KONECRANES PLC 2007 FINANCIAL STATEMENTS
Excellent 2007 Results, Favorable 2008 Outlook
- Excellent year in orders received: 1,872.0 MEUR (+27.1 %), Q4 orders: 471.0
MEUR (+28.2 %),
- Good growth in net sales: 1,749.7 MEUR (+18.0 %), Q4 sales: 522.8 MEUR
(+13.6%)
- Operating profit (excluding 17.6 MEUR capital gain) increased to 174.7 (105.5)
MEUR, margin was 10.0 (7.1) %
- Q4 operating profit (EBIT): 60.4 MEUR (+53.6%), EBIT margin 11.6 (8.5) %
- Improved return on capital employed: 50.4 (29.5) %, return on equity 51.2
(36.5) %
- Solid financial position with gearing down to 7.0 (57.3) %, Net debt 19.7
(128.2) MEUR
- Earnings per share: 2.17 (1.17) EUR, EPS excl. capital gain 1.95 EUR
- Strong cash flow from operations: 233.2 (114.2) MEUR
- Board's dividend proposal: 0.80 (0.45) EUR per share
- Double-digit sales growth targeted in 2008, potential for further EBIT margin
improvement in 2008
--------------------------------------------------------------------------------
| | Fourth quarter | | January - December |
--------------------------------------------------------------------------------
| EUR million | 10-12/ | 10-12/ | Change | 1-12/ | 1-12/ | Change |
| | 2007 | 2006 | % | 2007 | 2006 | % |
--------------------------------------------------------------------------------
| SALES | | | | | | |
--------------------------------------------------------------------------------
| Service | 172.9 | 161.4 | 7.1 | 628.6 | 526.6 | 19.4 |
--------------------------------------------------------------------------------
| Standard Lifting | 200.7 | 159.5 | 25.9 | 692.6 | 558.4 | 24.0 |
--------------------------------------------------------------------------------
| Heavy Lifting | 187.6 | 162.7 | 15.3 | 549.0 | 490.8 | 11.8 |
--------------------------------------------------------------------------------
| Internal Sales | (38.4) | (23.5) | 63.3 | (120.3) | (93.3) | 29.0 |
--------------------------------------------------------------------------------
| Sales total | 522.8 | 460.1 | 13.6 | 1,749.7 | 1,482.5 | 18.0 |
--------------------------------------------------------------------------------
| Operational | 60.4 | 39.3 | 53.6 | 174.7 | 105.5 | 65.7 |
| profit | | | | | | |
--------------------------------------------------------------------------------
| Operational | 11.6 % | 8.5 % | | 10.0 % | 7.1 % | |
| profit margin | | | | | | |
--------------------------------------------------------------------------------
| Gain on the sale | 0.0 | 0.0 | | 17.6 | 0.0 | |
| of real estate | | | | | | |
--------------------------------------------------------------------------------
| Operating profit | 60.4 | 39.3 | 53.6 | 192.3 | 105.5 | 82.3 |
| (EBIT) | | | | | | |
--------------------------------------------------------------------------------
| EBIT margin | 11.6 % | 8.5 % | | 11.0 % | 7.1 % | |
--------------------------------------------------------------------------------
| Share of result | 0.1 | 0.3 | | 0.7 | 0.7 | |
| of associates and | | | | | | |
| joint ventures | | | | | | |
--------------------------------------------------------------------------------
| Interests, net | (1.3) | (2.1) | | (8.5) | (9.5) | |
--------------------------------------------------------------------------------
| Other financial | (2.3) | (0.9) | | (5.7) | (1.6) | |
| income and | | | | | | |
| expenses | | | | | | |
--------------------------------------------------------------------------------
| Profit before | 56.9 | 36.6 | 55.3 | 178.8 | 95.1 | 88.0 |
| taxes | | | | | | |
--------------------------------------------------------------------------------
| Taxes | (14.3) | (9.0) | | (49.6) | (26.5) | |
--------------------------------------------------------------------------------
| Net profit for | 42.6 | 27.6 | 54.0 | 129.2 | 68.6 | 88.3 |
| the period | | | | | | |
--------------------------------------------------------------------------------
| Earnings per | 0.71 | 0.48 | 50.3 | 2.17 | 1.17 | 84.5 |
| share, basic | | | | | | |
| (EUR) | | | | | | |
--------------------------------------------------------------------------------
| Earnings per | 0.70 | 0.46 | 51.5 | 2.13 | 1.15 | 85.9 |
| share, diluted | | | | | | |
| (EUR) | | | | | | |
--------------------------------------------------------------------------------
| ORDERS RECEIVED | | | | | | |
--------------------------------------------------------------------------------
| Service | 137.8 | 122.5 | 12.6 | 563.0 | 448.5 | 25.5 |
--------------------------------------------------------------------------------
| Standard Lifting | 196.4 | 137.7 | 42.7 | 793.8 | 592.7 | 33.9 |
--------------------------------------------------------------------------------
| Heavy Lifting | 168.6 | 128.8 | 30.9 | 633.9 | 519.2 | 22.1 |
--------------------------------------------------------------------------------
| Internal Orders | (31.8) | (21.4) | | (118.7) | (87.7) | |
--------------------------------------------------------------------------------
| Orders received | 471.0 | 367.5 | 28.2 | 1,872.0 | 1,472.8 | 27.1 |
| Total | | | | | | |
--------------------------------------------------------------------------------
| Order Book at end | | | | 757.9 | 571.6 | 32.6 |
| of period | | | | | | |
--------------------------------------------------------------------------------
President and CEO Pekka Lundmark's comments on 2007 performance
Year 2007 was again excellent for Konecranes. Our strong growth continued for
the third year in a row. Between 2004 and 2007 our sales have almost tripled, to
more than EUR 1.7 billion. We now estimate our share of the relevant market to
be approximately 15 percent. We have increased our operating profit over the
same period almost six-fold, from EUR 31 million to EUR 175 million.
Our growth this year - 18 percent - was mostly organic. While we continued to
integrate the two large acquisitions that generated roughly half of our growth
in 2006, the new acquisitions - eight in all - were small service and technology
companies. As an example I want to mention the acquisition of Savcor One, a
software company that develops container positioning and equipment automation
applications designed to improve our customers' container handling efficiency.
Konecranes continued to enjoy well-balanced growth across its various business
areas and regions. Sales growth was strongest in Europe, Middle East & Africa,
and all regions achieved double-digit growth. The fastest order growth took
place in Asia-Pacific, but Europe, Middle East & Africa and Americas also posted
excellent growth. We continued to expand our business in the world's fast
developing markets. We have already had a good presence in China for a few
years. Another important milestone was passed in our emerging markets strategy
by entering the Indian market with a startup operation that grew from zero to 50
people during the year. Significant progress was made in another high-potential
market, Russia, where we received a large number of new orders in the second
half of the year. We intend to continue to expand our geographical reach.
Our group profitability development met our expectations, even though growth
here was uneven. Standard Lifting and Service made excellent progress. The Heavy
Lifting supply chain can still be improved.
The Group's 10 % EBIT margin target was already met less than a year after the
target was raised. The progress from the previous year's 7.1 percent is
significant. Profit growth combined with further improved capital efficiency
generated a 50.4 percent return on the total capital employed.
The turbulence on the financial markets in the second half of the year did not
seem to impact our demand. Our 27 percent growth in new orders exceeded the 18
percent sales growth, which means that we start the new year with an order book
32.6 percent stronger than a year ago. These promising numbers indicate
continued growth in 2008, and we also believe that there is potential for
further improvement in our margins. However, it is now more difficult to
forecast development for the next few years although the long-term fundamentals
in our macro environment continue to be strong. As long as economically sound
industrial or logistics investments are able to find funding at reasonable
terms, our business should continue to develop well. A widespread recession that
would significantly reduce investments would of course hurt our market, too.
Regardless of the general economic development, our goal is to continue to
increase our share of a market that is still very fragmented. In the services
market alone, we estimate that more than EUR 10 billion is spent globally to
service and maintain cranes. This market is significantly less cyclical than the
new equipment market. Only some 30 percent of this market is open today, i.e.
the crane owner has outsourced maintenance to companies like Konecranes. In
addition to the general market growth, there is a clear trend towards
outsourcing. Our company is best positioned to take advantage of this
development, and we therefore expect that services will be a genuine growth
business for a long time to come. More than half of our sales in North America
are generated by services, reducing our vulnerability to a potential economic
downturn.
Board of Directors' Report
Konecranes financial performance continued to develop favorably in 2007. All
geographical regions and Business Areas posted strong order and sales growth.
Total sales growth was robust at 18 percent, and profitability improved for the
fourth consecutive year. Return on equity was as high as 51.2 percent. As
Konecranes business model is very cash generative, the company was able to
reduce net debt from EUR 128.2 million to 19.7 million in 2007, despite paying
EUR 26.7 million in dividends, buying back own shares for EUR 46.0 million, and
acquiring eight companies for EUR 17.4 million. Konecranes solid financial
position ensures that it can also continue developing its operations in a less
buoyant economic environment. Konecranes has prerequisites to pursue organic
growth by gaining market share in the still very fragmented industrial crane
industry, even in case of flat or decreasing demand. Growing the business
through acquisitions is part of Konecranes' strategy, and an economic slowdown
could increase opportunities for value-adding acquisitions. The trend of
outsourcing crane maintenance offers long-term growth prospects in the Service
business. Because the recruitment of service technicians is the major challenge
in expanding the service operations, a less competitive labor market could help
fuel service growth. The development in 2007 strengthened Konecranes'
competitiveness and ability to successfully cope with future challenges.
Change in Reporting Method 2007
Due to changes in the Business Area reporting method described below, the sales,
orders and operating profit comparison figures in this report deviate from the
figures reported in 2006 for the Business Areas Service and Standard Lifting.
The aggregate and Heavy Lifting figures are not affected.
As of January 1, 2007, Konecranes-branded spare parts are reported in the
Service Business Area, where previously they were partly included in Service and
partly in Standard Lifting. The 2006 quarterly comparison figures for Service
and Standard Lifting according to the new reporting structure are presented in
the table below.
--------------------------------------------------------------------------------
| | Q1 2006 | Q2 2006 | Q3 2006 | Q4 2006 | 2006 |
--------------------------------------------------------------------------------
| Service | | | | | |
--------------------------------------------------------------------------------
| Orders received, | 99.8 | 108.3 | 117.9 | 122.5 | 448.5 |
| MEUR | | | | | |
--------------------------------------------------------------------------------
| Net sales, MEUR | 105.6 | 122.9 | 136.6 | 161.4 | 526.5 |
--------------------------------------------------------------------------------
| Operating income, | 8.7 | 12.3 | 14.4 | 17.6 | 53.0 |
| MEUR | | | | | |
--------------------------------------------------------------------------------
| Operating margin, % | 8.2 | 10.0 | 10.5 | 10.9 | 10.1 |
--------------------------------------------------------------------------------
| Standard Lifting | | | | | |
--------------------------------------------------------------------------------
| Orders received, | 142.6 | 155.3 | 157.2 | 137.7 | 592.7 |
| MEUR | | | | | |
--------------------------------------------------------------------------------
| Net sales, MEUR | 114.0 | 131.7 | 153.2 | 159.5 | 558.4 |
--------------------------------------------------------------------------------
| Operating income, | 8.0 | 12.0 | 15.3 | 16.2 | 51.5 |
| MEUR | | | | | |
--------------------------------------------------------------------------------
| Operating margin, % | 7.0 | 9.1 | 10.0 | 10.2 | 9.2 |
--------------------------------------------------------------------------------
In addition, the geographical segment reporting structure has been changed from
the beginning of 2007. The new geographical segments are Europe, Middle East,
Africa (EMEA), Americas (AME) and Asia-Pacific (APAC). The earlier structure was
Nordic and Eastern Europe, EU (excl. Nordic), Americas, and Asia-Pacific. The
2006 quarterly sales comparison figures according to the new geographical
segmentation are presented in the table below.
--------------------------------------------------------------------------------
| | Q1 2006 | Q2 2006 | Q3 2006 | Q4 2006 | 2006 |
--------------------------------------------------------------------------------
| EMEA | 170.1 | 195.3 | 187.9 | 227.8 | 781.1 |
--------------------------------------------------------------------------------
| AME | 90.1 | 105.8 | 148.0 | 168.5 | 512.4 |
--------------------------------------------------------------------------------
| APAC | 36.6 | 38.8 | 50.0 | 63.8 | 189.2 |
--------------------------------------------------------------------------------
| Total | 296.7 | 339.9 | 385.8 | 460.1 | 1482.5 |
--------------------------------------------------------------------------------
The restated 2006 APAC sales figures differ from the figures reported in 2006 as
sales in Africa and the Middle East have been shifted from APAC to EMEA.
Sale of Real Estate
Konecranes finalized the sale of properties located in Hyvinkää, Hämeenlinna and
Urjala, Finland, in April 2007. The Konecranes companies operating in the sold
facilities in Hyvinkää and Hämeenlinna have continued their normal operations in
these facilities under long-term rental agreements.
The aggregate sales price for the facilities was approximately EUR 31.4 million.
Konecranes booked a capital gain of EUR 17.6 million in EBIT on the transaction.
Group Structure
MMH Holdings, Inc, operating under the well-known P&H brand, was consolidated
into the Konecranes Group figures as of 1 June, 2006. Therefore, the comparison
figures for 2006 include MMH only for the period June-December. The MMH
operations in January-May 2007 account for roughly 5 percentage points of the
reported 18 percent sales growth and the 27 percent order growth in 2007.
Approximately 60 percent of MMH sales and orders are included in the Service
Business Area, and the remainder is fairly evenly split between Standard Lifting
and Heavy Lifting.
Acquisitions
Konecranes made eight acquisitions in 2007. In January, the straddle carrier
manufacturer Consens Transport Systeme of Germany, and the maintenance service
business of the small Swedish-based company, El&Travers were acquired. In March,
Konecranes made an asset purchase agreement with the Spanish company Sistemas de
Elevación, operating in the field of port service. In June, Konecranes signed an
agreement to acquire 19 percent of the share capital of the crane manufacturing
company Dynamic Crane Systems Ltd (DCS) in South Africa. The agreement includes
an option to acquire the remaining shares in the company at a later stage. In
July, Konecranes acquired Finnish container handling software specialist Savcor
One Oy. During July, Konecranes also further strengthened its position in the
machine tool service (MTS) business by acquiring two MTS companies in
Scandinavia, Reftele Maskinservice AB in Sweden and Kongsberg Automation AS in
Norway. In July, the port service business of the Italian company Technical
Services S.r.l. was acquired. The acquired businesses accounted for EUR 12.2
million in net sales and -1.4 million in operating profit in 2007. Significant
costs in developing the Straddle Carrier operations caused the negative result
of the acquired businesses.
Market Review
Market demand for Konecranes' products and services developed favorably
throughout 2007 in all geographical regions and Business Areas. Demand grew
strongest in emerging markets. Demand for process cranes, industrial cranes and
crane components improved on increasing industrial output and investments in new
production capacity. Demand for container-handling and other port equipment
benefited from high port investments. Demand for crane and machine tool service
increased on continuing outsourcing of service. Almost all Konecranes' main
customer industries contributed to improved demand, with shipyards, harbors,
primary metals, power and petrochemicals continuing to boost demand. Investment
activity in the paper and automotive industries remained at a low level. Demand
for both standard and heavy lifting equipment improved in all geographical
regions.
Input prices, in particular steel and labor costs, rose from the previous year.
This resulted in upward pressure on market prices for cranes and crane
maintenance as suppliers endeavored to pass on the higher costs to customers.
The tight labor market also led to difficulties in attracting and retaining
skilled labor, particularly in markets with a strong representation of
petrochemical, primary metal and mining industries.
Konecranes' strong sales and order growth leads management to believe that it
continued to increase its global market shares.
Orders Received, Order Book and Contract Base
In 2007, order intake grew by 27.1 percent to EUR 1,872.0 (1,472.8) million.
Konecranes' organic order growth exceeded 20 percent for the third consecutive
year. Higher prices accounted for 4-5 percentage points of the order increase.
The year-end value of the order backlog was 757.9 (571.6) million, up by 32.6
percent from the end of 2006. Changes in currency rates, primarily the
devaluation of the USD against the euro, had a negative impact on the reported
growth in orders and the order book. Konecranes continued to capitalize on the
trend of outsourcing service. The annual value of the maintenance contract base
rose more than 15 percent to EUR 106.4 million and included 292,139 (263,039)
units at the end of 2007. The retention rate for maintenance contracts remained
above 90 percent.
Higher demand in most customer segments, Konecranes' expanding geographical
presence and our broader, competitive product range contributed to growth in
orders. Orders increased in all geographical regions across all Business Areas.
Geographically the Asia-Pacific region posted the strongest growth. Emerging
markets in the EMEA region, particularly Russia and the Middle East, contributed
to the region's solid order growth. Order intake in the Americas region grew by
nearly 20 percent, and organic growth was close to five percent despite the
devaluation of the US dollar.
Standard Lifting benefited from growing demand in general manufacturing,
engineering and petrochemicals, both in emerging and mature markets.
Strong demand in general manufacturing, ports, shipyards, and the metals and
power customer segments supported order growth in Heavy Lifting.
In Service, the personnel increase enabled high order intake. The reported order
growth in Service was boosted by the MMH service business, which was included
for only seven months in 2006.
Orders Received by Business Areas, MEUR
--------------------------------------------------------------------------------
| | Q4 2007 | Q4 2006 | Change | 2007 | 2006 | Change |
| | | | percent | | | percent |
--------------------------------------------------------------------------------
| Service | 137.8 | 122.5 | +12.6 | 563.0 | 448.5 | +25.5 |
--------------------------------------------------------------------------------
| Standard | 196.4 | 137.7 | +42.7 | 793.8 | 592.7 | +33.9 |
| Lifting | | | | | | |
--------------------------------------------------------------------------------
| Heavy Lifting | 168.6 | 128.8 | +30.9 | 633.9 | 519.2 | +22.1 |
--------------------------------------------------------------------------------
| Internal | (31.8) | (21.4) | | (118.7) | (87.7) | |
--------------------------------------------------------------------------------
| Total | 471.0 | 367.5 | +28.2 | 1,872.0 | 1,472.8 | +27.1 |
--------------------------------------------------------------------------------
In the fourth quarter, order intake totaled EUR 471.0 (367.5) million,
representing growth of 28.2 percent. Order growth was exceptionally strong in
both Standard Lifting and Heavy Lifting, and it was almost exclusively organic.
Service orders continued to increase at a stable, double-digit rate.
Fourth quarter order intake was especially strong in the Asia-Pacific region,
boosted by an order for 173 cranes to India. In EMEA, order growth continued at
a high level. Order growth also continued at a good level in the Americas region
except in port equipment, but the weaker USD/EUR rate subdued order growth.
Order Book by Business Areas, MEUR
--------------------------------------------------------------------------------
| | Dec 31, 2007 | Dec 31, 2006 | Change % |
--------------------------------------------------------------------------------
| Service | 109.3 | 101.1 | 8.2 |
--------------------------------------------------------------------------------
| Standard Lifting | 270.9 | 174.6 | 55.1 |
--------------------------------------------------------------------------------
| Heavy Lifting | 406.1 | 349.9 | 16.1 |
--------------------------------------------------------------------------------
| Internal | (28.4) | (53.9) | |
--------------------------------------------------------------------------------
| Total | 757.9 | 571.6 | 32.6 |
--------------------------------------------------------------------------------
Sales
Net sales rose 18.0 percent to EUR 1,749.7 (1,482.5) million. Growth was
predominantly organic. Price increases accounted for 4-5 percentage points of
growth, as higher input costs were successfully compensated by higher sales
prices. Currency rate changes had a negative impact on the reported sales
figures.
Standard Lifting achieved the fastest growth on improving demand and higher
market shares. Production was successfully increased, but due to the
exceptionally strong order intake in 2006 and 2007, output did not quite rise as
much as orders. As production ramp-up for hoists and other components was faster
than for industrial cranes, the sales mix shifted towards more components.
Sales in Heavy Lifting rose thanks to a high order book at the beginning of
2007, continued strong demand and a broader product range. The tight market for
certain raw materials and a wide range of subcontracted components subdued sales
growth. Also bottlenecks in production caused delays.
Service sales rose strongly as new technicians were recruited and the service
network expanded. The MMH service business boosted service sales growth, having
been included for only seven months in 2006.
Net Sales by Business Area, MEUR
--------------------------------------------------------------------------------
| | Q4 2007 | Q4 2006 | Change | 2007 | 2006 | Change |
| | | | percen | | | percent |
| | | | t | | | |
--------------------------------------------------------------------------------
| Service | 172.9 | 161.4 | 7.1 | 628.6 | 526.6 | 19.4 |
--------------------------------------------------------------------------------
| Standard | 200.7 | 159.5 | 25.9 | 692.6 | 558.4 | 24.0 |
| Lifting | | | | | | |
--------------------------------------------------------------------------------
| Heavy Lifting | 187.6 | 162.7 | 15.3 | 549.0 | 490.8 | 11.8 |
--------------------------------------------------------------------------------
| Internal | (38.4) | (23.5) | | (120.3) | (93.3) | |
--------------------------------------------------------------------------------
| Total | 522.8 | 460.1 | 13.6 | 1,749.7 | 1,482.5 | 18.0 |
--------------------------------------------------------------------------------
Sales growth was fastest in the Europe, Middle East, Africa (EMEA) region with
Russia and the Middle East contributing strongly. Reported sales growth in the
Americas region was boosted by the MMH business, which is included for 12 months
compared with seven months in 2006, but the weaker USD/EUR rate had a negative
impact. The Asia-Pacific region posted solid sales growth with Service revenue
and the Standard Lifting business growing strongly. However, deliveries of
large-scale projects in Heavy Lifting were at a low level in the second half of
2007, which subdued 2007 growth in APAC.
Net Sales by Region, MEUR
--------------------------------------------------------------------------------
| | Q4 2007 | Q4 2006 | Change | 2007 | 2006 | Change |
| | | | percen | | | percent |
| | | | t | | | |
--------------------------------------------------------------------------------
| EMEA | 297.6 | 227.8 | 30.6 | 951.4 | 781.0 | 21.8 |
--------------------------------------------------------------------------------
| AME | 159.6 | 168.5 | (5.3) | 589.7 | 512.3 | 15.1 |
--------------------------------------------------------------------------------
| APAC | 65.6 | 63.8 | 2.8 | 208.6 | 189.4 | 10.3 |
--------------------------------------------------------------------------------
| Total | 522.8 | 460.1 | 13.6 | 1,749.7 | 1,482.5 | 18.0 |
--------------------------------------------------------------------------------
Fourth quarter net sales rose 13.6 percent to EUR 522.8 (460.1) million. EMEA
posted strong growth. The significantly weaker USD rate weighed on reported
sales in the Americas region. Sales growth in APAC was low in the absence of
large-scale deliveries in Heavy Lifting.
In Service, fourth quarter sales growth was moderate. The weaker USD had a
negative impact on reported service sales since nearly half of service revenue
is generated in USD or USD-linked currencies. The recruitment of service
personnel in the second half of 2007 was not as rapid as at the end of 2006 and
first half of 2007.
Standard Lifting succeeded in raising fourth quarter production and deliveries
to a record-high EUR 200.7 million, which roughly matches the quarterly order
intake levels of 2007.
Heavy Lifting also achieved record-high fourth quarter delivery volumes despite
challenges in component supply and production capacity.
Profitability
Group operational income, excluding the EUR 17.6 million capital gain, rose 65.7
percent to EUR 174.7 (105.5) million. This represents a 10.0 percent operating
margin, up from 7.1 percent in 2006. The main drivers for improved profitability
were higher volumes and productivity, success in passing on higher input costs,
and the change in sales mix between and within the Business Areas.
Service and Standard Lifting contributed to the margin improvement since both
Business Areas achieved their over-the-cycle operating margin targets of twelve
percent. The main drivers for the margin expansion in Standard Lifting were
higher volumes and improved productivity. The shift in mix towards more
component and less industrial crane sales also contributed to the profitability
improvement. Pricing had a minor positive effect as prices more than offset the
higher input costs.
The margin improvement for Service was the result of better fixed cost
absorption, improved productivity and, to a certain extent, pricing. The high
margin in the MMH service business helped raise the service margin, since the
MMH business was included for only seven months in 2006. Heavy Lifting's
operating profit improved slightly, but the margin decreased because of several
independent factors. The development costs of starting lift truck assembly in
Lingang, China, and straddle carrier manufacturing in Germany burdened Heavy
Lifting's result. Because of tight component supply situation and some
bottlenecks in manufacturing, Heavy Lifting faced challenges in fulfilling
deliveries, which resulted in lower than expected volumes, and additional costs.
Significant cost overruns on a few large process crane projects also burdened
Heavy Lifting's profitability.
Fourth quarter operating profit (EBIT) rose to a record-high of EUR 60.4 (39.3)
million, representing 11.6 percent of net sales. The fourth quarter is
seasonally Konecranes' strongest quarter. This seasonality has, however,
decreased with geographical expansion, broadened product range, and wider
customer exposure.
In the fourth quarter, Standard Lifting almost doubled operating profit in
comparison to fourth quarter 2006 on higher volumes, improved productivity and
sales mix.
Heavy Lifting's fourth quarter operating profit rose slightly on higher volumes.
The margin rose clearly compared to the third quarter, which included a few
low-margin projects, and achieved roughly the same level as in the fourth
quarter of 2006. Challenges in the supply chain continued to weigh on the
margin, but the component supply situation eased somewhat from the third
quarter.
Operational EBIT and margin (excluding capital gain in Q2) by Business Area
--------------------------------------------------------------------------------
| | Q4 | % of | Q4 | % of | 2007 | % of | 2006 | % of |
| | 2007 | sale | 2006 | sale | MEUR | sales | MEUR | sales |
| | MEUR | s | MEUR | s | | | | |
--------------------------------------------------------------------------------
| Service | 24.3 | 14.0 | 17.6 | 10.9 | 78.7 | 12.5 | 53.0 | 10.1 |
--------------------------------------------------------------------------------
| Standard | 31.7 | 15.8 | 16.2 | 10.2 | 101.2 | 14.6 | 51.5 | 9.2 |
| Lifting | | | | | | | | |
--------------------------------------------------------------------------------
| Heavy Lifting | 15.6 | 8.3 | 14.0 | 8.6 | 34.0 | 6.2 | 33.6 | 6.8 |
--------------------------------------------------------------------------------
| ./. Group | (12.2 | (2.3 | (9.6) | (2.1 | (36.8) | (2.1) | (31.6 | (2.2) |
| overheads | ) | ) | | ) | | | ) | |
--------------------------------------------------------------------------------
| ./. | 1.0 | | 1.0 | | (2.3) | | (0.9) | |
| Elimination | | | | | | | | |
| of internal | | | | | | | | |
| profit | | | | | | | | |
--------------------------------------------------------------------------------
| Total | 60.4 | 11.6 | 39.3 | 8.5 | 174.7 | 10.0 | 105.5 | 7.1 |
--------------------------------------------------------------------------------
Group EBITDA was EUR 216.9 (128.0) million or 12.4 (8.6) percent on sales.
Depreciations grew from EUR 22.3 million to EUR 24.0 million.
The share of associated companies result amounted to EUR 0.7 (0.7) million.
Group interest costs (the net of interest income and expenses) were EUR 8.5
(9.5) million.
Financial costs (net of expenses and income) were EUR 14.3 (11.1) million.
Group profit before taxes was EUR 178.8 (95.1) million. Income taxes were EUR
49.6 (26.5) million corresponding to an effective tax rate of 27.8 (27.9)
percent for the year.
Group net income was EUR 129.2 (68.6) million. Basic earnings per share totaled
EUR 2.17 (1.17) and diluted earnings per share were EUR 2.13 (1.15). Excluding
the capital gain from the sale of real estate, basic earnings per share were EUR
1.95 and diluted EPS were EUR 1.92. Net income in the fourth quarter was EUR
42.6 (27.6) million or EUR 0.71 (0.48) in basic earnings per share.
The Group's return on capital employed was 50.4 (29.5) percent and return on
equity was 51.2 (36.5) percent.
Group costs
Unallocated Group overhead costs were EUR 36.8 (31.6) million, representing 2.1
(2.2) percent of net sales. These costs consist mainly of research &
development, information technology, marketing & communications, finance, legal,
human resources, mergers & acquisitions, and general Group management and
administration functions.
Cash flow and balance sheet
Cash flow from operations before financing items and taxes more than doubled to
EUR 233.2 (114.2) million, representing EUR 3.91 (1.96) per share. Higher
profits and improved working capital management supported the strong cash flow
development.
Cash flow from financing items and taxes was EUR -49.7 (-32.8) million. Net cash
flow from operating activities was EUR 183.5 (81.4) million, representing EUR
3.08 (1.39) per share.
In total, EUR 36.9 (66.1) million in cash was used to cover capital expenditure
including acquisitions. The sale of fixed assets including real estate amounted
to EUR 32.3 (1.2) million. The cash-based capital expenditures in fixed assets
were EUR 22.5 (17.1) million.
Cash flow before financing activities was EUR 179.1 (16.6) million.
Fourth quarter 2007 cash flow before financing activities was strong at EUR 90,5
million.
The parent company paid EUR 26.7 (15.8) million in dividends.
During 2007, EUR 46.0 million was used to repurchase Konecranes shares.
Group interest-bearing debt was EUR 77.6 (173.3) million, and interest-bearing
net debt was EUR 19.7 (128.2) million. Gearing was 7.0 (57.3) percent.
The Solidity (equity) ratio was 36.1 (28.3) percent, and the current ratio was
1.3 (1.4).
The Group has a EUR 200 million committed back-up financing facility to secure
running liquidity. At year-end, EUR 27.2 (100.9) million was in use.
Currency rates and sensitivity
Changes in currency exchange rates had a negative effect on reported sales,
order and profits. Currency hedging absorbed part of the impact of the stronger
euro.
The annual negative impact of a one percent weakening of the USD/EUR rate is
slightly more than one million euros in pre-tax profits. This includes both
transactional and translation effects.
The Group continued its currency risk management policy of hedging. The aim of
the hedging policy is to minimize currency risk relating to non-euro nominated
export and import from or to the euro zone. Hedging was mainly carried out
through currency forward exchange transactions.
Repurchase of Konecranes shares and shares in the company's possession
On the basis of the authorization of the 2007 AGM, Konecranes Board of Directors
decided to commence repurchasing shares at the earliest on 8 November, 2007.
Between November 8, 2007 and January 4, 2008 Konecranes repurchased 1,800,000
shares at the average share price of EUR 26.44. In total EUR 47.6 million was
used for share repurchases, of which EUR 46.0 million was used in 2007. At the
end of 2007, Konecranes had 2,473,000 own shares in its possession,
corresponding to 4.06 percent of the shares and votes.
Capital expenditure
Group capital expenditure excluding acquisitions was EUR 25.2(16.3) million.
This capital expenditures consisted mainly of replacement or capacity expansion
investments on machines, equipment and information technology. Capital
expenditure in acquisitions was EUR 17.4 (51.2) million.
Research and development
Total direct research and development costs in the Group were EUR 16.2 (12.5)
million. R&D expenditure includes product development projects aimed at
improving the quality and cost-efficiency of both products and services.
R&D expenditure is not allocated to the Business Areas, but reported in Group
overheads, except for Stahl Crane Systems' R&D expenses, which are included in
the Standard Lifting Business Area.
Personnel and personnel development
At the end of 2007, the Group employed 8,404 (7,549) persons. The average number
of personnel was 8,005 (6,859). Most of the increase in personnel relates to the
expansion in Service.
On average, the Group recorded somewhat over three training days per employee.
The main corporate wide-development program is the three-year Konecranes Academy
aimed for middle management and experts. The development program for the top
management was continued.
Personnel by Business Area, end of period
--------------------------------------------------------------------------------
| | 2007 | 2006 | Change |
| | | | percent |
--------------------------------------------------------------------------------
| Service | 4,436 | 3,923 | +13 |
--------------------------------------------------------------------------------
| Standard Lifting | 2,479 | 2,333 | +6 |
--------------------------------------------------------------------------------
| Heavy Lifting | 1,272 | 1,131 | +12 |
--------------------------------------------------------------------------------
| Group Staff | 217 | 162 | +34 |
--------------------------------------------------------------------------------
| Total | 8,404 | 7,549 | +11 |
--------------------------------------------------------------------------------
Important appointments
The Group Executive Board (GXB) consisted of the following members at the
beginning of 2007:
Pekka Lundmark, President and CEO
Business Area Presidents:
Hannu Rusanen, Service
Pekka Päkkilä, Standard Lifting
Mikko Uhari, Heavy Lifting
Region Presidents:
Pierre Boyer, Europe, Middle East & Africa (EMEA)
Tom Sothard, Americas (AME)
Harry Ollila, Northeast Asia (NEA)
Edward Yakos, Southeast Asia-Pacific (SAP)
Function Directors:
Teuvo Rintamäki, Chief Financial Officer, until 20 August 2007.
Sirpa Poitsalo, Director, General Counsel
Arto Juosila, Director, Administration and Business Development, until December
31, 2007.
Mikael Wegmüller, Director, Marketing and Communications
Peggy Hansson, Director, Competence Development, until 4 December 2007.
Ari Kiviniitty, Chief Technology Officer
Teo Ottola was appointed CFO as of 20 August, 2007. He replaced Teuvo Rintamäki
on the GBX.
Jaana Rinne was appointed Director, talent management, and member of the GXB as
of December 4, 2007.
After the period under review, Pekka Lettijeff was appointed Chief Procurement
Officer as of January 21, 2008.
Risks and risk management
Risk management is part of the Konecranes' control system. In order to further
increase transparency, and in anticipation of the upcoming new requirements,
Konecranes has decided to expand its risk descriptions.
The purpose of risk management is to ensure that the risks related to the
business operations of the Group are identified and managed adequately and
appropriately so that the continuity of the business is safeguarded at all
times.
The Group's risk management principles provide a basic framework for risk
management in Konecranes. Based on these principles, each Group company or
operating unit is responsible for its own risk management. This method
guarantees the best possible knowledge of local conditions, experiences and
individual aspects of relevance. The Group co-ordinates and consults in issues
related to risk management, and decides on how to handle methods for joint or
extensive risk management (e.g. global insurance programs, Group treasury, IT
infrastructure and system architecture).
According to these principles, risk management is a continuous and systematic
activity targeted to protect from personal injury, safeguard the assets of all
Group companies and the whole Group, and to ensure stable and profitable
financial performance. By minimizing losses due to realized risks, and
optimizing the costs of risk management, the long-term competitiveness of the
Group companies and the whole Group are safeguarded.
According to the risk management principles, the Group continuously reviews its
insurance policies as part of its overall risk management. Insurance contracts
are used to sufficiently cover risks that are economically or otherwise
reasonably insurable.
Konecranes' operations are affected by various strategic, operational, financial
and damage risks. The next section briefly describes Konecranes' most
significant risks.
The demand for Konecranes products and services is affected by the development
of the overall global economy, as well as the business cycles of Konecranes'
customer industries.
The ongoing development of the Group's operational model from traditional
manufacturing to increasingly supply chain driven activity creates various risks
related to e.g. component costs, quality, availability and stock values.
Konecranes recognizes that some key subcontractors also impose continuity risks.
There are specific risks involved with the different aspects of production -
e.g. production capacity management, operational efficiency, continuity and
quality. There are also various threats and opportunities related to the
development of new products and services.
The ability to recruit and retain personnel is of key importance for the success
of Konecranes. Failure to do so may adversely affect Konecranes ability to
execute its strategy.
Konecranes' manufacturing and supplier networks in developing countries, as well
as business in emerging markets could be adversely affected by sudden changes in
the political, economic or regulatory framework in these areas.
Unsuccessful acquisitions or unsuccessful integration of acquired companies
could result in decreased profitability or hamper the implementation of the
Group's strategy.
Konecranes' operations are dependent on the availability, reliability and
quality of information, as well its confidentiality and integrity. Information
security problems and incidents may adversely affect business performance.
Konecranes may be subject to various legal actions, claims and other proceedings
in various countries. These actions, claims and other proceedings are typical
for this industry and consistent with a global business offering that
encompasses a wide range of products and services. These matters may involve
contractual disputes, warranty claims, product liability (including design
defects, manufacturing defects, failure to warn and asbestos legacy),
employment, auto liability and other matters involving claims of general
liability.
The Group's global business operations involve financial risks in the form of
market, credit and liquidity risks. The most significant market risk is currency
risk related to both foreign currency transactional and translational risk. The
US dollar clearly has the biggest impact, and a 1%-point decrease (increase) in
the EUR/USD rate would have a negative (positive) operating profit effect of
slightly more than one million euros. This estimate is based on the assumptions
that foreign currency transactions are not hedged and that the nominal amount of
the USD denominated foreign currency transactions for the whole calendar year
would be equal to the actual amounts outstanding at the end of the year (the
transaction exposure).
The most important damage risks include business interruption risk, occupational
health and safety-related risks, environmental risks, fire and other disasters,
natural events and premises security risks.
The most significant short-term risks for the company are the development of the
global economy and availability as well as the cost of certain subcontracted
components and materials.
Litigations
Various legal actions, claims and other proceedings are pending against the
Group in various countries. These actions, claims and other proceedings are
typical for this industry and consistent with a global business offering that
encompasses a wide range of products and services. These matters involve
contractual disputes, warranty claims, product liability (including design
defects, manufacturing defects, failure to warn and asbestos legacy),
employment, auto liability and other matters involving claims of general
liability.
While the final outcome of these matters cannot be predicted with certainty
Konecranes is of the opinion, based on the information available to date and
considering the grounds presented for such claims, available insurance coverage
and the reserves made, that the outcome of such actions, claims and other
proceedings, if unfavorable, would not have a material adverse impact on the
financial condition of the Group.
Environment
Konecranes recognizes environmental management as an important aspect in its
business and strives to conduct operations in an environmentally sound manner.
The most important environmental aspects of the Konecranes Group relate to the
use of materials, raw materials and energy consumption.
Environmental concerns are taken into account from the product development stage
onwards. Key factors in product development are the efficient use of materials,
reusability and energy efficiency in use. More than 98 percent of the material
in a typical Konecranes crane can be recycled. Konecranes' hoists and lifting
trolleys are designed to require as little space as possible and the electric
motors use inverters that increase efficiency. Increasingly, Konecranes'
equipment is used to transfer braking energy back into the grid, reducing energy
consumption. The fine-machined components used in our transmissions contribute
to extended service life and significantly reduced noise levels. Konecranes
develops crane structures that use less steel and other raw materials. Lighter
and compact designs of cranes contribute to savings in space, heating, and
operating costs in buildings and harbor platforms.
The company strives to favor products and materials that impose the lowest
possible impact on the environment in procurement choices and to pay particular
attention to keeping energy and material consumption at a low level. Local
regulations and recommendations are taken into account in waste management and
disposal. The company prioritizes developing the environmental awareness of both
own people and partners, with the aim of making environmental protection a
natural part of day-to-day operations in all of our activities.
Incentive Programs and Share Capital
At the end of 2007, Konecranes had five ongoing stock option programs (1997,
1999, 2001, 2003 and 2007). During the second quarter of 2007, Konecranes
distributed 987,500 2007A options to some 100 key employees in accordance with
the authorization given to the Board of Directors by the Annual General Meeting
in March 2007. The options entitle subscription of one Konecranes share per
option, at the subscription price of EUR 25.72 (the weighted average share price
in April 2007) per share. The subscription period for the 2007A options runs
from May 2, 2009 to April 30, 2011. The option programs include approximately
320 key employees. The terms and conditions of the stock option schemes are
available on our Investor homepage at www.konecranes.com/investor.
Pursuant to Konecranes Plc's stock option plans, 901,060 new shares were
subscribed for and registered in the Finnish Trade Register during 2007. As a
result of subscriptions of 67,600 shares prior to the 2007 AGM, Konecranes'
share capital increased by EUR 33,800 to EUR 30,072,660. In accordance with the
resolution of the AGM, the subscription price is, as of the date of the AGM,
booked in its entirety to the paid in capital. The share subscriptions made
during 2007 raised the number of shares to 60,978,780 at the end of 2007.
The remaining 1997, 1999B, 2001, 2003 and 2007 stock options at the end of the
accounting period confer entitlement to subscription to a total of 2,085,040
shares.
In 2006, the Konecranes Board approved a long-term incentive program pertaining
to Pekka Lundmark, the President and CEO of the Company. Pursuant to the
incentive program a total of 50,000 shares were sold to the President and CEO on
22 December 2006, and 50,000 shares were sold in January 2007 on terms and
conditions defined in the terms of subscription. The shares sold are subject to
a five-year transfer restriction. As part of the scheme the Company paid a
separate bonus to the Managing Director to cover the taxes levied as a result of
the arrangement.
The purpose of the incentive scheme is to motivate the President and CEO to
contribute in the best possible manner to the long-term success of the Company
and to increased shareholder value for all shareholders of the Company.
Flagging notifications
--------------------------------------------------------------------------------
| Date | Shareholder | Number of | % of | Prior |
| | | Shares | shares | flagging, % |
| | | owned | and | of shares |
| | | | votes | and votes |
--------------------------------------------------------------------------------
| 19 January,2007 | Fidelity | 4 137 578 | 6.89 | 10.02 |
| | International | | | |
| | Limited and its | | | |
| | direct and | | | |
| | indirect | | | |
| | subsidiaries | | | |
--------------------------------------------------------------------------------
| 12 March, 2007 | JPMorgan Chase & | 3 008 405 | 5.00 | |
| | Co and its | | | |
| | subsidiaries | | | |
--------------------------------------------------------------------------------
| 14 March, 2007 | JPMorgan Chase & | 2 936 245 | 4.88 | 5.00 |
| | Co and its | | | |
| | subsidiaries | | | |
--------------------------------------------------------------------------------
| 20 March, 2007 | Morgan Stanley & | 3 014 940 | 5.00 | |
| | Co International | | | |
| | Ltd | | | |
--------------------------------------------------------------------------------
| 21 March, 2007 | Morgan Stanley & | 2 010 229 | 3.33 | 5.00 |
| | Co International | | | |
| | Ltd | | | |
--------------------------------------------------------------------------------
| 29 March, 2007 | JPMorgan Chase & | 3 313 163 | 5.50 | 4.88 |
| | Co and its | | | |
| | subsidiaries | | | |
| | direct and | | | |
| | indirect | | | |
| | subsidiaries | | | |
--------------------------------------------------------------------------------
| 26 July, 2007 | Fidelity | 3 011 708 | 4.96 | 6.89 |
| | International | | | |
| | Limited | | | |
--------------------------------------------------------------------------------
| 10 August, 2007 | Fidelity | 3 211 878 | 5.29 | 4.96 |
| | International | | | |
| | Limited | | | |
--------------------------------------------------------------------------------
| 19 September, | JPMorgan Chase & | 3 020 039 | 4.97 | 5.50 |
| 2007 | Co | | | |
--------------------------------------------------------------------------------
| 22 November, 2007 | Fidelity | 2 970 165 | 4.88 | 5.29 |
| | International Ltd | | | |
--------------------------------------------------------------------------------
Change in reporting method 2008
In 2007, Konecranes-branded spare parts were mainly reported in the Service
Business Area instead of in both Service and Standard Lifting, as was previously
the case. In 2008, a similar reporting change will be made concerning the
remaining spare parts business in Standard and Heavy Lifting. This will result
in a somewhat higher margin for Service and lower margins for Standard and Heavy
Lifting.
The reported 2007 quarterly figures will be restated according to the new
reporting method in the first quarter interim report.
Long-term targets
Konecranes Group operating margin target of ten percent over the cycle was set
in February 2007. It is based on Business Area margin targets of 12 percent in
Service and Standard Lifting, and 10 percent in Heavy Lifting. As the reporting
change described above will alter the Business Area margins, the margin targets
will be reviewed and communicated in conjunction with the 2008 first quarter
interim review. Konecranes does not plan to change the Group over the cycle
operating margin target of ten percent.
Dividend proposal
The Board of Directors proposes to the AGM that a dividend of EUR 0.80 (0.45)
per share be paid for the fiscal year 2007. The dividend will be paid to
shareholders, who are entered in the company's share register maintained by the
Finnish Central Securities Depository Ltd. on the record date for payments of
dividends on March 18, 2008. The actual payment of dividend will take place on
March 28, 2008.
Future prospects
Based on the year-end order book, the order and inquiry activity in January
2008, and the short-term demand outlook described below, Konecranes targets
double-digit sales growth in 2008. There continues to be potential for a further
improvement in operating margin in 2008. We target sales growth for all three
Business Areas in 2008.
Due to the increased uncertainty in the global economy, forecasting demand for
lifting equipment is more difficult now than it has been in recent years. The
uncertainty mainly concerns equipment, since demand for service is expected to
continue increasing. In the long term, demand for lifting equipment is expected
to increase strongly in many key customer segments including harbors, power,
petrochemical, mining, metals, transport, shipping and refuse handling. Also the
shorter-term outlook for many of these industries is favorable, particularly in
the rapidly expanding economies. In order to take advantage of these
opportunities we continue to extend our geographical coverage.
In 2008, demand for lifting equipment is anticipated to increase in the
Asia-Pacific region in all key customer segments. In Western Europe, demand in
general manufacturing is expected to stabilize at a high level. However, demand
in Russia, Eastern Europe and the Middle East, as well as demand in many of the
growth industries mentioned above, is expected to continue improving. In North
America, port investment is expected to ease from the good levels of 2006 and
2007. Regarding other customer segments in North America, there are no clear
signs of a major change in demand, but taking the weakened outlook of the U.S.
economy into consideration, demand is anticipated to stabilize at a high level.
The year-end order book in Standard Lifting represents approximately four months
of sales, which forms a strong base for sales growth in 2008. Heavy Lifting
started 2008 with a 16 percent higher order book than in the previous year.
Based on scheduled deliveries, Heavy Lifting's 2008 net sales are targeted to
achieve solid growth. Service sales and order intake are anticipated to continue
growing at a rate in excess of ten percent.
Helsinki February 8, 2008
Konecranes Plc
Board of Directors
Disclaimer
Certain statements in this report, which are not historical fact, including,
without limitation those regarding expectations for market growth and
developments, expectations for growth and profitability and statements preceded
by "believes", "expects", "anticipates", "foresees" or similar expressions, are
forward-looking statements. Therefore, they involve risks and uncertainties,
which may cause actual results to materially differ from the results expressed
in such forward-looking statements. Such factors include but are not limited to
the company's own operating factors, industry conditions and general economic
conditions.
--------------------------------------------------------------------------------
| CONSOLIDATED STATEMENT OF INCOME - | | | | |
| IFRS | | | | |
--------------------------------------------------------------------------------
| EUR million | 9-12/ | 9-12/ | Change | 1-12/ | 1-12/ | Change |
| | 2007 | 2006 | % | 2007 | 2006 | % |
--------------------------------------------------------------------------------
| Sales | 522.8 | 460.1 | 13.6 | 1 749.7 | 1 482.5 | 18.0 |
--------------------------------------------------------------------------------
| Other operating | 0.8 | 0.5 | | 20.3 | 2.0 | |
| income | | | | | | |
--------------------------------------------------------------------------------
| Depreciation and | (6.9) | (6.9) | | (24.6) | (22.5) | |
| impairments | | | | | | |
--------------------------------------------------------------------------------
| Other operating | (456.3 | (414.3) | | (1 | (1 | |
| expenses | ) | | | 553.1) | 356.5) | |
--------------------------------------------------------------------------------
| Operating profit | 60.4 | 39.3 | 53.6 | 192.3 | 105.5 | 82.3 |
--------------------------------------------------------------------------------
| Share of result | 0.1 | 0.3 | | 0.7 | 0.7 | |
| of associates and | | | | | | |
| joint ventures | | | | | | |
--------------------------------------------------------------------------------
| Financial income | (3.6) | (3.0) | | (14.3) | (11.1) | |
| and expenses | | | | | | |
--------------------------------------------------------------------------------
| Profit before | 56.9 | 36.6 | 55.3 | 178.8 | 95.1 | 88.0 |
| taxes | | | | | | |
--------------------------------------------------------------------------------
| Taxes | (14.3) | (9.0) | | (49.6) | (26.5) | |
--------------------------------------------------------------------------------
| Net profit for | 42.6 | 27.6 | 54.0 | 129.2 | 68.6 | 88.3 |
| the period | | | | | | |
--------------------------------------------------------------------------------
| Net profit for | | | | | | |
| the period | | | | | | |
| attributable to : | | | | | | |
--------------------------------------------------------------------------------
| Shareholders of | 42.6 | 27.6 | | 129.2 | 68.6 | |
| the parent | | | | | | |
| company | | | | | | |
--------------------------------------------------------------------------------
| Minority interest | 0.0 | 0.0 | | 0.0 | 0.0 | |
--------------------------------------------------------------------------------
| Earnings per | 0.71 | 0.48 | 50.3 | 2.17 | 1.17 | 84.5 |
| share, basic | | | | | | |
| (EUR) | | | | | | |
--------------------------------------------------------------------------------
| Earnings per | 0.70 | 0.46 | 51.5 | 2.13 | 1.15 | 85.9 |
| share, diluted | | | | | | |
| (EUR) | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CONSOLIDATED BALANCE SHEET - IFRS | |
--------------------------------------------------------------------------------
| EUR million | | |
--------------------------------------------------------------------------------
| ASSETS | 31.12.2007 | 31.12.2006 |
--------------------------------------------------------------------------------
| Non-current assets | | |
--------------------------------------------------------------------------------
| Goodwill | 56.8 | 54.0 |
--------------------------------------------------------------------------------
| Other intangible assets | 59.4 | 55.0 |
--------------------------------------------------------------------------------
| Property, plant and equipment | 61.9 | 67.5 |
--------------------------------------------------------------------------------
| Advance payments and construction in progress | 4.7 | 9.6 |
--------------------------------------------------------------------------------
| Investments accounted for using the equity | 6.3 | 6.3 |
| method | | |
--------------------------------------------------------------------------------
| Available-for-sale investments | 2.4 | 2.1 |
--------------------------------------------------------------------------------
| Long-term loans receivable | 1.7 | 0.5 |
--------------------------------------------------------------------------------
| Deferred tax assets | 24.9 | 24.6 |
--------------------------------------------------------------------------------
| Total non-current assets | 218.0 | 219.6 |
--------------------------------------------------------------------------------
| Current assets | | |
--------------------------------------------------------------------------------
| Inventories | | |
--------------------------------------------------------------------------------
| Raw material and semi-manufactured goods | 105.3 | 92.7 |
--------------------------------------------------------------------------------
| Work in progress | 129.9 | 103.5 |
--------------------------------------------------------------------------------
| Advance payments | 16.0 | 30.4 |
--------------------------------------------------------------------------------
| Total inventories | 251.2 | 226.6 |
--------------------------------------------------------------------------------
| Account receivables | 328.0 | 324.2 |
--------------------------------------------------------------------------------
| Loans receivable | 0.2 | 0.2 |
--------------------------------------------------------------------------------
| Other receivables | 18.9 | 27.0 |
--------------------------------------------------------------------------------
| Deferred assets | 84.6 | 76.9 |
--------------------------------------------------------------------------------
| Cash and cash equivalents | 56.0 | 44.4 |
--------------------------------------------------------------------------------
| Total current assets | 738.9 | 699.4 |
--------------------------------------------------------------------------------
| TOTAL ASSETS | 956.9 | 919.0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EQUITY AND LIABILITIES | 31.12.2007 | 31.12.2006 |
--------------------------------------------------------------------------------
| Capital and reserves attributable to the | | |
| shareholders of the parent | | |
--------------------------------------------------------------------------------
| Share capital | 30.1 | 30.0 |
--------------------------------------------------------------------------------
| Share premium account | 39.3 | 39.0 |
--------------------------------------------------------------------------------
| Fair value reserves | 3.3 | 3.7 |
--------------------------------------------------------------------------------
| Translation difference | (12.9) | (5.8) |
--------------------------------------------------------------------------------
| Paid in capital | 4.7 | 0.5 |
--------------------------------------------------------------------------------
| Retained earnings | 87.0 | 87.7 |
--------------------------------------------------------------------------------
| Net profit for the period | 129.2 | 68.6 |
--------------------------------------------------------------------------------
| Total Shareholders' equity | 280.7 | 223.7 |
--------------------------------------------------------------------------------
| Minority interest | 0.1 | 0.1 |
--------------------------------------------------------------------------------
| Total equity | 280.8 | 223.7 |
--------------------------------------------------------------------------------
| Liabilities | | |
--------------------------------------------------------------------------------
| Non-current liabilities | | |
--------------------------------------------------------------------------------
| Interest-bearing liabilities | 45.7 | 120.9 |
--------------------------------------------------------------------------------
| Other long-term liabilities | 57.3 | 58.7 |
--------------------------------------------------------------------------------
| Deferred tax liabilities | 15.8 | 20.0 |
--------------------------------------------------------------------------------
| Total non-current liabilities | 118.8 | 199.6 |
--------------------------------------------------------------------------------
| Provisions | 37.2 | 28.2 |
--------------------------------------------------------------------------------
| Current liabilities | | |
--------------------------------------------------------------------------------
| Interest-bearing liabilities | 31.8 | 52.4 |
--------------------------------------------------------------------------------
| Advance payments received | 179.1 | 128.9 |
--------------------------------------------------------------------------------
| Progress billings | 2.7 | 7.0 |
--------------------------------------------------------------------------------
| Accounts payable | 120.4 | 113.6 |
--------------------------------------------------------------------------------
| Other short-term liabilities (non-interest | 22.8 | 23.0 |
| bearing) | | |
--------------------------------------------------------------------------------
| Accruals | 163.3 | 142.5 |
--------------------------------------------------------------------------------
| Total current liabilities | 520.1 | 467.4 |
--------------------------------------------------------------------------------
| Total liabilities | 676.1 | 695.2 |
--------------------------------------------------------------------------------
| TOTAL EQUITY AND LIABILITIES | 956.9 | 919.0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CONSOLIDATED STATEMENT OF CHANGES IN EQUITY - IFRS | |
--------------------------------------------------------------------------------
| EUR million | Share | Share | Share | Fair | Translation |
| | capita | premium | issues | value | Difference |
| | l | account | | Reserves | |
--------------------------------------------------------------------------------
| Balance at | 29.0 | 26.5 | 0.0 | -4.9 | -1.2 |
| 1 January, 2006 | | | | | |
--------------------------------------------------------------------------------
| Option exercised | 1.1 | 12.4 | | | |
--------------------------------------------------------------------------------
| Share issue | | | | | |
--------------------------------------------------------------------------------
| Dividend | | | | | |
| distribution | | | | | |
--------------------------------------------------------------------------------
| Cash flow hedge | | | | 8.6 | |
--------------------------------------------------------------------------------
| Translation | | | | | (4.6) |
| difference | | | | | |
--------------------------------------------------------------------------------
| Share based | | | | | |
| payments recognized | | | | | |
| against equity | | | | | |
--------------------------------------------------------------------------------
| Purchase of | | | | | |
| treasury shares | | | | | |
--------------------------------------------------------------------------------
| Minority interest | | | | | |
--------------------------------------------------------------------------------
| Net profit for the | | | | | |
| period | | | | | |
--------------------------------------------------------------------------------
| Balance at | 30.0 | 39.0 | 0.0 | 3.7 | -5.8 |
| 31 December, 2006 | | | | | |
--------------------------------------------------------------------------------
| Balance at | 30.0 | 39.0 | 0.0 | 3.7 | -5.8 |
| 1 January, 2007 | | | | | |
--------------------------------------------------------------------------------
| Option exercised | 0.0 | 0.3 | | | |
--------------------------------------------------------------------------------
| Dividend | | | | | |
| distribution | | | | | |
--------------------------------------------------------------------------------
| Cash flow hedge | | | | (0.3) | |
--------------------------------------------------------------------------------
| Translation | | | | | (7.1) |
| difference | | | | | |
--------------------------------------------------------------------------------
| Share based | | | | | |
| payments recognized | | | | | |
| against equity | | | | | |
--------------------------------------------------------------------------------
| Purchase of | | | | | |
| treasury shares | | | | | |
--------------------------------------------------------------------------------
| Minority interest | | | | | |
--------------------------------------------------------------------------------
| Net profit for the | | | | | |
| period | | | | | |
--------------------------------------------------------------------------------
| Balance at | 30.1 | 39.3 | 0.0 | 3.3 | -12.9 |
| 31 December, 2007 | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EUR million | | Paid in | Retained | Minority | Total |
| | | Capital | Earnings | interest | Equity |
--------------------------------------------------------------------------------
| Balance at | | 0.0 | 102.7 | 0.1 | 152.1 |
| 1 January, 2006 | | | | | |
--------------------------------------------------------------------------------
| Option exercised | | | | | 13.5 |
--------------------------------------------------------------------------------
| Share issue | | 0.5 | | | 0.5 |
--------------------------------------------------------------------------------
| Dividend | | | (15.8) | | (15.8) |
| distribution | | | | | |
--------------------------------------------------------------------------------
| Cash flow hedge | | | | | 8.6 |
--------------------------------------------------------------------------------
| Translation | | | | | (4.6) |
| difference | | | | | |
--------------------------------------------------------------------------------
| Share based | | | 0.8 | | 0.8 |
| payments recognized | | | | | |
| against equity | | | | | |
--------------------------------------------------------------------------------
| Purchase of | | | | | 0.0 |
| treasury shares | | | | | |
--------------------------------------------------------------------------------
| Minority interest | | | | | 0.0 |
--------------------------------------------------------------------------------
| Net profit for the | | | 68.6 | | 68.6 |
| period | | | | | |
--------------------------------------------------------------------------------
| Balance at | | 0.5 | 156.3 | 0.1 | 223.7 |
| 31 December, 2006 | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Balance at | | 0.5 | 156.3 | 0.1 | 223.7 |
| 1 January, 2007 | | | | | |
--------------------------------------------------------------------------------
| Option exercised | | 6.4 | | | 6.7 |
--------------------------------------------------------------------------------
| Dividend | | | (26.7) | | (26.7) |
| distribution | | | | | |
--------------------------------------------------------------------------------
| Cash flow hedge | | | | | (0.3) |
--------------------------------------------------------------------------------
| Translation | | | | | (7.1) |
| difference | | | | | |
--------------------------------------------------------------------------------
| Share based | | | 1.3 | | 1.3 |
| payments recognized | | | | | |
| against equity | | | | | |
--------------------------------------------------------------------------------
| Purchase of | | (2.2) | (43.8) | | (46.0) |
| treasury shares | | | | | |
--------------------------------------------------------------------------------
| Minority interest | | | | 0.0 | 0.0 |
--------------------------------------------------------------------------------
| Net profit for the | | | 129.2 | | 129.2 |
| period | | | | | |
--------------------------------------------------------------------------------
| Balance at | | 4.7 | 216.2 | 0.1 | 280.8 |
| 31 December, 2007 | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CONSOLIDATED CASH FLOW STATEMENT - IFRS | | |
--------------------------------------------------------------------------------
| EUR million | 1-12/2007 | 1-12/2006 |
--------------------------------------------------------------------------------
| Cash flow from operating activities | | |
--------------------------------------------------------------------------------
| Operating income | 192.3 | 105.5 |
--------------------------------------------------------------------------------
| Adjustments to operating profit | | |
--------------------------------------------------------------------------------
| Depreciation and impairments | 24.6 | 22.5 |
--------------------------------------------------------------------------------
| Profits and losses on sale of fixed assets | (18.0) | (0.3) |
--------------------------------------------------------------------------------
| Other non-cash items | (0.2) | 2.0 |
--------------------------------------------------------------------------------
| Operating income before chg in net working | 198.7 | 129.7 |
| capital | | |
--------------------------------------------------------------------------------
| Change in interest-free short-term receivables | (14.9) | (69.1) |
--------------------------------------------------------------------------------
| Change in inventories | (28.3) | (48.2) |
--------------------------------------------------------------------------------
| Change in interest-free short-term liabilities | 77.6 | 101.9 |
--------------------------------------------------------------------------------
| Change in net working capital | 34.4 | (15.4) |
--------------------------------------------------------------------------------
| Cash flow from operations before financing | 233.2 | 114.2 |
| items and taxes | | |
--------------------------------------------------------------------------------
| Interest received | 2.2 | 2.1 |
--------------------------------------------------------------------------------
| Interest paid | (10.8) | (11.5) |
--------------------------------------------------------------------------------
| Other financial income and expenses | (0.4) | (1.4) |
--------------------------------------------------------------------------------
| Income taxes paid | (40.7) | (22.1) |
--------------------------------------------------------------------------------
| Financing items and taxes | (49.7) | (32.8) |
--------------------------------------------------------------------------------
| Net cash from operating activities | 183.5 | 81.4 |
--------------------------------------------------------------------------------
| Cash flow from investing activities | |
--------------------------------------------------------------------------------
| Acquisition of Group companies, net of cash | (13.8) | (48.3) |
--------------------------------------------------------------------------------
| Acquisition of shares in associated company | 0.0 | (0.2) |
--------------------------------------------------------------------------------
| Investments in other shares | (0.5) | (0.6) |
--------------------------------------------------------------------------------
| Capital expenditures | (22.5) | (17.1) |
--------------------------------------------------------------------------------
| Proceeds from sale of fixed assets | 32.3 | 1.2 |
--------------------------------------------------------------------------------
| Dividends received | 0.2 | 0.1 |
--------------------------------------------------------------------------------
| Net cash used in investing activities | (4.4) | (64.8) |
--------------------------------------------------------------------------------
| Cash flow before financing activities | 179.1 | 16.6 |
--------------------------------------------------------------------------------
| Cash flow from financing activities | |
--------------------------------------------------------------------------------
| Proceeds from options exercised and share | 6.7 | 14.1 |
| issues | | |
--------------------------------------------------------------------------------
| Purchase of treasury shares | (46.0) | 0.0 |
--------------------------------------------------------------------------------
| Proceeds from long-term borrowings | 100.1 | 191.0 |
--------------------------------------------------------------------------------
| Repayments of long-term borrowings | (177.8) | (102.5) |
--------------------------------------------------------------------------------
| Proceeds from short-term borrowings | 1 721.1 | 1 588.9 |
--------------------------------------------------------------------------------
| Repayments of short-term borrowings | (1 741.9) | (1 690.7) |
--------------------------------------------------------------------------------
| Change in long-term receivables | (1.3) | 0.0 |
--------------------------------------------------------------------------------
| Change in short-term receivables | (0.0) | (0.2) |
--------------------------------------------------------------------------------
| Dividends paid | (26.7) | (15.8) |
--------------------------------------------------------------------------------
| Net cash used in financing activities | (165.8) | (15.2) |
--------------------------------------------------------------------------------
| Translation differences in cash | (1.7) | (1.0) |
--------------------------------------------------------------------------------
| Change of cash and cash equivalents | 11.6 | 0.3 |
--------------------------------------------------------------------------------
| Cash and cash equivalents at beginning of | 44.4 | 44.0 |
| period | | |
--------------------------------------------------------------------------------
| Cash and cash equivalents at end of period | 56.0 | 44.4 |
--------------------------------------------------------------------------------
| Change of cash and cash equivalents | 11.6 | 0.3 |
--------------------------------------------------------------------------------
The effect of changes in exchange rates has been eliminated by converting the
beginning balance at the rates current on the last day of the year.
--------------------------------------------------------------------------------
| SEGMENT INFORMATION | | | | |
--------------------------------------------------------------------------------
| 1. BUSINESS SEGMENTS | | | | |
--------------------------------------------------------------------------------
| EUR million | | | | |
--------------------------------------------------------------------------------
| Order Intakes by Business | 1-12/2007 | % of | 1-12/2006 | % of |
| Area | | total | | total |
--------------------------------------------------------------------------------
| Service 1) | 563.0 | 28 | 448.5 | 29 |
--------------------------------------------------------------------------------
| Standard Lifting | 793.8 | 40 | 592.7 | 38 |
--------------------------------------------------------------------------------
| Heavy Lifting | 633.9 | 32 | 519.2 | 33 |
--------------------------------------------------------------------------------
| ./. Internal | (118.7) | | (87.7) | |
--------------------------------------------------------------------------------
| Total | 1 872.0 | 100 | 1 472.8 | 100 |
--------------------------------------------------------------------------------
| 1) Excl. Service Contract | | | | |
| Base | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Order Book total 2) | 31.12.2007 | | 31.12.2006 | |
--------------------------------------------------------------------------------
| Total | 757.9 | | 571.6 | |
--------------------------------------------------------------------------------
| 2) Percentage of | | | | |
| completion deducted | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Sales by Business Area | 1-12/2007 | % of | 1-12/2006 | % of |
| | | total | | total |
--------------------------------------------------------------------------------
| Service | 628.6 | 34 | 526.6 | 33 |
--------------------------------------------------------------------------------
| Standard Lifting | 692.6 | 37 | 558.4 | 35 |
--------------------------------------------------------------------------------
| Heavy Lifting | 549.0 | 29 | 490.8 | 31 |
--------------------------------------------------------------------------------
| ./. Internal | (120.3) | | (93.3) | |
--------------------------------------------------------------------------------
| Total | 1 749.7 | 100 | 1 482.5 | 100 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating Profit (EBIT) by | 1-12/2007 | Ebit % | 1-12/2006 | Ebit % |
| Business Area without gain | MEUR | | MEUR | |
| on the sale of real estate | | | | |
--------------------------------------------------------------------------------
| Service | 78.7 | 12.5 | 53.0 | 10.1 |
--------------------------------------------------------------------------------
| Standard Lifting | 101.2 | 14.6 | 51.5 | 9.2 |
--------------------------------------------------------------------------------
| Heavy Lifting | 34.0 | 6.2 | 33.6 | 6.8 |
--------------------------------------------------------------------------------
| Group costs | (36.8) | | (31.6) | |
--------------------------------------------------------------------------------
| Consolidation items | (2.3) | | (0.9) | |
--------------------------------------------------------------------------------
| Total | 174.7 | 10.0 | 105.5 | 7.1 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total Operating Profit | 1-12/2007 | | 1-12/2006 | |
| (EBIT) by Business Area | | | | |
--------------------------------------------------------------------------------
| | MEUR | Ebit % | MEUR | Ebit % |
--------------------------------------------------------------------------------
| Service | 79.5 | 12.6 | 53.0 | 10.1 |
--------------------------------------------------------------------------------
| Standard Lifting | 110.1 | 15.9 | 51.5 | 9.2 |
--------------------------------------------------------------------------------
| Heavy Lifting | 41.9 | 7.6 | 33.6 | 6.8 |
--------------------------------------------------------------------------------
| Group costs | (36.8) | | (31.6) | |
--------------------------------------------------------------------------------
| Consolidation items | (2.3) | | (0.9) | |
--------------------------------------------------------------------------------
| Total | 192.3 | 11.0 | 105.5 | 7.1 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Personnel by Business Area | 31.12.2007 | % of | 31.12.2006 | % of |
| (at the End of the Period) | | total | | total |
--------------------------------------------------------------------------------
| Service | 4 436 | 53 | 3 923 | 52 |
--------------------------------------------------------------------------------
| Standard Lifting | 2 479 | 29 | 2 333 | 31 |
--------------------------------------------------------------------------------
| Heavy Lifting | 1 272 | 15 | 1 131 | 15 |
--------------------------------------------------------------------------------
| Group staff | 217 | 3 | 162 | 2 |
--------------------------------------------------------------------------------
| Total | 8 404 | 100 | 7 549 | 100 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 2. GEOGRAPHICAL SEGMENTS | | | |
--------------------------------------------------------------------------------
| EUR million | | | | |
--------------------------------------------------------------------------------
| Sales by Market | 1-12/2007 | % of | 1-12/2006 | % of |
| | | total | | total |
--------------------------------------------------------------------------------
| Europe-Middle East-Africa | 951.4 | 54 | 781.0 | 53 |
| (EMEA) | | | | |
--------------------------------------------------------------------------------
| Americas (AME) | 589.7 | 34 | 512.3 | 35 |
--------------------------------------------------------------------------------
| Asia-Pacific (APAC) | 208.6 | 12 | 189.1 | 13 |
--------------------------------------------------------------------------------
| Total | 1 749.7 | 100 | 1 482.5 | 100 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| NOTES: | | | |
--------------------------------------------------------------------------------
| KEY FIGURES | 1-12/2007 | 1-12/2006 | Change % |
--------------------------------------------------------------------------------
| Earnings per share, basic (EUR) | 2.17 | 1.17 | 84.5 % |
--------------------------------------------------------------------------------
| Earnings per share, diluted (EUR) | 2.13 | 1.15 | 85.9 % |
--------------------------------------------------------------------------------
| Gearing % | 7.0 | 57.3 | (87.8) % |
--------------------------------------------------------------------------------
| Solidity % | 36.1 | 28.3 | 27.6 % |
--------------------------------------------------------------------------------
| Return on capital employed, % | 50.4 | 29.5 | 70.8 % |
--------------------------------------------------------------------------------
| Return on equity, % | 51.2 | 36.5 | 40.3 % |
--------------------------------------------------------------------------------
| Equity/share, EUR | 4.80 | 3.77 | 27.3 % |
--------------------------------------------------------------------------------
| Current ratio | 1.3 | 1.4 | (7.1) % |
--------------------------------------------------------------------------------
| Investments total | 25.2 | 16.3 | 54.5 % |
| (excl.Acquisitions), EUR million | | | |
--------------------------------------------------------------------------------
| Interest-bearing net debt, EUR | 19.7 | 128.2 | (84.6) % |
| million | | | |
--------------------------------------------------------------------------------
| Net working capital, EUR million | 166.4 | 216.2 | (23.1) % |
--------------------------------------------------------------------------------
| Average number of personnel during | 8 005 | 6 859 | 16.7 % |
| the period | | | |
--------------------------------------------------------------------------------
| Average number of shares | 59 608 990 | 58 383 534 | 2.1 % |
| outstanding, basic | | | |
--------------------------------------------------------------------------------
| Average number of shares | 60 507 038 | 59 736 235 | 1.3 % |
| outstanding, diluted | | | |
--------------------------------------------------------------------------------
| Number of shares outstanding, at | 58 505 780 | 59 285 120 | (1.3) % |
| end of the period | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| The period end exchange | 31.12.2007 | 31.12.2006 | Change % |
| rates: | | | |
--------------------------------------------------------------------------------
| USD | 1.4721 | 1.3170 | (10.5) % |
--------------------------------------------------------------------------------
| CAD | 1.4449 | 1.5281 | 5.8 % |
--------------------------------------------------------------------------------
| GBP | 0.7334 | 0.6715 | (8.4) % |
--------------------------------------------------------------------------------
| CNY | 10.7524 | 10.2793 | (4.4) % |
--------------------------------------------------------------------------------
| SGD | 2.1163 | 2.0202 | (4.5) % |
--------------------------------------------------------------------------------
| SEK | 9.4415 | 9.0404 | (4.2) % |
--------------------------------------------------------------------------------
| NOK | 7.9580 | 8.2380 | 3.5 % |
--------------------------------------------------------------------------------
| AUD | 1.6757 | 1.6691 | (0.4) % |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| The period average | 31.12.2007 | 31.12.2006 | Change % |
| exchange rates: | | | |
--------------------------------------------------------------------------------
| USD | 1.3699 | 1.2554 | (8.4) % |
--------------------------------------------------------------------------------
| CAD | 1.4679 | 1.4234 | (3.0) % |
--------------------------------------------------------------------------------
| GBP | 0.6840 | 0.6817 | (0.3) % |
--------------------------------------------------------------------------------
| CNY | 10.4160 | 10.0080 | (3.9) % |
--------------------------------------------------------------------------------
| SGD | 2.0633 | 1.9938 | (3.4) % |
--------------------------------------------------------------------------------
| SEK | 9.2489 | 9.2548 | 0.1 % |
--------------------------------------------------------------------------------
| NOK | 8.0159 | 8.0487 | 0.4 % |
--------------------------------------------------------------------------------
| AUD | 1.6346 | 1.6666 | 2.0 % |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CONTINGENT LIABILITIES AND PLEDGED ASSETS | | |
--------------------------------------------------------------------------------
| EUR million | 31.12.2007 | 31.12.2006 |
--------------------------------------------------------------------------------
| Contingent liabilities | | |
--------------------------------------------------------------------------------
| For own debts | | |
--------------------------------------------------------------------------------
| Mortgages on land and buildings | 0.0 | 0.7 |
--------------------------------------------------------------------------------
| For own commercial obligations | | |
--------------------------------------------------------------------------------
| Pledged assets | 0.3 | 1.1 |
--------------------------------------------------------------------------------
| Guarantees | 255.3 | 136.3 |
--------------------------------------------------------------------------------
| Other contingent liabilities and financial | | |
| liabilities | | |
--------------------------------------------------------------------------------
| Contingent liabilities | | |
--------------------------------------------------------------------------------
| Next year | 24.1 | 11.1 |
--------------------------------------------------------------------------------
| Later on | 63.7 | 26.0 |
--------------------------------------------------------------------------------
| Other | 0.0 | 1.0 |
--------------------------------------------------------------------------------
| Total | 343.5 | 176.2 |
--------------------------------------------------------------------------------
| Leasing contracts follow the normal practices | | |
| in corresponding countries. | | |
--------------------------------------------------------------------------------
| Total by category | | |
--------------------------------------------------------------------------------
| Mortgages on land and buildings | 0.0 | 0.7 |
--------------------------------------------------------------------------------
| Pledged assets | 0.3 | 1.1 |
--------------------------------------------------------------------------------
| Guarantees | 255.3 | 136.3 |
--------------------------------------------------------------------------------
| Other liabilities | 87.9 | 38.1 |
--------------------------------------------------------------------------------
| Total | 343.5 | 176.2 |
--------------------------------------------------------------------------------
Contingent liabilities relating to litigations
Various legal actions, claims and other proceedings are pending against the
Group in various countries. These actions, claims and other proceedings are
typical for this industry and consistent with a global business offering that
encompasses a wide range of products and services. These matters involve
contractual disputes, warranty claims, product liability (including design
defects, manufacturing defects, failure to warn and asbestos legacy),
employment, auto liability and other matters involving claims of general
liability.
While the final outcome of these matters cannot be predicted with certainty
Konecranes is of the opinion, based on the information available to date and
considering the grounds presented for such claims, available insurance coverage
and the reserves made, that the outcome of such actions, claims and other
proceedings, if unfavorable, would not have a material adverse impact on the
financial condition of the Group.
--------------------------------------------------------------------------------
| NOTIONAL AND FAIR VALUES OF DERIVATIVE FINANCIAL | | |
| INSTRUMENTS | | |
--------------------------------------------------------------------------------
| EUR million | 12/2007 | 12/2007 | 12/2006 | 12/2006 |
--------------------------------------------------------------------------------
| | Nominal | Fair | Nominal | Fair |
| | value | value | value | value |
--------------------------------------------------------------------------------
| Foreign exchange forward | 168.8 | 5.4 | 279.7 | 3.0 |
| contracts | | | | |
--------------------------------------------------------------------------------
| Electricity derivatives | 0.9 | 0.3 | 1.1 | 0.1 |
--------------------------------------------------------------------------------
| Total | 169.7 | 5.7 | 280.8 | 3.1 |
--------------------------------------------------------------------------------
Derivatives are used for hedging currency and interest rate risks, as well as
the risk of electricity price fluctuations. The Company applies hedge accounting
on the derivatives used to hedge cash flows in Heavy Lifting projects.
ACQUISITIONS
During the first half of 2007, Konecranes made a few smaller business
acquisitions. The most important of these was the acquisition of Straddle
carrier manufacturer in Germany, Consens Transport Systeme. Additionally in
January, Konecranes signed an agreement to acquire the maintenance service
business of a small Swedish-based company El&Travers. In March, Konecranes made
an asset purchase agreement with the Spanish company Sistemas de Elevación,
operating in the field of port service.
During the third quarter, Konecranes made four acquisitions. On 31 July,
Konecranes acquired the Finnish container handling software specialist Savcor
One Oy. The company, which was part of the Savcor Group, is based in Vantaa,
Finland, and provides its products and services to more than 20 leading
container ports all over the world. In July 2007, Konecranes strengthened its
position in the machine tool service (MTS) business by acquiring two MTS
companies in Scandinavia, Reftele Maskinservice AB in Sweden and Kongsberg
Automation A/S in Norway. On 31 July, Konecranes signed an agreement to acquire
the port service business of Technical Services S.r.l. in Italy.
If the combinations had taken place at the beginning of the year, the net sales
for the Group would have been EUR 1,767.3 million and operating profit EUR 190.8
million.
Since the dates of acquisitions, the acquired units have contributed about EUR
12.2 million to the net sales and EUR -1.4 million to the operating profit of
the Group.
The preliminary fair values of the identifiable assets and liabilities of the
acquired businesses at the date of acquisitions are summarized below.
--------------------------------------------------------------------------------
| EUR million | 12/2007 | 12/2007 |
--------------------------------------------------------------------------------
| | Recognized on | Carrying |
| | acquisition | value |
--------------------------------------------------------------------------------
| Intangible assets | 11.2 | 0.6 |
--------------------------------------------------------------------------------
| Tangible assets | 0.6 | 0.6 |
--------------------------------------------------------------------------------
| Deferred tax assets | 0.0 | 0.3 |
--------------------------------------------------------------------------------
| Inventories | 4.8 | 4.7 |
--------------------------------------------------------------------------------
| Receivables and other assets | 1.9 | 1.9 |
--------------------------------------------------------------------------------
| Cash and bank | 1.5 | 1.5 |
--------------------------------------------------------------------------------
| Total assets | 20.0 | 9.6 |
--------------------------------------------------------------------------------
| Liabilities | 5.5 | 3.1 |
--------------------------------------------------------------------------------
| Net assets | 14.5 | 6.5 |
--------------------------------------------------------------------------------
| Acquisition costs | 17.4 | |
--------------------------------------------------------------------------------
| Goodwill | 2.9 | |
--------------------------------------------------------------------------------
| Cash outflow on acquisition | | |
--------------------------------------------------------------------------------
| Acquisition costs | 17.4 | |
--------------------------------------------------------------------------------
| Liabilities assumed | (2.0) | |
--------------------------------------------------------------------------------
| Acquisition costs paid in cash | 15.4 | |
--------------------------------------------------------------------------------
| Cash and cash equivalents of acquired | (1.5) | |
| companies | | |
--------------------------------------------------------------------------------
| Net cash flow arising on acquisition | 13.8 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| QUARTERLY FIGURES: | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CONSOLIDATED STATEMENT OF INCOME - IFRS, QUARTERLY |
--------------------------------------------------------------------------------
| EUR million | Q4/2007 | Q3/2007 | Q2/2007 | Q1/2007 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Sales | 522.8 | 424.4 | 422.0 | 380.5 |
--------------------------------------------------------------------------------
| Other operating income | 0.8 | 0.5 | 18.3 | 0.7 |
--------------------------------------------------------------------------------
| Depreciation and impairments | (6.9) | (5.7) | (5.9) | (6.2) |
--------------------------------------------------------------------------------
| Other operating expenses | (456.3) | (373.7) | (378.8) | (344.3) |
--------------------------------------------------------------------------------
| Operating profit | 60.4 | 45.5 | 55.6 | 30.8 |
--------------------------------------------------------------------------------
| Share of result of associates | 0.1 | 0.3 | 0.5 | (0.2) |
| and joint ventures | | | | |
--------------------------------------------------------------------------------
| Financial income and expenses | (3.6) | (4.3) | (3.1) | (3.2) |
--------------------------------------------------------------------------------
| Profit before taxes | 56.9 | 41.5 | 53.0 | 27.4 |
--------------------------------------------------------------------------------
| Taxes | (14.3) | (12.0) | (15.4) | (8.0) |
--------------------------------------------------------------------------------
| Net profit for the period | 42.6 | 29.5 | 37.6 | 19.5 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CONSOLIDATED STATEMENT OF INCOME - IFRS, QUARTERLY |
--------------------------------------------------------------------------------
| EUR million | Q4/2006 | Q3/2006 | Q2/2006 | Q1/2006 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Sales | 460.1 | 385.8 | 339.9 | 296.7 |
--------------------------------------------------------------------------------
| Other operating income | 0.5 | 0.6 | 0.1 | 0.8 |
--------------------------------------------------------------------------------
| Depreciation and impairments | (6.9) | (5.6) | (5.2) | (4.7) |
--------------------------------------------------------------------------------
| Other operating expenses | (414.3) | (349.6) | (313.8) | (278.8) |
--------------------------------------------------------------------------------
| Operating profit | 39.3 | 31.2 | 21.0 | 14.0 |
--------------------------------------------------------------------------------
| Share of result of associates | 0.3 | 0.1 | 0.4 | (0.1) |
| and joint ventures | | | | |
--------------------------------------------------------------------------------
| Financial income and expenses | (3.0) | (2.4) | (3.8) | (2.0) |
--------------------------------------------------------------------------------
| Profit before taxes | 36.6 | 28.9 | 17.6 | 11.9 |
--------------------------------------------------------------------------------
| Taxes | (9.0) | (8.7) | (5.3) | (3.6) |
--------------------------------------------------------------------------------
| Net profit for the period | 27.7 | 20.2 | 12.4 | 8.3 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CONSOLIDATED BALANCE SHEET - IFRS | | |
--------------------------------------------------------------------------------
| EUR million | Q4/2007 | Q3/2007 | Q2/2007 | Q1/2007 |
--------------------------------------------------------------------------------
| ASSETS | | | | |
--------------------------------------------------------------------------------
| Goodwill | 56.8 | 58.4 | 55.2 | 54.0 |
--------------------------------------------------------------------------------
| Other intangible assets | 59.4 | 61.1 | 52.6 | 54.7 |
--------------------------------------------------------------------------------
| Property, plant and equipment | 61.9 | 59.4 | 59.0 | 68.2 |
--------------------------------------------------------------------------------
| Other | 40.0 | 43.3 | 43.8 | 45.1 |
--------------------------------------------------------------------------------
| Total Non-current assets | 218.0 | 222.2 | 210.6 | 221.9 |
--------------------------------------------------------------------------------
| Inventories | 251.2 | 268.3 | 257.2 | 251.6 |
--------------------------------------------------------------------------------
| Receivables and other current | 431.7 | 422.2 | 402.3 | 378.6 |
| assets | | | | |
--------------------------------------------------------------------------------
| Cash and cash equivalents | 56.0 | 57.3 | 62.0 | 62.0 |
--------------------------------------------------------------------------------
| Total Current assets | 738.9 | 747.8 | 721.6 | 692.3 |
--------------------------------------------------------------------------------
| Total Assets | 956.9 | 970.1 | 932.3 | 914.2 |
--------------------------------------------------------------------------------
| EQUITY AND LIABILITIES | | | | |
--------------------------------------------------------------------------------
| Total Equity | 280.8 | 287.1 | 259.2 | 218.0 |
--------------------------------------------------------------------------------
| Non-current liabilities | 118.8 | 151.8 | 154.0 | 157.2 |
--------------------------------------------------------------------------------
| Provisions | 37.2 | 30.5 | 27.3 | 27.3 |
--------------------------------------------------------------------------------
| Advance payments received | 179.1 | 158.7 | 134.6 | 109.8 |
--------------------------------------------------------------------------------
| Other current liabilities | 340.9 | 341.9 | 357.1 | 401.9 |
--------------------------------------------------------------------------------
| Total Liabilities | 676.1 | 682.9 | 673.0 | 696.2 |
--------------------------------------------------------------------------------
| Total Equity and Liabilities | 956.9 | 970.1 | 932.2 | 914.2 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CONSOLIDATED BALANCE SHEET - IFRS | | |
--------------------------------------------------------------------------------
| EUR million | Q4/2006 | Q3/2006 | Q2/2006 | Q1/2006 |
--------------------------------------------------------------------------------
| ASSETS | | | | |
--------------------------------------------------------------------------------
| Goodwill | 54.0 | 59.0 | 59.0 | 55.6 |
--------------------------------------------------------------------------------
| Other intangible assets | 55.0 | 51.4 | 52.6 | 41.7 |
--------------------------------------------------------------------------------
| Property, plant and equipment | 67.5 | 70.2 | 71.2 | 59.6 |
--------------------------------------------------------------------------------
| Other | 43.1 | 39.1 | 35.5 | 34.8 |
--------------------------------------------------------------------------------
| Total Non-current assets | 219.6 | 219.8 | 218.3 | 191.7 |
--------------------------------------------------------------------------------
| Inventories | 226.6 | 237.0 | 218.6 | 177.3 |
--------------------------------------------------------------------------------
| Receivables and other current | 428.4 | 383.3 | 354.5 | 313.5 |
| assets | | | | |
--------------------------------------------------------------------------------
| Cash and cash equivalents | 44.4 | 54.8 | 40.9 | 39.4 |
--------------------------------------------------------------------------------
| Total Current assets | 699.4 | 675.2 | 614.0 | 530.2 |
--------------------------------------------------------------------------------
| Total Assets | 919.0 | 895.0 | 832.3 | 721.9 |
--------------------------------------------------------------------------------
| EQUITY AND LIABILITIES | | | | |
--------------------------------------------------------------------------------
| Total Equity | 223.7 | 194.0 | 173.3 | 154.7 |
--------------------------------------------------------------------------------
| Non-current liabilities | 199.6 | 171.6 | 173.5 | 102.2 |
--------------------------------------------------------------------------------
| Provisions | 28.2 | 27.6 | 20.8 | 20.4 |
--------------------------------------------------------------------------------
| Advance payments received | 128.9 | 140.4 | 113.5 | 89.7 |
--------------------------------------------------------------------------------
| Other current liabilities | 338.5 | 361.4 | 351.2 | 354.8 |
--------------------------------------------------------------------------------
| Total Liabilities | 695.2 | 701.0 | 659.0 | 567.2 |
--------------------------------------------------------------------------------
| Total Equity and Liabilities | 919.0 | 895.0 | 832.3 | 721.9 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CONSOLIDATED CASH FLOW STATEMENT - QUARTERLY |
--------------------------------------------------------------------------------
| EUR million | Q4/2007 | Q3/2007 | Q2/2007 | Q1/2007 |
--------------------------------------------------------------------------------
| Cash flow before chg in net | 67.2 | 51.0 | 43.8 | 36.7 |
| working capital | | | | |
--------------------------------------------------------------------------------
| Change in net working capital | 39.2 | 10.5 | (13.1) | (2.2) |
--------------------------------------------------------------------------------
| Financing items and taxes | (9.5) | (9.5) | (18.4) | (12.2) |
--------------------------------------------------------------------------------
| Net cash from operating | 96.9 | 52.1 | 12.2 | 22.3 |
| activities | | | | |
--------------------------------------------------------------------------------
| Cash flow from investing | (6.4) | (12.1) | 26.1 | (12.0) |
| activities | | | | |
--------------------------------------------------------------------------------
| Cash flow before financing | 90.5 | 40.0 | 38.3 | 10.3 |
| activities | | | | |
--------------------------------------------------------------------------------
| Proceeds from options | 1.2 | (0.1) | 3.6 | 2.0 |
| exercised and share issues | | | | |
--------------------------------------------------------------------------------
| Purchase of treasury shares | (46.0) | 0.0 | 0.0 | 0.0 |
--------------------------------------------------------------------------------
| Change of interest-bearing | (46.3) | (28.7) | (57.0) | 32.3 |
| debt | | | | |
--------------------------------------------------------------------------------
| Dividends paid | 0.0 | 0.0 | 0.1 | (26.8) |
--------------------------------------------------------------------------------
| Net cash used in financing | (91.1) | (28.8) | (53.3) | 7.5 |
| activities | | | | |
--------------------------------------------------------------------------------
| Translation differences in | (0.7) | (1.0) | 0.1 | (0.1) |
| cash | | | | |
--------------------------------------------------------------------------------
| Change of cash and cash | (1.4) | 10.2 | (14.9) | 17.7 |
| equivalents | | | | |
--------------------------------------------------------------------------------
| Cash and cash equivalents at | 57.3 | 47.1 | 62.0 | 44.4 |
| beginning of period | | | | |
--------------------------------------------------------------------------------
| Cash and cash equivalents at | 56.0 | 57.3 | 47.1 | 62.0 |
| end of period | | | | |
--------------------------------------------------------------------------------
| Change of cash and cash | (1.4) | 10.2 | (14.9) | 17.7 |
| equivalents | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CONSOLIDATED CASH FLOW STATEMENT - QUARTERLY |
--------------------------------------------------------------------------------
| EUR million | Q4/2006 | Q3/2006 | Q2/2006 | Q1/2006 |
--------------------------------------------------------------------------------
| Cash flow before chg in net | 47.8 | 37.1 | 26.0 | 18.9 |
| working capital | | | | |
--------------------------------------------------------------------------------
| Change in net working capital | (10.1) | 1.3 | (18.9) | 12.3 |
--------------------------------------------------------------------------------
| Financing items and taxes | (15.0) | (5.7) | (7.5) | (4.6) |
--------------------------------------------------------------------------------
| Net cash from operating | 22.6 | 32.7 | (0.5) | 26.6 |
| activities | | | | |
--------------------------------------------------------------------------------
| Cash flow from investing | (7.0) | (1.1) | (53.7) | (3.1) |
| activities | | | | |
--------------------------------------------------------------------------------
| Cash flow before financing | 15.7 | 31.6 | (54.2) | 23.5 |
| activities | | | | |
--------------------------------------------------------------------------------
| Proceeds from options | 2.8 | 0.8 | 3.2 | 7.3 |
| exercised and share issues | | | | |
--------------------------------------------------------------------------------
| Purchase of treasury shares | 0.0 | 0.0 | 0.0 | 0.0 |
--------------------------------------------------------------------------------
| Change of interest-bearing | (28.6) | (18.6) | 53.2 | (19.5) |
| debt | | | | |
--------------------------------------------------------------------------------
| Dividends paid | 0.0 | 0.0 | 0.0 | (15.8) |
--------------------------------------------------------------------------------
| Net cash used in financing | (25.8) | (17.9) | 56.5 | (28.0) |
| activities | | | | |
--------------------------------------------------------------------------------
| Translation differences in | (0.3) | 0.2 | (0.7) | (0.2) |
| cash | | | | |
--------------------------------------------------------------------------------
| Change of cash and cash | (10.5) | 13.9 | 1.5 | (4.6) |
| equivalents | | | | |
--------------------------------------------------------------------------------
| Cash and cash equivalents at | 54.8 | 40.9 | 39.4 | 44.0 |
| beginning of period | | | | |
--------------------------------------------------------------------------------
| Cash and cash equivalents at | 44.4 | 54.8 | 40.9 | 39.4 |
| end of period | | | | |
--------------------------------------------------------------------------------
| Change of cash and cash | (10.5) | 13.9 | 1.5 | (4.6) |
| equivalents | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| QUARTERLY SEGMENT INFORMATION | | | |
--------------------------------------------------------------------------------
| EUR million | | | | |
--------------------------------------------------------------------------------
| Sales by Business Area | Q4/2007 | Q3/2007 | Q2/2007 | Q1/2007 |
--------------------------------------------------------------------------------
| Service | 172.9 | 156.3 | 151.6 | 147.8 |
--------------------------------------------------------------------------------
| Standard Lifting | 200.7 | 177.6 | 169.5 | 144.7 |
--------------------------------------------------------------------------------
| Heavy Lifting | 187.6 | 118.5 | 129.0 | 113.9 |
--------------------------------------------------------------------------------
| ./. Internal | (38.4) | (28.1) | (28.1) | (25.8) |
--------------------------------------------------------------------------------
| Total | 522.8 | 424.4 | 422.0 | 380.5 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EUR million | | | | |
--------------------------------------------------------------------------------
| Sales by Business Area | Q4/2006 | Q3/2006 | Q2/2006 | Q1/2006 |
--------------------------------------------------------------------------------
| Service | 161.4 | 136.6 | 122.9 | 105.6 |
--------------------------------------------------------------------------------
| Standard Lifting | 159.5 | 153.2 | 131.7 | 114.0 |
--------------------------------------------------------------------------------
| Heavy Lifting | 162.7 | 125.3 | 104.5 | 98.4 |
--------------------------------------------------------------------------------
| ./. Internal | (23.5) | (29.2) | (19.2) | (21.3) |
--------------------------------------------------------------------------------
| Total | 460.1 | 385.8 | 339.9 | 296.7 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating Profit (EBIT) by | Q4/2007 | Q3/2007 | Q2/2007 | Q1/2007 |
| Business Area without gain on | | | | |
| the sale of real estate | | | | |
--------------------------------------------------------------------------------
| Service | 24.3 | 21.3 | 18.0 | 15.1 |
--------------------------------------------------------------------------------
| Standard Lifting | 31.7 | 28.0 | 24.4 | 17.0 |
--------------------------------------------------------------------------------
| Heavy Lifting | 15.6 | 4.5 | 6.1 | 7.9 |
--------------------------------------------------------------------------------
| Group costs | (12.2) | (5.9) | (10.2) | (8.5) |
--------------------------------------------------------------------------------
| Consolidation items | 1.0 | (2.3) | (0.3) | (0.7) |
--------------------------------------------------------------------------------
| Total | 60.4 | 45.5 | 38.0 | 30.8 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating Profit (EBIT) by | Q4/2006 | Q3/2006 | Q2/2006 | Q1/2006 |
| Business Area without gain on | | | | |
| the sale of real estate | | | | |
--------------------------------------------------------------------------------
| Service | 17.6 | 14.4 | 12.3 | 8.7 |
--------------------------------------------------------------------------------
| Standard Lifting | 16.2 | 15.3 | 12.0 | 8.0 |
--------------------------------------------------------------------------------
| Heavy Lifting | 14.0 | 8.3 | 5.7 | 5.6 |
--------------------------------------------------------------------------------
| Group costs | (9.6) | (5.8) | (8.8) | (7.4) |
--------------------------------------------------------------------------------
| Consolidation items | 1.0 | (1.0) | (0.1) | (0.8) |
--------------------------------------------------------------------------------
| Total | 39.3 | 31.2 | 21.0 | 14.0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Order Intakes by Business | Q4/2007 | Q3/2007 | Q2/2007 | Q1/2007 |
| Area | | | | |
--------------------------------------------------------------------------------
| Service 1) | 137.8 | 138.7 | 142.6 | 143.9 |
--------------------------------------------------------------------------------
| Standard Lifting | 196.4 | 201.7 | 199.8 | 196.0 |
--------------------------------------------------------------------------------
| Heavy Lifting | 168.6 | 195.4 | 151.7 | 118.3 |
--------------------------------------------------------------------------------
| ./. Internal | (31.8) | (29.3) | (28.9) | (28.7) |
--------------------------------------------------------------------------------
| Total | 471.0 | 506.4 | 465.1 | 429.4 |
--------------------------------------------------------------------------------
| 1) Excl. Service Contract | | | | |
| Base | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Order Intakes by Business | Q4/2006 | Q3/2006 | Q2/2006 | Q1/2006 |
| Area | | | | |
--------------------------------------------------------------------------------
| Service 1) | 122.5 | 117.9 | 108.3 | 99.8 |
--------------------------------------------------------------------------------
| Standard Lifting | 137.7 | 157.2 | 155.3 | 142.6 |
--------------------------------------------------------------------------------
| Heavy Lifting | 128.8 | 150.9 | 124.3 | 115.1 |
--------------------------------------------------------------------------------
| ./. Internal | (21.4) | (22.7) | (18.7) | (24.9) |
--------------------------------------------------------------------------------
| Total | 367.5 | 403.4 | 369.2 | 332.7 |
--------------------------------------------------------------------------------
| 1) Excl. Service Contract | | | | |
| Base | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Order book by Business Area | Q4/2007 | Q3/2007 | Q2/2007 | Q1/2007 |
--------------------------------------------------------------------------------
| Service | 109.3 | 122.8 | 124.5 | 112.9 |
--------------------------------------------------------------------------------
| Standard Lifting | 270.9 | 267.7 | 239.5 | 225.0 |
--------------------------------------------------------------------------------
| Heavy Lifting | 406.1 | 434.3 | 360.9 | 356.0 |
--------------------------------------------------------------------------------
| ./. Internal | (28.4) | (29.9) | (25.1) | (57.1) |
--------------------------------------------------------------------------------
| Total | 757.9 | 794.8 | 699.8 | 636.8 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Order book by Business Area | Q4/2006 | Q3/2006 | Q2/2006 | Q1/2006 |
--------------------------------------------------------------------------------
| Service | 101.1 | 119.9 | 118.7 | 82.9 |
--------------------------------------------------------------------------------
| Standard Lifting | 174.6 | 202.7 | 192.3 | 138.8 |
--------------------------------------------------------------------------------
| Heavy Lifting | 349.9 | 413.6 | 377.7 | 342.1 |
--------------------------------------------------------------------------------
| ./. Internal | (53.9) | (54.3) | (48.0) | (53.0) |
--------------------------------------------------------------------------------
| Total | 571.6 | 681.9 | 640.7 | 510.8 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Sales by Market | Q4/2007 | Q3/2007 | Q2/2007 | Q1/2007 |
--------------------------------------------------------------------------------
| Europe-Middle East-Africa | 297.6 | 238.6 | 227.0 | 188.2 |
| (EMEA) | | | | |
--------------------------------------------------------------------------------
| Americas (AME) | 159.6 | 135.4 | 143.1 | 151.7 |
--------------------------------------------------------------------------------
| Asia-Pacific (APAC) | 65.6 | 50.4 | 51.9 | 40.7 |
--------------------------------------------------------------------------------
| Total | 522.8 | 424.4 | 422.0 | 380.5 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Sales by Market | Q4/2006 | Q3/2006 | Q2/2006 | Q1/2006 |
--------------------------------------------------------------------------------
| Europe-Middle East-Africa | 227.8 | 187.9 | 195.3 | 170.1 |
| (EMEA) | | | | |
--------------------------------------------------------------------------------
| Americas (AME) | 168.5 | 148.0 | 105.8 | 90.1 |
--------------------------------------------------------------------------------
| Asia-Pacific (APAC) | 63.8 | 50.0 | 38.8 | 36.6 |
--------------------------------------------------------------------------------
| Total | 460.1 | 385.8 | 339.9 | 296.7 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| KONECRANES GROUP 2003 - 2007 | | | | | |
--------------------------------------------------------------------------------
| | | IFRS | IFRS | IFRS | IFRS | FAS |
--------------------------------------------------------------------------------
| Business development | | 2007 | 2006 | 2005 | 2004 | 2003 |
--------------------------------------------------------------------------------
| Order intake | MEUR | 1,872.0 | 1,472.8 | 1,061.2 | 736.9 | 611.9 |
--------------------------------------------------------------------------------
| Order book | MEUR | 757.9 | 571.6 | 432.1 | 298.8 | 211.2 |
--------------------------------------------------------------------------------
| Net sales | MEUR | 1,749.7 | 1,482.5 | 970.8 | 728.0 | 664.5 |
--------------------------------------------------------------------------------
| of which outside | MEUR | 1,652.2 | 1,396.0 | 883.7 | 653.5 | 599.4 |
| Finland | | | | | | |
--------------------------------------------------------------------------------
| Export from Finland | MEUR | 481.3 | 519.6 | 334.2 | 273.4 | 258.9 |
--------------------------------------------------------------------------------
| Personnel on average | | 8,005 | 6,859 | 5,087 | 4,369 | 4,423 |
--------------------------------------------------------------------------------
| Personnel on 31 | | 8,404 | 7,549 | 5,923 | 4,511 | 4,350 |
| December | | | | | | |
--------------------------------------------------------------------------------
| Capital expenditure | MEUR | 25.2 | 16.3 | 16.0 | 11.8 | 12.4 |
--------------------------------------------------------------------------------
| as a percentage of | % | 1.4% | 1.1% | 1.6% | 1.6% | 1.9% |
| net | | | | | | |
| sales | | | | | | |
--------------------------------------------------------------------------------
| Research and | MEUR | 16.2 | 12.5 | 8.8 | 8.5 | 7.9 |
| development costs | | | | | | |
--------------------------------------------------------------------------------
| as % of Group net | % | 0.9% | 0.8% | 0.9% | 1.2% | 1.2% |
| sales | | | | | | |
--------------------------------------------------------------------------------
| Profitability | | | | | | |
--------------------------------------------------------------------------------
| Net sales | MEUR | 1,749.7 | 1,482.5 | 970.8 | 728.0 | 664.5 |
--------------------------------------------------------------------------------
| Operating income | MEUR | 192.3 | 105.5 | 49.3 | 31.3 | 21.5 |
--------------------------------------------------------------------------------
| as percentage of net | % | 11.0% | 7.1% | 5.1% | 4.3% | 3.2% |
| sales | | | | | | |
--------------------------------------------------------------------------------
| Income before | MEUR | 178.8 | 95.1 | 34.1 | 27.7 | 18.9 |
| extraordinary items | | | | | | |
--------------------------------------------------------------------------------
| as percentage of net | % | 10.2% | 6.4% | 3.5% | 3.8% | 2.8% |
| sales | | | | | | |
--------------------------------------------------------------------------------
| Income before taxes | MEUR | 178.8 | 95.1 | 34.1 | 27.7 | 10.7 |
--------------------------------------------------------------------------------
| as percentage of net | % | 10.2% | 6.4% | 3.5% | 3.8% | 1.6% |
| sales | | | | | | |
--------------------------------------------------------------------------------
| Net income | MEUR | 129.2 | 68.6 | 24.1 | 18.4 | 6.7 |
--------------------------------------------------------------------------------
| as percentage of net | % | 7.4% | 4.6% | 2.5% | 2.5% | 1.0% |
| sales | | | | | | |
--------------------------------------------------------------------------------
| Key figures and | | | | | | |
| balance sheet | | | | | | |
--------------------------------------------------------------------------------
| Shareholders' equity | MEUR | 280.8 | 223.7 | 152.1 | 137.6 | 163.4 |
--------------------------------------------------------------------------------
| Balance Sheet | MEUR | 956.9 | 919.0 | 724.0 | 513.9 | 402.2 |
--------------------------------------------------------------------------------
| Return on equity | % | 51.2 | 36.5 | 16.6 | 12.5 | 7.5 |
--------------------------------------------------------------------------------
| Return on capital | % | 50.4 | 29.5 | 17.2 | 13.7 | 10.8 |
| employed | | | | | | |
--------------------------------------------------------------------------------
| Current ratio | | 1.3 | 1.4 | 1.1 | 1.1 | 1.5 |
--------------------------------------------------------------------------------
| Solidity | % | 36.1 | 28.3 | 23.7 | 29.1 | 42.6 |
--------------------------------------------------------------------------------
| Gearing | % | 7.0 | 57.3 | 88.1 | 80.2 | 27.8 |
--------------------------------------------------------------------------------
| Shares in figures | | | | | | |
--------------------------------------------------------------------------------
| Earnings per share, | EUR | 2.17 | 1.17 | 0.43 | 0.33 | 0.22 |
| basic | | | | | | |
--------------------------------------------------------------------------------
| Earnings per share, | EUR | 2.13 | 1.15 | 0.42 | 0.32 | 0.22 |
| diluted | | | | | | |
--------------------------------------------------------------------------------
| Equity per share | EUR | 4.80 | 3.77 | 2.66 | 2.44 | 2.81 |
--------------------------------------------------------------------------------
| Cash flow per share | EUR | 3.08 | 1.39 | 0.86 | 0.14 | 0.43 |
--------------------------------------------------------------------------------
| Dividend per share | EUR | 0.80* | 0.45 | 0.28 | 0.26 | 0.50 |
--------------------------------------------------------------------------------
| Dividend / earnings | % | 36.9 | 38.5 | 64.3 | 80.2 | 227.3 |
--------------------------------------------------------------------------------
| Effective dividend | % | 3.4 | 2.0 | 2.6 | 3.2 | 7.2 |
| yield | | | | | | |
--------------------------------------------------------------------------------
| Price / earnings | EUR | 10.9 | 19.1 | 24.3 | 24.8 | 31.4 |
--------------------------------------------------------------------------------
| Trading low / high | EUR | 20.68 / | 10.23 / | 7.45 / | 6.80 / | 4.30 / |
| | | 34.90 | 22.33 | 10.49 | 8.88 | 7.35 |
--------------------------------------------------------------------------------
| Average share price | EUR | 27.41 | 15.04 | 8.94 | 7.70 | 5.62 |
--------------------------------------------------------------------------------
| Share price on 31 | | 23.58 | 22.30 | 10.41 | 8.13 | 6.90 |
| December | | | | | | |
--------------------------------------------------------------------------------
| Year-end market | MEUR | 1437.9 | 1 322.0 | 594.1 | 458.4 | 387.6 |
| capitalization | | | | | | |
--------------------------------------------------------------------------------
| Number traded | (1000 | 128 266 | 114 023 | 73 164 | 63 700 | 50 648 |
| | ) | | | | | |
--------------------------------------------------------------------------------
| Stock turnover | % | 219.2 | 192.3 | 128.1 | 112.9 | 90.2 |
--------------------------------------------------------------------------------
| * The Board's | | | | | | |
| proposal to the AGM | | | | | | |
--------------------------------------------------------------------------------
CALCULATION OF KEY FIGURES
Return on equity (%) = (Income before extraordinary items - taxes) x 100 : Total
equity (average during the period)
Return on capital employed = (Income before taxes + interest paid + other
financing cost) x 100 : (Total amount of equity and liabilities - non-interest
bearing debts (average during the period))
Current ratio = Current assets : Current liabilities
Solidity (%)= Shareholders' equity x 100 : (Total amount of equity and
liabilities - advance payment received)
Gearing (%) = (Interest-bearing liabilities - liquid assets - loans receivable)
x 100 : Total equity
Earnings per share = (Net income +/- extraordinary items) : Average number of
shares outstanding
Earnings per share, diluted= (Net income +/- extraordinary items) : Average
fully diluted number of shares outstanding
Equity per share = Shareholders' equity : Number of shares outstanding
Cash flow per share = Net cash flow from operating activities : Average number
of shares outstanding
Effective dividend yield (%) = = Dividend per share x 100 : Share price at the
end of financial year
Price per earnings = Share price at the end of financial year : Earnings per
share
Year -end market capitalization = Number of shares outstanding multiplied by the
share price at the end of year
Average number of personnel = Calculated as average of number of personnel in
quarters
ACCOUNTING PRINCIPLES
The presented financial information is construed according to the recognition
and measurement principles of International Financial Reporting Standards
(IFRS).
Konecranes applies the same accounting policies as we applied in the 2006 annual
financial statements, except for the change in Segment reporting.
As January 1, 2007, Konecranes branded spare parts are reported in the Service
Business Area, while they were earlier partly included in Standard Lifting. The
geographical Segment reporting structure has also been changed. The new
geographical segments are Europe, Middle East, Africa (EMEA), Americas (AME) and
Asia-Pacific (APAC). The earlier structure was Nordic and Eastern Europe, EU
(excl.Nordic), Americas and Asia-Pacific.
The figures presented in the tables above have been rounded to one decimal,
which should be taken into account when reading the sum figures.
The year-end report has been subject to audit.
Events on February 8, 2008
Analyst and press briefing
A luncheon presentation for media and analysts will be held at Konecranes office
in Helsinki at 12.00 noon Finnish Time (address: Eteläesplanadi 22 B).
Live webcast
A live webcast of the presentation for analysts and media will begin at 12.00
noon Finnish Time and can be followed at www.konecranes.com.
Internet
This report and presentation material is available on the Company's investor
site at www.konecranes.com/investor immediately after publication. A recording
of the webcast will be available on the Internet later on the same day.
Dividend proposal
The Board of Directors proposes to the AGM that a dividend of EUR 0.80 per share
will be paid for the fiscal year 2007. The dividend will be paid to
shareholders, who are entered in the company's share register maintained by the
Finnish Central Securities Depository Ltd. on the record date for payments of
dividends on March 18, 2008. The actual payment of dividend will take place on
March 28, 2008.
Annual General Meeting
The Annual General Meeting 2008 will be held on Thursday, Febuary 13, 2008 at
11.00 a.m. at the Company's auditorium (address: Koneenkatu 8, 05830 Hyvinkää).
A press release on the decisions made at the AGM will be published upon
conclusion of the meeting.
The proposals for the AGM 2008 will be published on February 8, 2008.
Next report
Konecranes Interim Report January-March 2008 will be published on April 29, 2008
at 10.00 a.m.
KONECRANES PLC
Paul Lönnfors
IR Manager
FURTHER INFORMATION
Mr Pekka Lundmark, President and CEO, tel. +358-20 427 2000
Mr Teo Ottola, Chief Financial Officer, tel. +358-20 427 2040,
Mr Paul Lönnfors, IR Manager, tel. +358-20 427 2050
DISTRIBUTION
OMX Nordic Exchange Helsinki
Media
