KONECRANES PLC HALF-YEAR FINANCIAL REPORT, JANUARY-JUNE 2022 JULY 27, 2022 8:30 am EEST
Konecranes Plc: Half-year financial report January-June 2022
Strong order intake continued in a challenging environment
This release is a summary of Konecranes Plc’s Half-year financial report January-June 2022. 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.
Since the beginning of June, Service and Industrial Equipment have been focused under the same leadership. Following this change, Konecranes has two Business Areas: Industrial Service and Equipment, and Port Solutions. Konecranes continues to report three segments: Service, Industrial Equipment, and Port Solutions, and the segment figures are comparable with historical figures.
SECOND QUARTER HIGHLIGHTS
- Order intake EUR 1,007.8 million (806.7), +24.9 percent (+19.9 percent on a comparable currency basis), driven by order intake increase in all three segments
- Service annual agreement base value increased 9.7 percent (+3.2 percent on a comparable currency basis) to EUR 310.2 million (282.8). Service order intake was EUR 297.2 million (257.5), +15.4 percent (+8.9 percent on a comparable currency basis)
- Order book EUR 2,825.4 million (1,974.8) at the end of June, +43.1 percent (+36.7 percent on a comparable currency basis)
- Sales EUR 787.1 million (759.3), +3.7 percent (-0.2 percent on a comparable currency basis), sales increased in Service and Industrial Equipment but decreased in Port Solutions
- Adjusted EBITA margin 7.7 percent (8.6) and adjusted EBITA EUR 60.9 million (65.3); the decrease in the adjusted EBITA margin was mainly attributable to low sales volumes and cost inflation
- Operating profit EUR 48.2 million (46.6), 6.1 percent of sales (6.1), adjustments totaled EUR 5.8 million (10.4)
- Earnings per share (diluted) EUR 0.35 (0.36)
- Free cash flow EUR -30.7 million (15.4)
JANUARY–JUNE 2022 HIGHLIGHTS
- Order intake EUR 2,037.4 million (1,569.5), +29.8 percent (+25.7 percent on a comparable currency basis)
- Service order intake EUR 580.4 million (512.7), +13.2 percent (+7.7 percent on a comparable currency basis)
- Sales EUR 1,459.2 million (1,463.3), -0.3 percent (-3.5 percent on a comparable currency basis)
- Adjusted EBITA margin 7.2 percent (8.3) and adjusted EBITA EUR 105.0 million (121.6); the adjusted EBITA margin decreased in all three segments
- Operating profit EUR 28.7 million (84.1), 2.0 percent of sales (5.8), adjustments totaled EUR 62.4 million (20.7), mainly comprised of costs related to the impacts of the war in Ukraine and merger related costs
- Earnings per share (diluted) EUR 0.09 (0.59)
- Free cash flow EUR -28.1 million (33.0)
- Net debt EUR 700.1 million (624.4) and gearing 55.1 percent (50.6)
THIRD QUARTER DEMAND OUTLOOK
The worldwide demand picture remains subject to volatility due to the war in Ukraine and COVID-19 having increased inflation and material availability concerns.
In Europe and North America, the demand environment within the industrial customer segments is on a healthy level; yet there are some early signs of weakening. In Asia-Pacific, the demand environment has started to show signs of improvement.
Global container throughput continues high, and long-term prospects related to global container handling remain good overall.
FINANCIAL GUIDANCE
Konecranes expects net sales to remain on the same level or to increase in full-year 2022 compared to 2021. Konecranes expects the adjusted EBITA margin to remain on the same level or to decrease in full-year 2022 compared to 2021.
KEY FIGURES
|
|
Second quarter
|
January - June
|
|
|
|
|
4-6/
2022
|
4-6/
2021
|
Change
%
|
1-6/
2022
|
1-6/
2021
|
Change
%
|
R12M
|
1-12/
2021
|
|
Orders received, MEUR
|
1,007.8
|
806.7
|
24.9
|
2,037.4
|
1,569.5
|
29.8
|
3,643.4
|
3,175.5
|
|
Order book at end of period, MEUR
|
|
|
|
2,825.4
|
1,974.8
|
43.1
|
|
2,036.8
|
|
Sales total, MEUR
|
787.1
|
759.3
|
3.7
|
1,459.2
|
1,463.3
|
-0.3
|
3,181.7
|
3,185.7
|
|
Adjusted EBITDA, MEUR 1
|
82.5
|
86.5
|
-4.5
|
148.8
|
165.5
|
-10.1
|
382.2
|
398.9
|
|
Adjusted EBITDA, % 1
|
10.5%
|
11.4%
|
|
10.2%
|
11.3%
|
|
12.0%
|
12.5%
|
|
Adjusted EBITA, MEUR 2
|
60.9
|
65.3
|
-6.8
|
105.0
|
121.6
|
-13.7
|
295.6
|
312.2
|
|
Adjusted EBITA, % 2
|
7.7%
|
8.6%
|
|
7.2%
|
8.3%
|
|
9.3%
|
9.8%
|
|
Adjusted operating profit, MEUR 1
|
54.0
|
57.0
|
-5.4
|
91.1
|
104.8
|
-13.1
|
265.3
|
279.1
|
|
Adjusted operating margin, % 1
|
6.9%
|
7.5%
|
|
6.2%
|
7.2%
|
|
8.3%
|
8.8%
|
|
Operating profit, MEUR
|
48.2
|
46.6
|
3.4
|
28.7
|
84.1
|
-65.9
|
164.5
|
220.0
|
|
Operating margin, %
|
6.1%
|
6.1%
|
|
2.0%
|
5.8%
|
|
5.2%
|
6.9%
|
|
Profit before taxes, MEUR
|
37.7
|
41.1
|
-8.4
|
8.3
|
67.8
|
-87.8
|
133.0
|
192.5
|
|
Net profit for the period, MEUR
|
27.3
|
28.4
|
-3.9
|
6.0
|
46.8
|
-87.2
|
106.6
|
147.4
|
|
Earnings per share, basic, EUR
|
0.35
|
0.36
|
-2.7
|
0.09
|
0.59
|
-84.9
|
1.36
|
1.86
|
|
Earnings per share, diluted, EUR
|
0.35
|
0.36
|
-3.2
|
0.09
|
0.59
|
-85.0
|
1.35
|
1.85
|
|
Gearing, %
|
|
|
|
55.1%
|
50.6%
|
|
|
39.8%
|
|
Net debt / Adjusted EBITDA, R12M 1
|
|
|
|
1.8
|
1.6
|
|
|
1.4
|
|
Return on capital employed, %
|
|
|
|
|
|
|
6.8%
|
9.3%
|
|
Adjusted return on capital employed, % 3
|
|
|
|
|
|
|
13.0%
|
13.4%
|
|
Free cash flow, MEUR
|
-30.7
|
15.4
|
|
-28.1
|
33.0
|
|
76.5
|
137.7
|
|
Average number of personnel during the period
|
|
|
|
16,588
|
16,670
|
-0.5
|
|
16,625
|
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
INTERIM CEO TEO OTTOLA:
In Q2, Konecranes’ operating environment and performance continued similar to the previous quarter. Order intake remained high, but at the same time, profitability declined year-on-year mainly due to low sales volumes caused by component and material availability and COVID-19 related challenges. Although we lowered our full-year 2022 guidance earlier this month, our record-high orderbook and strong performance focus provide a solid foundation for future success.
Despite geopolitical tensions, the pandemic and growing macroeconomic concerns, the overall market sentiment remained good in Q2, and on Group level, our order intake was not far from Q1’s record level. Year-on-year, Konecranes’ Q2 orders received grew 19.9% in comparable currencies and surpassed €1 billion for a second consecutive quarter. Order intake in short-cycle products was better than expected.
Component availability and other supply chain constraints, as well as COVID-19 related challenges affected our revenues in all three segments in Q2. Eliminating the impact of price increases, sales decreased year-on-year in comparable currencies. As a result of our continued high order intake and delivery capability issues, our order book broke again a new record and was EUR 2,825 million at the end of June.
Our adjusted EBITA margin declined year-on-year to 7.7%, mainly driven by lower sales volume due to component and material shortage and COVID-19 related challenges as well as cost inflation. Profitability declined in all three segments.
Service order intake improved by 8.9% year-on-year in comparable currencies. Supply chain issues and the COVID-19 related lockdowns in China impacted Service sales which remained flat year-on-year in comparable currencies. Profitability declined mainly as a result of lower productivity due to the named issues and challenges, and adjusted EBITA margin totaled 15.5%. The agreement base value grew by 3.2% from the previous year in comparable currencies.
Industrial Equipment’s external order intake grew by 6.1% in comparable currencies. Customer delays and supply chain constraints continued, and external sales increased only slightly in comparable currencies thanks to pricing. Adjusted EBITA margin declined year-on-year and was 1.0%, mainly driven by the low sales volumes and inflation.
Activity remained high within ports, and Port Solutions’ orders grew by 47.3% in comparable currencies and totaled €404 million, including also larger projects. In addition to material availability and COVID-19 related lockdowns, sales were again impacted by timing of customer deliveries and declined 2.0% year-on-year in comparable currencies. As a result, adjusted EBITA margin decreased to 6.7%. Despite the profitability decline, project execution remained on a good level.
We expect the market volatility caused by the ongoing war, the pandemic and other macroeconomic concerns to continue. Although the demand environment has remained good, uncertainty has increased, and we have updated our demand outlook for Q3 to reflect the current market sentiment.
As we do not expect the situation with supply chain constraints to normalize in near-term, we lowered our full-year guidance ahead of the half-year financial report. We expect our net sales to remain on the same level or to increase in full-year 2022 compared to 2021 and our full-year adjusted EBITA margin to remain on the same level or to decline compared to 2021. However, in the second half of the year, we expect our delivery capability to improve compared to the first half and the earlier implemented price increases to start to impact our profitability.
Looking ahead, we will continue to drive efficiency improvements throughout the company. As announced earlier, since the beginning of June, our Service and Industrial Equipment segments have been focused under one leadership. Following this change, we have started to identify opportunities for efficiency improvement and simplification of our industrial business model.
In June, we announced that Anders Svensson has been appointed as Konecranes’ new President and CEO. He will assume his role on October 19 and joins Konecranes from Sandvik, where he is currently President of the Sandvik Rock Processing Solutions Business Area. As Anders will start in his new role as late as in October, we have decided to postpone our planned Capital Markets Day to H1/2023. On behalf of Konecranes Leadership Team and employees, I would like to wish Anders warmly welcome to Konecranes. I look forward to our future cooperation.
Before that, plenty of work lies ahead of us and there remains a lot to achieve. We maintain our focus on business excellence, continuous improvement, and sustainability, and delivering the best for our customers. I would once again like to thank our employees for their commitment and our customers and business partners for the good cooperation amidst the challenging circumstances.
ANALYST AND PRESS BRIEFING
A live international video conference for analysts, investors and media will be held on July 27, 2022, at 11:30 a.m. EEST. The January-June 2022 half-year financial report will be presented by CFO and interim CEO Teo Ottola.
The teleconference can be joined, and the live webcast watched through the following link:
https://konecranes.videosync.fi/2022-q2
The link becomes active 15 minutes prior to start of the conference.
Participant Passcode: 28999297#
The event can be also attended by calling one of the following phone numbers:
|
Location
|
Phone number
|
|
Finland
|
+358 981710310
|
|
Sweden
|
+46 856642651
|
|
United Kingdom
|
+44 3333000804
|
|
United States
|
+1 6319131422
|
NEXT REPORT
Konecranes Plc plans to publish its January-September 2022 interim report on October 26, 2022.
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 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 2021, Group sales totaled EUR 3.2 billion. The Group has approximately 16,600 employees in around 50 countries. Konecranes shares are listed on the Nasdaq Helsinki (symbol: KCR).
DISTRIBUTION
Nasdaq Helsinki
Major media
www.konecranes.com
