countries. Konecranes shares are listed on the Nasdaq Helsinki (symbol: KCR).
DISTRIBUTION
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www.konecranes.com