Konecranes Oyj posts 2012 results
Konecranes Oyj posts 2012 results.
FOURTH QUARTER HIGHLIGHTS
- Order intake EUR 423.8 million (473.9), -10.6 percent: Service -1.1 percent and Equipment -14.7 percent.
- Order book EUR 942.7 million (991.8) at year-end, -4.9 percent compared with a year before.
- Sales EUR 605.1 million (598.2), +1.2 percent: Service +1.8 percent and Equipment +1.8 percent.
- Operating profit before restructuring costs EUR 42.2 million (47.5), 7.0 percent (7.9) of sales.
- Restructuring costs EUR 5.8 million (10.3).
- Operating profit including restructuring costs EUR 36.4 million (37.2), 6.0 percent of sales (6.2).
- Earnings per share (diluted) EUR 0.39 (0.39).
- Net cash flow from operating activities EUR 84.9 million (10.4).
- Net debt EUR 181.8 million (219.8) and gearing 39.5 percent (50.5).
FULL YEAR 2012 HIGHLIGHTS
- Orders received EUR 1,970.1 million (1,896.1), +3.9 percent: Service +5.8 percent and Equipment +3.8 percent.
- Sales EUR 2,170.2 million (1,896.4), +14.4 percent: Service +11.0 percent and Equipment +17.5 percent.
- Operating profit before restructuring costs EUR 137.9 million (117.2), 6.4 percent (6.2) of sales, +17.7 percent.
- Restructuring costs EUR 5.8 million (10.3).
- Operating profit including restructuring costs EUR 132.1 million (106.9), 6.1 percent of sales (5.6).
- Earnings per share (diluted) EUR 1.46 (1.10), +32.4 percent.
- Net cash flow from operating activities EUR 159.2 million (-20.8).
- Dividend proposed by Board of Directors is EUR 1.05 (1.00) per share.
MARKET OUTLOOK
Demand forecasting continues to be challenging due to macroeconomic uncertainties. Our current offer base indicates a stable or slightly higher near-term demand compared to the fourth quarter of 2012. However, due to the timing of large crane projects, the quarterly Equipment order intake will fluctuate.
FINANCIAL GUIDANCE
Based on the offer base and the near-term demand outlook, the year 2013 sales is expected to be stable or slightly higher than in 2012. We expect the 2013 operating profit to improve from 2012.
President and CEO Pekka Lundmark,
"I am pleased with many aspects of our performance in 2012. In a marketplace where uncertainty and customers' hesitation to make decisions has become the new norm, a 14 percent growth in sales to a new record level of EUR 2,170 million was a good achievement. Operating profit before restructuring costs rose by 18 percent to EUR 138 million and earnings per share 32 percent to EUR 1.46. Cash flow was strong, reducing our gearing to below 40 percent. All in all, 2012 was a good year, but we aim higher.
A year ago, we decided that our service business should prioritize profitability over growth in the short term. The reason was clear: heavy investments in growth, combined with execution issues, had resulted in an EBIT margin of only 7.0 percent in 2011. The results of this prioritization are encouraging, as the 2012 EBIT margin improved to 8.4 percent. Things are moving in the right direction, but obviously we cannot be satisfied with this level yet. There is still profitability improvement potential in numerous areas of our network, which currently includes over 600 service locations in 47 countries.
The profitability of the equipment business developed satisfactorily in a challenging market environment during the first three quarters of 2012, but the last quarter was weaker. There were both market structure issues, such as low industrial cranes demand in some Western markets, and various operational issues. We are now prioritizing profitability over growth in the equipment business in the same way that we did in the service business a year ago. We announced restructuring measures at the beginning of the year, with the main objective of reallocating resources from Western markets to emerging ones.
Forecasting demand development has rarely been as difficult as it is right now. In our Q3 report, we said that there were signs of weakening demand after a strong first half of the year. This was also evident in a slight weakness in Q4 orders. However, the number of new opportunities in our pipeline is still good and has actually slightly increased in some units. This means that we are now a bit more optimistic about short-term demand than we were after Q3 last year."
The parent company’s non-restricted equity is EUR 193, 194,781.05, the net income of which for the year is EUR 111,298,139.92. The Group’s non-restricted equity is EUR 385,938,000.
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 and machine tools of all makes. In 2012, Group sales totaled EUR 2,170 million. The Group has 12,100 employees at 609 locations in 47 countries. Konecranes is listed on the NASDAQ OMX Helsinki.