KONECRANES PLC HALF-YEAR FINANCIAL REPORT, JANUARY-JUNE 2024 JULY 26, 2024 8:30 am EEST
Konecranes Plc's Half-year financial report, January-June 2024
Record-high comparable EBITA margin in all Business Segments
This release is a summary of Konecranes Plc's Half-year financial report, January-June 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.
SECOND QUARTER HIGHLIGHTS
- Order intake EUR 967.7 million (1,092.9), -11.5 percent (-11.6 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 331.8 million (313.9), +5.7 percent (+5.9 percent on a comparable currency basis)
- Service order intake EUR 406.4 million (374.5), +8.5 percent (+8.5 percent on a comparable currency basis)
- Order book EUR 2,987.1 million (3,411.4) at the end of June, -12.4 percent (-12.8 percent on a comparable currency basis)
- Sales EUR 1,031.5 million (913.0), +13.0 percent (+13.0 percent on a comparable currency basis), sales increased in all segments
- Comparable EBITA margin 14.3 percent (10.8) and comparable EBITA EUR 147.3 million (98.3); the increase in the comparable EBITA margin was mainly driven by pricing and higher volumes, as well as good strategy execution.
- Operating profit EUR 137.8 million (98.0), 13.4 percent of sales (10.7), items affecting comparability totaled EUR 1.9 million (-7.7), mainly comprising of restructuring costs
- Earnings per share (diluted) EUR 1.26 (0.71)
- Free cash flow EUR 21.5 million (114.0)
JANUARY-JUNE 2024 HIGHLIGHTS
- Order intake EUR 1,876.8 million (2,382.5), -21.2 percent (-21.0 percent on a comparable currency basis)
- Service order intake EUR 794.9 million (753.3), +5.5 percent (+6.2 percent on a comparable currency basis)
- Sales EUR 1,944.6 million (1,812.3), +7.3 percent (+7.8 percent on a comparable currency basis)
- Comparable EBITA margin 12.8 percent (10.7) and comparable EBITA EUR 249.0 million (193.7); the comparable EBITA margin increased in all three segments
- Operating profit EUR 226.9 million (183.7), 11.7 percent of sales (10.1), items affecting comparability totaled EUR 6.7 million (-5.1), mainly comprising of restructuring costs
- Earnings per share (diluted) EUR 2.00 (1.38)
- Free cash flow EUR 70.3 million (230.0)
- Net debt EUR 437.7 million (619.8) and gearing 26.8 percent (43.2)
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 full-year 2024 comparable EBITA margin to improve from 2023.
KEY FIGURES
+-----------+-------+-------+------+-------+-------+------+-------+-------+
|           | 4-6/  | 4-6/  |Change| 1-6/  | 1-6/  |Change| R12M  | 1-12/ |
|           |2024   |2023   |%     |2024   |2023   |%     |       |2023   |
+-----------+-------+-------+------+-------+-------+------+-------+-------+
|Orders     |967.7  |1,092.9|-11.5 |1,876.8|2,382.5|-21.2 |3,655.8|4,161.4|
|received,  |       |       |      |       |       |      |       |       |
|MEUR       |       |       |      |       |       |      |       |       |
+-----------+-------+-------+------+-------+-------+------+-------+-------+
|Order book |       |       |      |2,987.1|3,411.4|-12.4 |       |3,040.8|
|at end of  |       |       |      |       |       |      |       |       |
|period,    |       |       |      |       |       |      |       |       |
|MEUR       |       |       |      |       |       |      |       |       |
+-----------+-------+-------+------+-------+-------+------+-------+-------+
|Sales      |1,031.5|913.0  |13.0  |1,944.6|1,812.3|7.3   |4,098.7|3,966.3|
|total, MEUR|       |       |      |       |       |      |       |       |
+-----------+-------+-------+------+-------+-------+------+-------+-------+
|Comparable |168.9  |118.7  |42.4  |293.3  |236.5  |24.0  |591.8  |535.0  |
|EBITDA,    |       |       |      |       |       |      |       |       |
|MEUR 1     |       |       |      |       |       |      |       |       |
+-----------+-------+-------+------+-------+-------+------+-------+-------+
|Comparable |16.4%  |13.0%  |      |15.1%  |13.1%  |      |14.4%  |13.5%  |
|EBITDA, % 1|       |       |      |       |       |      |       |       |
+-----------+-------+-------+------+-------+-------+------+-------+-------+
|Comparable |147.3  |98.3   |49.8  |249.0  |193.7  |28.6  |506.1  |450.7  |
|EBITA, MEUR|       |       |      |       |       |      |       |       |
|1          |       |       |      |       |       |      |       |       |
+-----------+-------+-------+------+-------+-------+------+-------+-------+
|Comparable |14.3%  |10.8%  |      |12.8%  |10.7%  |      |12.3%  |11.4%  |
|EBITA, % 1 |       |       |      |       |       |      |       |       |
+-----------+-------+-------+------+-------+-------+------+-------+-------+
|Comparable |139.7  |90.3   |54.7  |233.6  |178.7  |30.7  |474.6  |419.7  |
|operating  |       |       |      |       |       |      |       |       |
|profit,    |       |       |      |       |       |      |       |       |
|MEUR 1     |       |       |      |       |       |      |       |       |
+-----------+-------+-------+------+-------+-------+------+-------+-------+
|Comparable |13.5%  |9.9%   |      |12.0%  |9.9%   |      |11.6%  |10.6%  |
|operating  |       |       |      |       |       |      |       |       |
|margin, % 1|       |       |      |       |       |      |       |       |
+-----------+-------+-------+------+-------+-------+------+-------+-------+
|Operating  |137.8  |98.0   |40.6  |226.9  |183.7  |23.5  |445.6  |402.5  |
|profit,    |       |       |      |       |       |      |       |       |
|MEUR       |       |       |      |       |       |      |       |       |
+-----------+-------+-------+------+-------+-------+------+-------+-------+
|Operating  |13.4%  |10.7%  |      |11.7%  |10.1%  |      |10.9%  |10.1%  |
|margin, %  |       |       |      |       |       |      |       |       |
+-----------+-------+-------+------+-------+-------+------+-------+-------+
|Profit     |131.9  |77.5   |70.3  |211.4  |149.7  |41.2  |429.3  |367.6  |
|before     |       |       |      |       |       |      |       |       |
|taxes,     |       |       |      |       |       |      |       |       |
|MEUR       |       |       |      |       |       |      |       |       |
+-----------+-------+-------+------+-------+-------+------+-------+-------+
|Net profit |99.7   |56.6   |76.2  |159.0  |109.3  |45.5  |325.3  |275.6  |
|for the    |       |       |      |       |       |      |       |       |
|period,    |       |       |      |       |       |      |       |       |
|MEUR       |       |       |      |       |       |      |       |       |
+-----------+-------+-------+------+-------+-------+------+-------+-------+
|Earnings   |1.26   |0.71   |76.2  |2.01   |1.38   |45.5  |4.11   |3.48   |
|per share, |       |       |      |       |       |      |       |       |
|basic, EUR |       |       |      |       |       |      |       |       |
+-----------+-------+-------+------+-------+-------+------+-------+-------+
|Earnings   |1.26   |0.71   |76.2  |2.00   |1.38   |45.5  |4.09   |3.46   |
|per share, |       |       |      |       |       |      |       |       |
|diluted,   |       |       |      |       |       |      |       |       |
|EUR        |       |       |      |       |       |      |       |       |
+-----------+-------+-------+------+-------+-------+------+-------+-------+
|Gearing, % |       |       |      |26.8%  |43.2%  |      |       |22.9%  |
+-----------+-------+-------+------+-------+-------+------+-------+-------+
|Net debt / |       |       |      |0.7    |1.3    |      |       |0.7    |
|Comparable |       |       |      |       |       |      |       |       |
|EBITDA,    |       |       |      |       |       |      |       |       |
|R12M 1     |       |       |      |       |       |      |       |       |
+-----------+-------+-------+------+-------+-------+------+-------+-------+
|Return on  |       |       |      |       |       |      |19.2%  |16.4%  |
|capital    |       |       |      |       |       |      |       |       |
|employed, %|       |       |      |       |       |      |       |       |
+-----------+-------+-------+------+-------+-------+------+-------+-------+
|Comparable |       |       |      |       |       |      |20.2%  |17.7%  |
|return on  |       |       |      |       |       |      |       |       |
|capital    |       |       |      |       |       |      |       |       |
|employed, %|       |       |      |       |       |      |       |       |
|2          |       |       |      |       |       |      |       |       |
+-----------+-------+-------+------+-------+-------+------+-------+-------+
|Free cash  |21.5   |114.0  |      |70.3   |230.0  |      |351.6  |511.4  |
|flow, MEUR |       |       |      |       |       |      |       |       |
+-----------+-------+-------+------+-------+-------+------+-------+-------+
|Average    |       |       |      |16,587 |16,477 |0.7   |       |16,503 |
|number of  |       |       |      |       |       |      |       |       |
|personnel  |       |       |      |       |       |      |       |       |
|during the |       |       |      |       |       |      |       |       |
|period     |       |       |      |       |       |      |       |       |
+-----------+-------+-------+------+-------+-------+------+-------+-------+
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 an excellent Q2. Performance was strong in all Business Segments. Order intake remained healthy, and sales grew year-on-year. Thanks to sales growth and good strategy execution, profitability improved year-on-year, and we posted an all-time high quarterly comparable EBITA margin - 14.3%. This is an excellent achievement, and I would like to thank the whole Konecranes team for the strong performance.
The demand environment remained healthy in Q2, although our order intake declined 11.6% year-on-year on a comparable currency basis. The orderbook was nearly €3.0 billion at the end of June, 12.8% lower than a year ago on a comparable currency basis.
Delivery capability continued to be good. Group sales exceeded €1 billion and were 13.0% higher versus a year ago on a comparable currency basis. Sales grew in all three Business Segments.
Our comparable EBITA margin improved year-on-year and was 14.3%, mainly driven by pricing and higher volumes, as well as good strategy execution. Profitability improved in all three Business Segments.
Service had yet another strong quarter. Order intake increased 8.5% year-on-year in comparable currencies. Sales increased 8.8% year-on-year in comparable currencies. The comparable EBITA margin improved year-on-year to an all-time high of 22.1%, mainly driven by pricing and higher volumes. The agreement base value continued to grow and in comparable currencies was 5.9% higher at the end of Q2 versus a year ago. We have also continued to expand our field service network through bolt-on acquisitions and acquired Dungs Kran- und Anlagentechnik Gmbh in the Lower Rhine region in Germany in the beginning of July.
Industrial Equipment's external orders decreased 10.9% year-on-year in comparable currencies but remained close to the previous' quarter's level. External sales increased by 6.8% year-on-year in comparable currencies. Driven by volume growth and good strategy execution, the comparable EBITA margin increased year-on-year to an all-time high of 9.8%. The comparable EBITA margin was also positively impacted by approximately €4 million of favorable resolution of project related claims.
In Port Solutions, order intake totaled €308 million, decreasing 26.9% year-on-year in comparable currencies against a strong comparison period. Port Solutions had a good delivery quarter, and sales grew 25.0% year-on-year in comparable currencies. The comparable EBITA margin was an all-time high, 10.5%, and the improvement was mainly driven by pricing, volume growth and mix. Port Solutions ended the quarter with an orderbook value of over EUR 1.6 billion.
Regarding the market outlook, we expect the demand environment within our industrial customers to remain healthy. Although customer decision-making is taking somewhat longer for larger industrial projects, our sales funnels continue at a high level, and we keep receiving new sales cases. As for 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.
Our strategy execution has progressed better than initially expected. As a result, we updated our financial guidance in June, and upgraded our profitability guidance for this year. We now expect our net sales to remain on the same level or to increase in 2024 compared to 2023, and our comparable EBITA margin to improve from the previous year. That said, we are not expecting our profitability to improve sequentially in Q3 versus Q2.
Overall, Q2 was one of Konecranes' strongest quarters ever. Our performance improvement demonstrates that we are doing the right things as a company, and moving what really matters. On a rolling twelve-month basis, we are now within our profitability target range on the Group level and in Service. Next, our aim is to do that across all our three Business Segments on a continuous basis.
ANALYST AND PRESS BRIEFING
A live international webcast and telephone conference for analysts, investors and media will be arranged today at 11:30 a.m. EEST. The event will be held in English. The half-year financial 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/q2-2024
To ask questions, the telephone conference can be joined by registering through the following link:
https://palvelu.flik.fi/teleconference/?id=50049972
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 interim report, January-September 2024 on October 25, 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