q2: strong growth and margin improvement continues
DESCRIPTION
Q2: STRONG GROWTH AND MARGIN IMPROVEMENT CONTINUES. 3 August, 2006 Pekka Lundmark, President & CEO. Orders Received. Meur. 4. 0. 0. 3. 5. 0. 3. 0. 0. 2. 5. 0. 2. 0. 0. 1. 5. 0. 1. 0. 0. 5. 0. 0. Q2/04. Q2/02. Q3/02. Q4/02. Q1/03. Q2/03. Q3/03. Q4/03. Q1/04. - PowerPoint PPT PresentationTRANSCRIPT
Results Q2/2006 1
Q2: STRONG GROWTHAND MARGIN IMPROVEMENTCONTINUES3 August, 2006Pekka Lundmark, President & CEO
Results Q2/2006 3
Orders Received
0
50
100
150
200
250
300
350
400
Q1/02
Q2/02
Q3/02
Q4/02
Q1/03
Q2/03
Q3/03
Q4/03
Q1/04
Q2/04
Q3/04
Q4/04
Q1/05
Q2/05
Q3/05
Q4/05
Q1/06
Q2/06
Meur
Results Q2/2006 5
Maintenance Services Special CranesStandard Lifting Equipment
Order Book by Business Area
0
100
200
300
400
500
600
700
Q1/05 Q2/05 Q3/05 Q4/05 Q1/06 Q2/06
MEUR
Results Q2/2006 6
• Pierre Boyer (46), graduate from HEC, France
• President, Region EMEA and member of the KCI KonecranesExecutive Board effective 1 Sept, 2006
• Currently head of Carrier Corporation’s Refrigeration operations in the Nordic, Netherlands and EMEA areas
New President, Region EMEA Appointed
Results Q2/2006 7
New Director, Marketing & Communications Appointed
• Michael Wegmüller (40), M.Sc. (Econ.)
• Director, Marketing & Communications and member of the Konecranes Executive Board effective 18 Sept, 2006
• Currently Chief Operating Officer at Publicis Helsinki
Results Q2/2006 8
• Paul Lönnfors (43), B.Sc. (Econ.)
• Investor Relations Manager effective as of 1 Sept, 2006
• Currently Communications & IR Manager at KONE Corporation
New Investor Relations Manager Appointed
Results Q2/2006 9
• MMH figures included into KCI Konecranes for 1 month• MMH Sales FY October 2005 apprx. 140 MEUR• Debt-free acquisition price apprx. 56 MEUR• Expected sales in June-December 2006 apprx. 90 MEUR,
EBITDA margin expected at 8% and EBIT margin at 6% • Expected positive EPS effect in 2006 of EUR 0.03,
annualised the effect before synergies is EUR 0.06 • Employs apprx. 990 people• Leading P&H brand name • Complementary product offering • Large installed base to boost Maintenance Services in North
America• Local presence in USA, Canada, Mexico and Chile
Acquisition of MMH Holdings, Inc.
Results Q2/2006 10
Coil Handling Crane Nuclear Dome CraneHot Metal Ladle Crane
Acquisition of MMH Holdings, Inc. Complements the Offering
• Good position in Steel, Nuclear Power and Wood Handling
Results Q2/2006 11
* 2004 - 2005 according to IFRS
0
50
100
150
200
250
300
350
400
Q1/02
Q2/02
Q3/02
Q4/02
Q1/03
Q2/03
Q3/03
Q4/03
Q1/04
Q2/04
Q3/04
Q4/04
Q1/05
Q2/05
Q3/05
Q4/05
Q1/06
Q2/06
MEUR
Net Sales
Results Q2/2006 12
EBIT
EBIT Margin
* 2004 - 2005 according to IFRS
0
5
10
15
20
25
Q1/02
Q2/02
Q3/02
Q4/02
Q1/03
Q2/03
Q3/03
Q4/03
Q1/04
Q2/04
Q3/04
Q4/04
Q1/05
Q2/05
Q3/05
Q4/05
Q1/06
Q2/06
MEUR
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
Operating Profit and Margin
Results Q2/2006 13
LTM Sales
LTM EBIT Margin
0
200
400
600
800
1000
1200
1400
Q1/02
Q2/02
Q3/02
Q4/02
Q1/03
Q2/03
Q3/03
Q4/03
Q1/04
Q2/04
Q3/04
Q4/04
Q1/05
Q2/05
Q3/05
Q4/05
Q1/06
Q2/06
MEUR
0%
1%
2%
3%
4%
5%
6%
7%
8%
LTM Sales and Operating Margin
Results Q2/2006 14
Note: Sales numbers include internal sales
Service Heavy Lifting
Standard Lifting
31
3039
31
34 35
LTM 2005
Sales Split by Business Area, %
Results Q2/2006 15
30
1820
32
LTM
29
1822
31
2005
Americas
Asia-Pacific
EU (w/o Nordic)
Nordic & Eastern Europe
Sales by Market Area, %
Results Q2/2006 16
OEM crane builders 4 %
Others 5 %
Pulp and paper 5 %
Power plants 4 %
Steel & other warehousing 3 %
General Manufacturing 21 %
1 %RefuseHandling
Automotive 3 %
Primary metals 16 %
Shipyards 3 %
Resellers 10 %
Petrochemical 3 %
Construction 2 %
Transport, Shipping 6 %
Harbours 13 %
Aviation, Aerospace 1 %
LTM
Sales by Industry LTM, %
Results Q2/2006 17
Sales by Industry LTM, %
Results Q2/2006 18
* 2005-2005 according to IFRS
0
20
40
60
80
100
120
Q1/02
Q2/02
Q3/02
Q4/02
Q1/03
Q2/03
Q3/03
Q4/03
Q1/04
Q2/04
Q3/04
Q4/04
Q1/05
Q2/05
Q3/05
Q4/05
Q1/06
Q2/06
MEUR
Maintenance Services Orders
Results Q2/2006 19
0
50,000
100,000
150,000
200,000
250,000
300,000
1999 2000 2001 2002 2003 2004 2005 Q2/06
0
10
20
30
40
50
60
70
80
90
MEURNumber of Cranes Value
Growth in Maintenance Contract Base
Results Q2/2006 20
* 2004 - 2005 according to IFRS
0
20
40
60
80
100
120
140
Q1/02
Q2/02
Q3/02
Q4/02
Q1/03
Q2/03
Q3/03
Q4/03
Q1/04
Q2/04
Q3/04
Q4/04
Q1/05
Q2/05
Q3/05
Q4/05
Q1/06
Q2/06
MEUR
Maintenance Sales
Results Q2/2006 21
EBIT
EBIT Margin
* 2004 - 2005 according to IFRS
0
2
4
6
8
10
12
Q1/02
Q2/02
Q3/02
Q4/02
Q1/03
Q2/03
Q3/03
Q4/03
Q1/04
Q2/04
Q3/04
Q4/04
Q1/05
Q2/05
Q3/05
Q4/05
Q1/06
Q2/06
MEUR
0%
2%
4%
6%
8%
10%
12%
Maintenance Operating Profit and Margin
Results Q2/2006 22
LTM Sales
LTM EBIT Margin
0
50
100
150
200
250
300
350
400
450
500
Q1/02
Q2/02
Q3/02
Q4/02
Q1/03
Q2/03
Q3/03
Q4/03
Q1/04
Q2/04
Q3/04
Q4/04
Q1/05
Q2/05
Q3/05
Q4/05
Q1/06
Q2/06
MEUR
0
1
2
3
4
5
6
7
8
9
%
Maintenance LTM Sales and Operating Margin
Results Q2/2006 23
Standard Lifting Equipment Orders
0
20
40
60
80
100
120
140
160
180
Q1/
02
Q2/
02
Q3/
02
Q4/
02
Q1/
03
Q2/
03
Q3/
03
Q4/
03
Q1/
04
Q2/
04
Q3/
04
Q4/
04
Q1/
05
Q2/
05
Q3/
05
Q4/
05
Q1/
06
Q2/
06
MEUR
Results Q2/2006 24
0
20
40
60
80
100
120
140
160
Q1/
02
Q2/
02
Q3/
02
Q4/
02
Q1/
03
Q2/
03
Q3/
03
Q4/
03
Q1/
04
Q2/
04
Q3/
04
Q4/
04
Q1/
05
Q2/
05
Q3/
05
Q4/
05
Q1/
06
Q2/
06
MEUR
Standard Lifting Equipment Sales
Results Q2/2006 25
EBIT
EBIT Margin
* 2004 - 2005 according to IFRS
0
2
4
6
8
10
12
14
16
Q1/
02
Q2/
02
Q3/
02
Q4/
02
Q1/
03
Q2/
03
Q3/
03
Q4/
03
Q1/
04
Q2/
04
Q3/
04
Q4/
04
Q1/
05
Q2/
05
Q3/
05
Q4/
05
Q1/
06
Q2/
06
MEUR
0%
2%
4%
6%
8%
10%
12%
Standard Lifting Operating Profit and Margin
Results Q2/2006 26
LTM Sales
LTM EBIT Margin
100
150
200
250
300
350
400
450
500
Q1/
02
Q2/
02
Q3/
02
Q4/
02
Q1/
03
Q2/
03
Q3/
03
Q4/
03
Q1/
04
Q2/
04
Q3/
04
Q4/
04
Q1/
05
Q2/
05
Q3/
05
Q4/
05
Q1/
06
Q2/
06
MEUR
0123456789101112
%
Standard Lifting LTM Sales and Operating Margin
Results Q2/2006 27
0
20
40
60
80
100
120
140
160
Q1/02
Q2/02
Q3/02
Q4/02
Q1/03
Q2/03
Q3/03
Q4/03
Q1/04
Q2/04
Q3/04
Q4/04
Q1/05
Q2/05
Q3/05
Q4/05
Q1/06
Q2/06
MEUR
Special Cranes Orders
Results Q2/2006 29
0
20
40
60
80
100
120
Q1/02
Q2/02
Q3/02
Q4/02
Q1/03
Q2/03
Q3/03
Q4/03
Q1/04
Q2/04
Q3/04
Q4/04
Q1/05
Q2/05
Q3/05
Q4/05
Q1/06
Q2/06
MEUR
Special Cranes Sales
Results Q2/2006 30
* 2004 - 2005 according to IFRS
0
1
2
3
4
5
6
7
8
9
Q1/02
Q2/02
Q3/02
Q4/02
Q1/03
Q2/03
Q3/03
Q4/03
Q1/04
Q2/04
Q3/04
Q4/04
Q1/05
Q2/05
Q3/05
Q4/05
Q1/06
Q2/06
MEUR
0%
2%
4%
6%
8%
10%
12%
14%
EBIT
EBIT Margin
Special Cranes Operating Profit and Margin
Results Q2/2006 31
0
50
100
150
200
250
300
350
400
450
Q1/02
Q2/02
Q3/02
Q4/02
Q1/03
Q2/03
Q3/03
Q4/03
Q1/04
Q2/04
Q3/04
Q4/04
Q1/05
Q2/05
Q3/05
Q4/05
Q1/06
Q2/06
MEUR
0
1
2
3
4
5
6
7
8
9
10
%LTM Sales
LTM EBIT Margin
Special Cranes LTM Sales and Operating Margin
Results Q2/2006 32
24,6
18,4
24,1
-0,6
6,7
20,7
-5
-1
3
7
11
15
19
23
2002 2003 2004 2005 1-6/05 1-6/06
MEUR
Net Income
Results Q2/2006 33
17.8
10.8
13.7
17.2
22.6
0
4
8
12
16
20
24
2002 2003 2004 2005 LTM
ROCE %
Return on Capital Employed
Results Q2/2006 34
14.2
7.5
12.5
16.6
30.2
0
4
8
12
16
20
24
28
32
2002 2003 2004 2005 LTM
ROE %
Return on Equity
Results Q2/2006 35
Guidance Full Year 2006
• At the moment we see no signs of slowing demand. • Full year sales growth is expected to be 40-45 %.• The positive margin development is expected to continue.
Results Q2/2006 37
1-6/2006MEUR
1-6/2005MEUR
1-12/2005MEUR
Sales 636.6 427.4 970.8
Other operating income 0.9 1.2 2.2
Depreciation -9.9 -7.3 -15.6
Other operating expenses -592.6 -407.4 -908.1
Operating income (EBIT) 35.0 13.9 49.3
Share of result of associated companies and joint ventures
0.3 0.2 0.5
Financial income and expenses -5.8 -15.0 -15.8
Income before taxes 29.5 -0.9 34.1
Taxes -8.9* 0.3* -10.0
Net income 20.7 -0.6 24.1
Earnings per share, basic (EUR) 0.36 -0.01 0.43
Earnings per share, diluted (EUR) 0.35 -0.01 0.42
* According to estimated tax rate
Statement of Income
Results Q2/2006 38
6/2006MEUR
6/2005MEUR
12/2005MEUR
Non-current assets 218.3 134.0 197.6
Inventories 218.6 152.1 157.0
Receivables and other current assets
354.5 230.6 325.4
Cash and cash equivalents 40.9 31.1 44.0
Total assets 832.3 547.8 724.0
Equity 173.3 127.1 152.1
Non-current liabilities 173.5 56.9 106.9
Provisions 20.8 15.8 20.1
Current liabilities 464.7 348.0 444.9
Total equity and liabilities 832.3 547.8 724.0
Gearing % 102.1 91.3 88.1
Solidity % 24.1 26.5 23.7
Equity/share, EUR 2.95 2.25 2.66
Balance Sheet
Results Q2/2006 39
MEUR 1-6/2006 1-6/2005
Operating income before change in net working capital 44.8 21.3
Change in net working capital -6.6 3.4
Cash flow from operations before financing items and taxes 38.2 24.7
Financing items and taxes -12.1 -8.3
Net cash flow from operating activities 26.1 16.5
Net cash used in investing activities -56.8 -9.4
Cash flow before financing activities -30.7 7.0
Dividends paid -15.8 -14.8
Change in interest bearing debt 33.7 17.2
Proceeds from options excercised 10.5 0
Net cash used in financing activities 28.5 2.4
Translation differences in cash -0.9 1.0
Change of cash and cash equivalents -3.1 10.4
Cash Flow Statement
Results Q2/2006 40
0.14
0.45
0.86
1.14
0.430.29
0
1
2
2002 2003 2004 2005 1-6/05 1-6/06
EUR
Net Cash Flow from Operating Activities/Share
Results Q2/2006 41
MEUR1-6/2006
MEUR 1-6/2005 % Change
Sales 636.6 427.4 48.9
Operating Income (EBIT) 35.0 13.9 152.3
Income before taxes 29.5 -0.9
Net Income 20.7 -0.6
Net cash flow from operating activities 26.1 16.5
Net cash flow from operating activities per share
0.45 0.29
Net interest bearing debt 177.0 116.1
Net gearing (%) 102.1 91.3
Solidity (%) 24.1 26.5
Return on capital employed (%), LTM 22.6 15.1
Return on equity (%), LTM 30.2 10.6
Equity per share (EUR) 2.95 2.25
Investments 7.7 7.4
Personnel at end of period 7 256 4 940
Personnel on average 6 435 4 814 33.7
Key Figures
Results Q2/2006 42
• Pekka Lundmark, President and CEOtel. +358-20 427 2000 or [email protected]
• Teuvo Rintamäki, Chief Financial Officertel.+358-20-427 2040 or [email protected]
• Paul Lönnfors, Investor Relations Managertel.+358-20-427 2050 or [email protected]
www.konecranes.com