KONECRANES PLC INTERIM REPORT, JANUARY-SEPTEMBER 2024 OCTOBER 25, 2024 8:30 am EEST
Konecranes Plc's Interim report, January-September 2024: Continued strong performance
This release is a summary of Konecranes Plc's Interim report, January-September 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.
THIRD QUARTER HIGHLIGHTS
- Order intake EUR 956.2 million (852.9), +12.1 percent (+12.5 percent on a comparable currency basis), order intake increased in Service and Port Solutions but decreased in Industrial Equipment
- Service annual agreement base value EUR 328.9 million (321.0), +2.5 percent (+4.7 percent on a comparable currency basis)
- Order book EUR 2,847.4 million (3,282.1) at the end of September, -13.2 percent (-12.2 percent on a comparable currency basis)
- Sales EUR 1,069.9 million (1,005.1), +6.4 percent (+6.8 percent on a comparable currency basis), sales increased in all segments
- Comparable EBITA margin 13.4 percent (12.3) and comparable EBITA EUR 143.1 million (123.2); the increase in the comparable EBITA margin was mainly driven by pricing and higher volumes, as well as good strategy execution.
- Operating profit EUR 138.1 million (97.2), 12.9 percent of sales (9.7)
- Earnings per share (diluted) EUR 1.27 (0.88)
- Free cash flow EUR 187.1 million (114.6)
JANUARY-SEPTEMBER 2024 HIGHLIGHTS
- Order intake EUR 2,833.0 million (3,235.4), -12.4 percent (-12.2 percent on a comparable currency basis)
- Sales EUR 3,014.5 million (2,817.4), +7.0 percent (+7.4 percent on a comparable currency basis)
- Comparable EBITA margin 13.0 percent (11.2) and comparable EBITA EUR 392.2 million (316.9); the comparable EBITA margin increased in all three segments
- Operating profit EUR 365.0 million (280.9), 12.1 percent of sales (10.0), items affecting comparability totaled EUR 4.2 million (12.9), mainly comprising of restructuring costs
- Earnings per share (diluted) EUR 3.28 (2.26)
- Free cash flow EUR 257.4 million (344.6)
- Net debt EUR 266.9 million (518.0) and gearing 15.4 percent (34.3)
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 increase in 2024 compared to 2023. Konecranes expects the full-year 2024 comparable EBITA margin to improve from 2023.
KEY FIGURES
+-----------+-------+-------+------+-------+-------+------+-------+-------+
|           |7-9/   |7-9/   |Change|1-9/   |1-9/   |Change|R12M   |1-12/  |
|           |2024   |2023   |%     |2024   |2023   |%     |       |2023   |
+-----------+-------+-------+------+-------+-------+------+-------+-------+
|Orders     |956.2  |852.9  |12.1  |2,833.0|3,235.4|-12.4 |3,759.0|4,161.4|
|received,  |       |       |      |       |       |      |       |       |
|MEUR       |       |       |      |       |       |      |       |       |
+-----------+-------+-------+------+-------+-------+------+-------+-------+
|Order book |       |       |      |2,847.4|3,282.1|-13.2 |       |3,040.8|
|at end of  |       |       |      |       |       |      |       |       |
|period,    |       |       |      |       |       |      |       |       |
|MEUR       |       |       |      |       |       |      |       |       |
+-----------+-------+-------+------+-------+-------+------+-------+-------+
|Sales      |1,069.9|1,005.1|6.4   |3,014.5|2,817.4|7.0   |4,163.4|3,966.3|
|total, MEUR|       |       |      |       |       |      |       |       |
+-----------+-------+-------+------+-------+-------+------+-------+-------+
|Comparable |165.2  |143.6  |15.1  |458.5  |380.1  |20.6  |613.4  |535.0  |
|EBITDA,    |       |       |      |       |       |      |       |       |
|MEUR       |       |       |      |       |       |      |       |       |
|1          |       |       |      |       |       |      |       |       |
+-----------+-------+-------+------+-------+-------+------+-------+-------+
|Comparable |15.4%  |14.3%  |      |15.2%  |13.5%  |      |14.7%  |13.5%  |
|EBITDA, % 1|       |       |      |       |       |      |       |       |
+-----------+-------+-------+------+-------+-------+------+-------+-------+
|Comparable |143.1  |123.2  |16.2  |392.2  |316.9  |23.8  |526.0  |450.7  |
|EBITA, MEUR|       |       |      |       |       |      |       |       |
|1          |       |       |      |       |       |      |       |       |
+-----------+-------+-------+------+-------+-------+------+-------+-------+
|Comparable |13.4%  |12.3%  |      |13.0%  |11.2%  |      |12.6%  |11.4%  |
|EBITA, % 1 |       |       |      |       |       |      |       |       |
+-----------+-------+-------+------+-------+-------+------+-------+-------+
|Comparable |135.6  |115.2  |17.7  |369.2  |293.8  |25.6  |495.0  |419.7  |
|operating  |       |       |      |       |       |      |       |       |
|profit,    |       |       |      |       |       |      |       |       |
|MEUR 1     |       |       |      |       |       |      |       |       |
+-----------+-------+-------+------+-------+-------+------+-------+-------+
|Comparable |12.7%  |11.5%  |      |12.2%  |10.4%  |      |11.9%  |10.6%  |
|operating  |       |       |      |       |       |      |       |       |
|margin, % 1|       |       |      |       |       |      |       |       |
+-----------+-------+-------+------+-------+-------+------+-------+-------+
|Operating  |138.1  |97.2   |42.1  |365.0  |280.9  |29.9  |486.6  |402.5  |
|profit,    |       |       |      |       |       |      |       |       |
|MEUR       |       |       |      |       |       |      |       |       |
+-----------+-------+-------+------+-------+-------+------+-------+-------+
|Operating  |12.9%  |9.7%   |      |12.1%  |10.0%  |      |11.7%  |10.1%  |
|margin, %  |       |       |      |       |       |      |       |       |
+-----------+-------+-------+------+-------+-------+------+-------+-------+
|Profit     |134.4  |93.8   |43.4  |345.8  |243.5  |42.1  |470.0  |367.6  |
|before     |       |       |      |       |       |      |       |       |
|taxes,     |       |       |      |       |       |      |       |       |
|MEUR       |       |       |      |       |       |      |       |       |
+-----------+-------+-------+------+-------+-------+------+-------+-------+
|Net profit |101.1  |69.9   |44.6  |260.1  |179.2  |45.1  |356.5  |275.6  |
|for the    |       |       |      |       |       |      |       |       |
|period,    |       |       |      |       |       |      |       |       |
|MEUR       |       |       |      |       |       |      |       |       |
+-----------+-------+-------+------+-------+-------+------+-------+-------+
|Earnings   |1.28   |0.88   |44.6  |3.28   |2.26   |45.1  |4.50   |3.48   |
|per share, |       |       |      |       |       |      |       |       |
|basic, EUR |       |       |      |       |       |      |       |       |
+-----------+-------+-------+------+-------+-------+------+-------+-------+
|Earnings   |1.27   |0.88   |44.5  |3.28   |2.26   |45.1  |4.48   |3.46   |
|per share, |       |       |      |       |       |      |       |       |
|diluted,   |       |       |      |       |       |      |       |       |
|EUR        |       |       |      |       |       |      |       |       |
+-----------+-------+-------+------+-------+-------+------+-------+-------+
|Gearing, % |       |       |      |15.4%  |34.3%  |      |       |22.9%  |
+-----------+-------+-------+------+-------+-------+------+-------+-------+
|Net debt / |       |       |      |0.4    |1.0    |      |       |0.7    |
|Comparable |       |       |      |       |       |      |       |       |
|EBITDA,    |       |       |      |       |       |      |       |       |
|R12M 1     |       |       |      |       |       |      |       |       |
+-----------+-------+-------+------+-------+-------+------+-------+-------+
|Return on  |       |       |      |       |       |      |20.3%  |16.4%  |
|capital    |       |       |      |       |       |      |       |       |
|employed,  |       |       |      |       |       |      |       |       |
|%, R12M    |       |       |      |       |       |      |       |       |
+-----------+-------+-------+------+-------+-------+------+-------+-------+
|Comparable |       |       |      |       |       |      |20.4%  |17.7%  |
|return on  |       |       |      |       |       |      |       |       |
|capital    |       |       |      |       |       |      |       |       |
|employed,  |       |       |      |       |       |      |       |       |
|%,         |       |       |      |       |       |      |       |       |
|R12M2      |       |       |      |       |       |      |       |       |
+-----------+-------+-------+------+-------+-------+------+-------+-------+
|Free cash  |187.1  |114.6  |      |257.4  |344.6  |      |424.1  |511.4  |
|flow, MEUR |       |       |      |       |       |      |       |       |
+-----------+-------+-------+------+-------+-------+------+-------+-------+
|Average    |       |       |      |16,609 |16,483 |0.8   |       |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 delivered another strong performance in Q3, marking the 7th consecutive quarter with year-on-year growth in comparable EBITA margin. Both order intake and sales grew year-on-year. At the same time, strategy execution continued to be good, and as a result, Konecranes posted an all-time high Q3 comparable EBITA margin - 13.4%. Thanks to the continued strong commitment and performance across our organization, we have all the ingredients in place for an excellent year.
Despite the weakened macro indicators, our demand environment remained good in Q3. Order intake increased 12.5% year-on-year in comparable currencies, driven by Port Solutions and Service. Our orderbook was €2.8 billion at the end of September, 12.2% lower than a year ago on a comparable currency basis, but continuing to be on a good level historically.
Group sales exceeded €1 billion and were 6.8% 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 13.4%, mainly driven by pricing and higher volumes, as well as good strategy execution. Profitability improved year-on-year in all three Business Segments. Free cash flow was on an excellent level, €187 million, thanks to good deliveries.
In Service, order intake increased 4.5% year-on-year in comparable currencies. Sales increased 7.2% year-on-year in comparable currencies. The comparable EBITA margin improved year-on-year to 21.6%, mainly driven by higher volumes and pricing. The agreement base value continued to grow and in comparable currencies was 4.7% higher at the end of Q3 versus a year ago.
Industrial Equipment's external orders decreased 2.7% year-on-year in comparable currencies, mainly driven by slower decision-making in larger process crane orders. External sales increased by 6.1% year-on-year in comparable currencies. Driven by volume growth and pricing, the comparable EBITA margin increased year-on-year to 9.8%.
In Port Solutions, order intake totaled €334 million, increasing 43.2% year-on-year in comparable currencies. Port Solutions had yet another good delivery quarter, and sales grew 6.6% year-on-year in comparable currencies. The comparable EBITA margin improved year-on-year to 9.6%, mainly driven by higher sales due to pricing. Port Solutions ended the quarter with an orderbook value of over EUR 1.5 billion.
Regarding the market outlook, we expect the demand environment within our industrial customers to remain healthy. Our sales funnels continue at a high level, and we keep receiving new sales opportunities, but customer decision-making times remain longer for larger industrial projects.
When it comes to 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, but we do not expect any major changes in our demand environment in the coming quarters as a result of the timing of customer decision-making. That said, order intake can fluctuate on a quarterly basis due to the same reason.
Our delivery capability has remained excellent throughout 2024. At the same time, the demand environment for shorter-cycle products has this year been somewhat better than initially expected. As a result, we updated our financial guidance in September, upgrading our sales guidance for this year. Profitability guidance had been upgraded already earlier. We now expect our net sales to increase in 2024 compared to 2023, and our comparable EBITA margin to improve from the previous year.
Overall, Konecranes' performance continues to be strong. On a rolling twelve-month basis, we are now within our profitability target range in Service, Industrial Equipment and on the Group level. Port Solutions is approaching the range.
Our aim is to continue this positive financial development, and in September, we announced our new operating model to support our growth ambitions, especially in Service. From January 1, 2025, we will have three Business Areas: Industrial Service, Industrial Equipment and Port Solutions, as the Business Area Industrial Service and Equipment will be split into two. I am confident that this change will accelerate our decision-making and position us better for the future. I look forward to discussing our future ambitions and plans in more detail at our Capital Markets Day, which we plan to host in London on May 20, next year.
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 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/q3-2024
To ask questions, the telephone conference can be joined by registering through the following link:
https://palvelu.flik.fi/teleconference/?id=50049973
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 Financial statement release 2024 on February 7, 2025.
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 16,700 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