KONECRANES PLC INTERIM REPORT, JANUARY-MARCH 2024 APRIL 25, 2024 8:30 am EEST
Konecranes Plc: Interim report, January-March 2024: Record-high Q1 profitability
Record-high Q1 profitability
This release is a summary of Konecranes Plc’s Interim report, January-March 2024. 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.
Konecranes has made changes in reporting Industrial Equipment's order intake and net sales. The change also impacts Industrial Equipment's profitability. The previous year’s figures presented in this release have been restated and are fully comparable with the current year figures.
FIRST QUARTER HIGHLIGHTS
- Order intake EUR 909.1 million (1,289.6), -29.5 percent (-29.0 percent on a comparable currency basis), order intake increased in Service but decreased in Port Solutions and Industrial Equipment
- Service annual agreement base value EUR 326.0 million (311.1), +4.8 percent (+5.3 percent on a comparable currency basis)
- Service order intake EUR 388.5 million (378.8), +2.6 percent (+3.7 percent on a comparable currency basis)
- Order book EUR 3,046.4 million (3,281.4) at the end of March, -7.2 percent (-6.8 percent on a comparable currency basis)
- Sales EUR 913.1 million (899.3), +1.5 percent (+2.5 percent on a comparable currency basis), sales increased in Service and Port Solutions but decreased in Industrial Equipment
- Comparable EBITA margin 11.1 percent (10.6) and comparable EBITA EUR 101.8 million (95.4); the increase in the comparable EBITA margin was mainly attributable to higher productivity and pricing
- Operating profit EUR 89.1 million (85.8), 9.8 percent of sales (9.5), items affecting comparability totaled EUR 4.8 million (2.6), mainly comprising of restructuring costs
- Earnings per share (diluted) EUR 0.75 (0.66)
- Free cash flow EUR 48.8 million (116.0)
- Net debt EUR 334.7 million (586.1) and gearing 21.8 percent (42.3)
DEMAND OUTLOOK
Our demand environment within industrial customer segments has remained good and continues on a healthy level.
Global container throughput continues on a high level, and long-term prospects related to global container handling remain good overall.
FINANCIAL GUIDANCE
Konecranes expects net sales to remain approximately on the same level or to increase in 2024 compared to 2023. Konecranes expects the comparable EBITA margin to remain approximately on the same level or to improve in 2024 compared to 2023.
KEY FIGURES
|
|
1-3/
2024
|
1-3/
2023
|
Change
%
|
R12M
|
1-12/
2023
|
|
Orders received, MEUR
|
909.1
|
1,289.6
|
-29.5
|
3,780.9
|
4,161.4
|
|
Order book at end of period, MEUR
|
3,046.4
|
3,281.4
|
-7.2
|
|
3,040.8
|
|
Sales total, MEUR
|
913.1
|
899.3
|
1.5
|
3,980.2
|
3,966.3
|
|
Comparable EBITDA, MEUR 1
|
124.4
|
117.9
|
5.5
|
541.5
|
535.0
|
|
Comparable EBITDA, % 1
|
13.6%
|
13.1%
|
|
13.6%
|
13.5%
|
|
Comparable EBITA, MEUR 1
|
101.8
|
95.4
|
6.7
|
457.1
|
450.7
|
|
Comparable EBITA, % 1
|
11.1%
|
10.6%
|
|
11.5%
|
11.4%
|
|
Comparable operating profit, MEUR 1
|
93.9
|
88.4
|
6.3
|
425.2
|
419.7
|
|
Comparable operating margin, % 1
|
10.3%
|
9.8%
|
|
10.7%
|
10.6%
|
|
Operating profit, MEUR
|
89.1
|
85.8
|
3.9
|
405.8
|
402.5
|
|
Operating margin, %
|
9.8%
|
9.5%
|
|
10.2%
|
10.1%
|
|
Profit before taxes, MEUR
|
79.5
|
72.2
|
10.1
|
374.9
|
367.6
|
|
Net profit for the period, MEUR
|
59.3
|
52.7
|
12.5
|
282.2
|
275.6
|
|
Earnings per share, basic, EUR
|
0.75
|
0.67
|
12.5
|
3.56
|
3.48
|
|
Earnings per share, diluted, EUR
|
0.75
|
0.66
|
12.5
|
3.55
|
3.46
|
|
Gearing, %
|
21.8%
|
42.3%
|
|
|
22.9%
|
|
Net debt / Comparable EBITDA, R12M 1
|
0.6
|
1.3
|
|
|
0.7
|
|
Return on capital employed, %
|
|
|
|
17.6%
|
16.4%
|
|
Comparable return on capital employed, % 2
|
|
|
|
18.9%
|
17.7%
|
|
Free cash flow, MEUR
|
48.8
|
116.0
|
|
444.1
|
511.4
|
|
Average number of personnel during the period
|
16,570
|
16,551
|
0.1
|
|
16,503
|
1) Excluding items affecting comparability, see also note 11 in the summary financial statements
2) ROCE excluding items affecting comparability, see also note 11 in the summary financial statements
CEO ANDERS SVENSSON:
Konecranes had a good Q1. Group order intake remained healthy, and our delivery capability continued on a good level. Profitability improved year-on-year, and we posted a record-high Q1 comparable EBITA margin - 11.1%. Performance was particularly strong in Service.
Our demand environment remained healthy in Q1 despite a year-on-year order intake decrease of 29.0% on a comparable currency basis. The comparison period was strong in Industrial Equipment and Port Solutions, as we received exceptionally large single orders in both businesses. Our orderbook totaled €3.0 billion at the end of March, 6.8% lower than a year ago on a comparable currency basis.
Delivery capability continued at the same good level as in previous quarters. Group sales exceeded €913 million and were 2.5% higher versus a year ago on a comparable currency basis. Our Q1 sales were negatively affected by the strikes in the Finnish ports, the delay impact being some €15-20 million, mainly in Industrial Equipment.
Comparable EBITA margin improved year-on-year and was 11.1%, mainly driven by productivity improvement and pricing. Profitability improved year-on-year in Service and Port Solutions but declined in Industrial Equipment.
Turning to our Business Segments, Service had a strong quarter. Order intake increased 3.7% year-on-year in comparable currencies. Sales increased 5.1% year-on-year in comparable currencies. The comparable EBITA margin improved year-on-year to 19.9%, a new record for Q1, mainly driven by higher productivity and pricing. The agreement base value continued to grow and in comparable currencies was 5.3% higher at the end of Q1 versus a year ago.
Industrial Equipment’s external orders decreased 29.7% in comparable currencies against a strong comparison period. Sequentially, external orders increased 10.8%. External sales decreased by 7.6% year-on-year in comparable currencies. Following the sales decline, the comparable EBITA margin decreased year-on-year to 6.5%. Our Industrial Service and Equipment optimization program continued to progress, and we booked €3.8 million of restructuring costs in Industrial Equipment, mainly related to headcount reduction in India. As a result, we have updated our restructuring cost estimate to €40-50 million from the earlier €30-40 million. So far, we have booked approximately €40 million of restructuring costs.
In Port Solutions, order intake totaled €248 million, decreasing 51.4% year-on-year in comparable currencies versus a record-high comparison period. Sales execution continued to improve, and sales grew 10.2% year-on-year in comparable currencies. Comparable EBITA margin improved to 7.1%, mainly due to higher sales volumes. We also received an R&D subsidy of €2.1 million. Port Solutions ended the quarter with an orderbook value of over EUR 1.6 billion.
As a part of our continuous efforts to optimize our business and supply chain, we have investigated different options for our straddle carrier manufacturing operations in Würzburg, Germany. At the moment, our priority is to find a new owner for the site to outsource our straddle carrier manufacturing, but we cannot rule out a possible ramp-down of production. In any case, we will continue to be a leading provider of straddle carriers and related services in the future, but in ways that fully leverage our existing global supply chain footprint.
As for the outlook, we expect the demand environment within our industrial customers to remain healthy. Regarding our port customers, container throughput continues to be on a high level, and long-term prospects related to container handling remain good. Our Port Solutions sales pipeline includes a good mix of projects of all sizes. Quarterly order intake fluctuation is normal for the business, as the booking of orders depends on the timing of customer decision-making.
We also reiterate our financial guidance for 2024. We expect our net sales and comparable EBITA margin to remain on the same level or to increase in 2024 compared to 2023.
Overall, Konecranes had a good start to the new year. Our Q1 provides a solid foundation for the whole year’s performance, and I am proud of the hard work and dedication of our team. We have all the ingredients in place for another good year.
ANALYST AND PRESS BRIEFING
A live international webcast and telephone conference for analysts, investors and media will be arranged today at 11:00 a.m. EEST. The event will be held in English. The interim report will be presented by President and CEO Anders Svensson and CFO Teo Ottola. Questions may be presented at the end of the conference. The conference will be recorded, and an on-demand version of the conference will be published on the company's website later during the day.
The webcast can be watched through the following link:
https://konecranes.videosync.fi/q1-2024
To ask questions, the telephone conference can be joined by registering through the following link:
https://palvelu.flik.fi/teleconference/?id=50049971
Phone numbers and the conference ID to access the conference will be provided after the registration. In case you would like to ask a question during the conference, please dial *5 on your telephone keypad to enter the question queue.
Questions can also be presented in writing through the question form, while watching the webcast.
NEXT REPORT
Konecranes Plc will publish its Half-year financial report, January-June 2024 on July 26, 2024.
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 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 global leader in material handling solutions, serving a broad range of customers across multiple industries. We consistently set the industry benchmark, from everyday improvements to the breakthroughs at moments that matter most, because we know we can always find a safer, more productive and sustainable way. That's why, with around 16,600 professionals in over 50 countries, Konecranes is trusted every day to lift, handle and move what the world needs. In 2023, Group sales totalled EUR 4.0 billion. Konecranes shares are listed on Nasdaq Helsinki (symbol: KCR).
DISTRIBUTION
Nasdaq Helsinki
Major media
www.konecranes.com
