Q2: STRONG
GROWTH
AND MARGIN
IMPROVEMENT
CONTINUES
3 August, 2006
Pekka Lundmark, President & CEO
Results Q2/2006 1
Orders Received
Meur
400
350
300
250
200
150
100
50
0
Results Q2/2006 3
Order Book by Business Area
MEUR
Maintenance Services
Standard Lifting Equipment
Special Cranes
700
600
500
400
300
200
100
0
Q1/05
Q2/05
Q3/05
Q4/05
Q1/06
Q2/06
Results Q2/2006 5
New President, Region EMEA Appointed
• Pierre Boyer (46), graduate from
HEC, France
• President, Region EMEA and
member of the KCI Konecranes
Executive Board effective 1 Sept,
2006
• Currently head of Carrier
Corporation’s Refrigeration
operations in the Nordic,
Netherlands and EMEA areas
Results Q2/2006 6
New Director, Marketing & Communications
Appointed
• Michael Wegmüller (40), M.Sc.
(Econ.)
• Director, Marketing &
Communications and member of
the Konecranes Executive Board
effective 18 Sept, 2006
• Currently Chief Operating Officer
at Publicis Helsinki
Results Q2/2006 7
New Investor Relations Manager Appointed
• Paul Lönnfors (43), B.Sc. (Econ.)
• Investor Relations Manager
effective as of 1 Sept, 2006
• Currently Communications & IR
Manager at KONE Corporation
Results Q2/2006 8
Acquisition of MMH Holdings, Inc.
•
•
•
•
•
•
•
•
•
•
MMH figures included into KCI Konecranes for 1 month
MMH Sales FY October 2005 apprx. 140 MEUR
Debt-free acquisition price apprx. 56 MEUR
Expected sales in June-December 2006 apprx. 90 MEUR,
EBITDA margin expected at 8% and EBIT margin at 6%
Expected positive EPS effect in 2006 of EUR 0.03,
annualised the effect before synergies is EUR 0.06
Employs apprx. 990 people
Leading P&H brand name
Complementary product offering
Large installed base to boost Maintenance Services in North America
Local presence in USA, Canada, Mexico and Chile
Results Q2/2006 9
Acquisition of MMH Holdings, Inc.
Complements the Offering
• Good position in Steel, Nuclear Power and Wood Handling
Coil Handling Crane
Hot Metal Ladle Crane
Nuclear Dome Crane
Results Q2/2006 10
Q
1/
0
Q 2
2/
0
Q 2
3/
0
Q 2
4/
0
Q 2
1/
0
Q 3
2/
03
Q
3/
0
Q 3
4/
0
Q 3
1/
0
Q 4
2/
0
Q 4
3/
0
Q 4
4/
04
Q
1/
0
Q 5
2/
0
Q 5
3/
0
Q 5
4/
0
Q 5
1/
06
Q
2/
06
Net Sales
MEUR
400
350
300
250
200
150
100
50
0
* 2004 - 2005 according to IFRS
Results Q2/2006 11
Operating Profit and Margin
EBIT
MEUR
EBIT Margin
25
10%
9%
20
8%
7%
15
6%
5%
10
4%
3%
5
2%
1%
0%
Q
1/
0
Q 2
2/
0
Q 2
3/
0
Q 2
4/
0
Q 2
1/
0
Q 3
2/
0
Q 3
3/
0
Q 3
4/
0
Q 3
1/
0
Q 4
2/
0
Q 4
3/
0
Q 4
4/
0
Q 4
1/
0
Q 5
2/
0
Q 5
3/
0
Q 5
4/
0
Q 5
1/
0
Q 6
2/
06
0
* 2004 - 2005 according to IFRS
Results Q2/2006 12
LTM Sales and Operating Margin
MEUR
1400
LTM Sales
LTM EBIT Margin
1200
1000
8%
7%
6%
5%
800
4%
600
3%
400
2%
1%
0
0%
Q
1/
0
Q 2
2/
0
Q 2
3/
0
Q 2
4/
0
Q 2
1/
0
Q 3
2/
03
Q
3/
03
Q
4/
03
Q
1/
0
Q 4
2/
0
Q 4
3/
0
Q 4
4/
0
Q 4
1/
0
Q 5
2/
0
Q 5
3/
05
Q
4/
05
Q
1/
0
Q 6
2/
06
200
Results Q2/2006 13
Sales Split by Business Area, %
34
30
35
39
LTM
2005
31
31
Standard Lifting
Service
Heavy Lifting
Note: Sales numbers include internal sales
Results Q2/2006 14
Sales by Market Area, %
30
32
29
31
LTM
20
2005
18
18
22
Nordic & Eastern Europe
Asia-Pacific
EU (w/o Nordic)
Americas
Results Q2/2006 15
Sales by Industry LTM, %
Petrochemical 3 %
Steel & other
warehousing 3 %
Pulp and paper 5 %
Power plants 4 %
General
Manufacturing 21 %
Resellers 10 %
OEM crane builders 4 %
LTM
Automotive 3 %
Construction 2 %
Primary metals 16 %
Transport,
Shipping 6 %
Aviation,
Aerospace 1 %
Shipyards 3 %
Harbours 13 %
Others 5 %
1%
Refuse
Handling
Results Q2/2006 16
Sales by Industry LTM, %
Results Q2/2006 17
0
Q 2
3/
0
Q 2
4/
0
Q 2
1/
03
Q
2/
0
Q 3
3/
0
Q 3
4/
0
Q 3
1/
0
Q 4
2/
0
Q 4
3/
0
Q 4
4/
0
Q 4
1/
0
Q 5
2/
0
Q 5
3/
0
Q 5
4/
0
Q 5
1/
0
Q 6
2/
06
2/
Q
02
1/
Q
Maintenance Services Orders
MEUR
120
100
80
60
40
20
0
* 2005-2005 according to IFRS
Results Q2/2006 18
Growth in Maintenance Contract Base
Number of Cranes
MEUR
Value
300,000
90
80
250,000
70
200,000
60
50
150,000
40
100,000
30
20
50,000
10
0
0
1999
2000
2001
2002
2003
2004
2005
Q2/06
Results Q2/2006 19
Q
1/
02
Q
2/
0
Q 2
3/
0
Q 2
4/
02
Q
1/
0
Q 3
2/
0
Q 3
3/
03
Q
4/
0
Q 3
1/
0
Q 4
2/
04
Q
3/
0
Q 4
4/
0
Q 4
1/
05
Q
2/
0
Q 5
3/
0
Q 5
4/
05
Q
1/
0
Q 6
2/
06
Maintenance Sales
MEUR
140
120
100
80
60
40
20
0
* 2004 - 2005 according to IFRS
Results Q2/2006 20
Maintenance Operating Profit
and Margin
EBIT
EBIT Margin
MEUR
10
10%
8
8%
6
6%
4
4%
2
2%
0
0%
2/
Q
1/
Q
0
Q 2
3/
0
Q 2
4/
0
Q 2
1/
03
Q
2/
03
Q
3/
0
Q 3
4/
0
Q 3
1/
0
Q 4
2/
04
Q
3/
04
Q
4/
0
Q 4
1/
0
Q 5
2/
0
Q 5
3/
05
Q
4/
0
Q 5
1/
0
Q 6
2/
06
12%
02
12
* 2004 - 2005 according to IFRS
Results Q2/2006 21
Maintenance LTM Sales
and Operating Margin
LTM Sales
MEUR
LTM EBIT Margin
%
500
9
450
8
400
7
350
300
250
200
150
6
5
4
3
2
50
1
0
0
Q
1/
02
Q
2/
02
Q
3/
02
Q
4/
02
Q
1/
03
Q
2/
03
Q
3/
03
Q
4/
0
Q 3
1/
0
Q 4
2/
0
Q 4
3/
0
Q 4
4/
0
Q 4
1/
0
Q 5
2/
0
Q 5
3/
0
Q 5
4/
0
Q 5
1/
0
Q 6
2/
06
100
Results Q2/2006 22
Standard Lifting Equipment Orders
MEUR
180
160
140
120
100
80
60
40
20
0
Results Q2/2006 23
Standard Lifting Equipment Sales
MEUR
160
140
120
100
80
60
40
20
0
Results Q2/2006 24
Standard Lifting Operating
Profit and Margin
EBIT
EBIT Margin
MEUR
16
14
12%
10%
12
10
8
6
8%
6%
4%
4
2
0
* 2004 - 2005 according to IFRS
2%
0%
Results Q2/2006 25
Standard Lifting LTM Sales and Operating
Margin
LTM Sales
MEUR
500
450
400
350
300
250
200
150
100
LTM EBIT Margin
%
12
11
10
9
8
7
6
5
4
3
2
1
0
Results Q2/2006 26
Q
1/
02
Q
2/
02
Q
3/
02
Q
4/
02
Q
1/
03
Q
2/
03
Q
3/
03
Q
4/
03
Q
1/
04
Q
2/
04
Q
3/
04
Q
4/
04
Q
1/
05
Q
2/
05
Q
3/
05
Q
4/
05
Q
1/
06
Q
2/
06
Special Cranes Orders
MEUR
160
140
120
100
80
60
40
20
0
Results Q2/2006 27
Q
1/
02
Q
2/
02
Q
3/
0
Q 2
4/
0
Q 2
1/
0
Q 3
2/
03
Q
3/
03
Q
4/
0
Q 3
1/
0
Q 4
2/
0
Q 4
3/
04
Q
4/
0
Q 4
1/
0
Q 5
2/
0
Q 5
3/
0
Q 5
4/
05
Q
1/
0
Q 6
2/
06
Special Cranes Sales
MEUR
120
100
80
60
40
20
0
Results Q2/2006 29
Special Cranes Operating Profit and Margin
EBIT
MEUR
EBIT Margin
9
14%
8
12%
7
10%
6
5
8%
4
6%
3
4%
2
2%
0
0%
Q
1/
0
Q 2
2/
0
Q 2
3/
0
Q 2
4/
0
Q 2
1/
0
Q 3
2/
0
Q 3
3/
0
Q 3
4/
0
Q 3
1/
0
Q 4
2/
0
Q 4
3/
0
Q 4
4/
0
Q 4
1/
0
Q 5
2/
0
Q 5
3/
0
Q 5
4/
0
Q 5
1/
0
Q 6
2/
06
1
* 2004 - 2005 according to IFRS
Results Q2/2006 30
Special Cranes LTM Sales and
Operating Margin
LTM Sales
MEUR
LTM EBIT Margin
%
450
10
400
9
350
8
300
250
7
6
5
200
150
4
3
2
50
1
0
0
Q
1/
0
Q 2
2/
0
Q 2
3/
0
Q 2
4/
0
Q 2
1/
03
Q
2/
03
Q
3/
03
Q
4/
03
Q
1/
04
Q
2/
0
Q 4
3/
0
Q 4
4/
0
Q 4
1/
0
Q 5
2/
0
Q 5
3/
0
Q 5
4/
0
Q 5
1/
0
Q 6
2/
06
100
Results Q2/2006 31
Net Income
MEUR
24,6
24,1
23
20,7
18,4
19
15
11
6,7
7
-0,6
3
-1
2002
2003
2004
2005
1-6/05
1-6/06
-5
Results Q2/2006 32
Return on Capital Employed
ROCE %
22.6
24
20
17.8
17.2
16
13.7
10.8
12
8
4
0
2002
2003
2004
2005
LTM
Results Q2/2006 33
Return on Equity
ROE %
30.2
32
28
24
20
16
16.6
14.2
12.5
12
7.5
8
4
0
2002
2003
2004
2005
LTM
Results Q2/2006 34
Guidance Full Year 2006
• At the moment we see no signs of slowing demand.
• Full year sales growth is expected to be 40-45 %.
• The positive margin development is expected to continue.
Results Q2/2006 35
Statement of Income
1-6/2006
MEUR
1-6/2005
MEUR
1-12/2005
MEUR
636.6
427.4
970.8
Other operating income
0.9
1.2
2.2
Depreciation
-9.9
-7.3
-15.6
-592.6
-407.4
-908.1
35.0
13.9
49.3
Share of result of associated companies
and joint ventures
0.3
0.2
0.5
Financial income and expenses
-5.8
-15.0
-15.8
Income before taxes
29.5
-0.9
34.1
Taxes
-8.9*
0.3*
-10.0
Net income
20.7
-0.6
24.1
Earnings per share, basic (EUR)
0.36
-0.01
0.43
Earnings per share, diluted (EUR)
0.35
-0.01
0.42
Sales
Other operating expenses
Operating income (EBIT)
* According to estimated tax rate
Results Q2/2006 37
Balance Sheet
6/2006
MEUR
6/2005
MEUR
12/2005
MEUR
Non-current assets
218.3
134.0
197.6
Inventories
218.6
152.1
157.0
Receivables and other current assets
354.5
230.6
325.4
Cash and cash equivalents
40.9
31.1
44.0
Total assets
832.3
547.8
724.0
Equity
173.3
127.1
152.1
Non-current liabilities
173.5
56.9
106.9
Provisions
20.8
15.8
20.1
Current liabilities
464.7
348.0
444.9
Total equity and liabilities
832.3
547.8
724.0
Gearing %
102.1
91.3
88.1
Solidity %
24.1
26.5
23.7
Equity/share, EUR
2.95
2.25
2.66
Results Q2/2006 38
Cash Flow Statement
MEUR
1-6/2006
1-6/2005
Operating income before change in net working capital
44.8
21.3
Change in net working capital
-6.6
3.4
Cash flow from operations before financing items and taxes
38.2
24.7
Financing items and taxes
-12.1
-8.3
Net cash flow from operating activities
26.1
16.5
Net cash used in investing activities
-56.8
-9.4
Cash flow before financing activities
-30.7
7.0
Dividends paid
-15.8
-14.8
Change in interest bearing debt
33.7
17.2
Proceeds from options excercised
10.5
0
Net cash used in financing activities
28.5
2.4
Translation differences in cash
-0.9
1.0
Change of cash and cash equivalents
-3.1
10.4
Results Q2/2006 39
Net Cash Flow from Operating
Activities/Share
EUR
2
1.14
1
0.86
0.45
0.43
0.29
0.14
0
2002
2003
2004
2005
1-6/05
1-6/06
Results Q2/2006 40
Key Figures
MEUR
1-6/2006
MEUR
1-6/2005
% Change
Sales
636.6
427.4
48.9
Operating Income (EBIT)
35.0
13.9
152.3
Income before taxes
29.5
-0.9
Net Income
20.7
-0.6
Net cash flow from operating activities
26.1
16.5
Net cash flow from operating activities per share
0.45
0.29
Net interest bearing debt
177.0
116.1
Net gearing (%)
102.1
91.3
Solidity (%)
24.1
26.5
Return on capital employed (%), LTM
22.6
15.1
Return on equity (%), LTM
30.2
10.6
Equity per share (EUR)
2.95
2.25
7.7
7.4
Personnel at end of period
7 256
4 940
Personnel on average
6 435
4 814
Investments
33.7
Results Q2/2006 41
• Pekka Lundmark, President and CEO
tel. +358-20 427 2000 or [email protected]
• Teuvo Rintamäki, Chief Financial Officer
tel.+358-20-427 2040 or [email protected]
• Paul Lönnfors, Investor Relations Manager
tel.+358-20-427 2050 or [email protected]
www.konecranes.com
Results Q2/2006 42