OREANDA-NEWS. Customers are cautious about investing as economic growth has slowed down across the globe. Companies operating in emerging and commodity markets are particularly under pressure to save costs. Business activity in the North American manufacturing and process industries weakened toward the end of 2015 and demand outlook is more uncertain than a year ago. Demand situation in Europe is stable. Even though the global container throughput has slowed down, our offer base for container handling equipment has remained solid and the order book for 2016 deliveries is good. Continued contract base growth bodes well for the future of the service business.

FINANCIAL GUIDANCE
 

Based on the order book, the service contract base and the near-term demand outlook, sales in 2016 are expected to be higher than in 2015. We expect the 2016 operating profit, excluding non-recurring items, to improve from 2015.

KEY FIGURES

Fourth quarter

January-December
 

10-12/ 2014

10-12/

2013

Change %

1-12/ 2014

1-12/

2013

Change %

Orders received, MEUR

513.3

422.2

21.6

1,903.5

1,920.8

-0.9

Order book at end of period, MEUR

      

979.5

893.5

9.6

Sales total, MEUR

608.1

580.9

4.7

2,011.4

2,099.6

-4.2

EBITDA excluding restructuring costs, MEUR

58.7

52.3

12.3

162.2

154.6

4.9

EBITDA excluding restructuring costs, %

9.7

9.0

  

8.1

7.4

  

Operating profit excluding restructuring costs, MEUR

47.1

42.8

10.0

119.1

115.5

3.1

Operating margin excluding restructuring costs, %

7.7

7.4

  

5.9

5.5

  

EBITDA, MEUR

57.1

49.9

14.5

159.0

140.5

13.1

EBITDA, %

9.4

8.6

  

7.9

6.7

  

Operating profit, MEUR

45.5

39.7

14.5

115.8

84.5

37.1

Operating margin, %

7.5

6.8

  

5.8

4.0

  

Profit before taxes, MEUR

41.6

35.9

15.8

107.4

75.5

42.3

Net profit for the period, MEUR

29.5

22.1

33.4

74.6

49.4

50.9

Earnings per share, basic, EUR

0.51

0.38

34.1

1.28

0.85

51.0

Earnings per share, diluted, EUR

0.51

0.38

34.2

1.28

0.85

51.2

Dividend per share, EUR

      

1.05*

1.05

0.0

Gearing, %

      

33.3

42.1

  

Return on capital employed %

      

17.0

11.6

  

Free cash flow, MEUR

56.1

61.8

  

109.4

64.0

  

Average number of personnel during the period

      

11,920

11,987

-0.6

*The Board’s proposal to the AGM

President and CEO Panu Routila:

“Our Q4 results came close to our expectations with Group orders, sales, and operating profit, excluding non-recurring items, being near the previous year’s levels. Service continued to improve its profitability on a year-on-year basis in the fourth quarter. Its full-year 2015 operating margin, excluding restructuring costs, rose by 0.4 percentage points to 10.4 percent. We were able to generate modest sales growth at comparable currencies despite the fact that many of our industrial customers experienced headwinds in their businesses. Service’s order book and contract base value were up 8.7 percent and 7.5 percent on a year-on-year basis at year-end 2015, respectively, which bodes well for the continued improvements in 2016.

Equipment order intake recovered sequentially, thanks to the pick-up in container handling equipment orders that were on a good level. At the same time, the demand among industrial customers continued to be sluggish, particularly in emerging markets. We cannot be satisfied with the year-on-year decline of EUR 5.0 million in the Equipment Q4 operating profit, excluding restructuring costs. This was mainly due to the 7.1 percent sales decline at comparable currencies, unfavorable sales mix, and a provision of EUR 3.3 million relating to a receivable from a Latin American customer. On the other hand, our cost savings actions are delivering the expected results. Business Area Equipment order book was up 5.3 percent on a year-on-year basis at year-end 2015, incorporating a solid outlook for the container handling equipment deliveries in 2016.

When I took the position as President and CEO in November 2015, I already knew of both the huge potential Konecranes offers as an organization and the value of the expertise it houses. Working hands-on with our people in the months since then has only confirmed this impression.

Our main strength is in the experts we employ. Witnessing their joint efforts toward the success of our businesses is a continuing inspiration, and we aspire to make even better use of this resource to fuel the growth. As chief executive, I want to invest in people, invest in R&D, and invest in sustaining Konecranes as a true technology leader. We do all this to ensure that we serve our customers continuously with better products and services.
 

We are making changes to bring more direct business commandership into our ways of working, and some may welcome this as an overdue development. Our overheads have been too high and therefore we need to reduce our fixed cost base to improve our competitiveness. Renewal is in the air for Konecranes, just as it inevitably lies in the future of the industries we serve.”

BOARD OF DIRECTORS’ PROPOSAL FOR DISPOSAL OF DISTRIBUTABLE FUNDS

The parent company’s non-restricted equity is EUR 276,744,547.45, of which the net income for the year is EUR 164,816,834.32. The Group’s non-restricted equity is EUR 395,615,000.

According to the Finnish Companies Act, the distributable funds of the company are calculated based on the parent company’s non-restricted equity. For the purpose of determining the amount of the dividend, the Board of Directors has assessed the liquidity of the parent company and the economic circumstances subsequent to the end of fiscal year.

Based on such assessments the Board of Directors proposes to the Annual General Meeting that a dividend of EUR 1.05 be paid on each share and that the remaining non-restricted equity is retained in shareholders’ equity.

A pdf version of the Konecranes’ full audited financial statements, including the report of the Board of Directors, and corporate governance statement will be available on the web on March 1, 2016, and the printed version during week 11.

DISCLOSURE PROCEDURE

Konecranes follows the disclosure procedure enabled by Disclosure obligation of the issuer (7/2013) published by the Finnish Financial Supervision Authority. This stock exchange release is a summary of Konecranes Plc’s financial statements bulletin 2015. The complete report is attached to this release in pdf format and is also available on Konecranes’ website at www.konecranes.com.

Analyst and press briefing

An analyst and press conference will be held at restaurant Savoy’s Salikabinetti (address Etel?esplanadi 14) at 11.00 a.m. Finnish time. The 2015 financial statements will be presented by Konecranes’ President and CEO Panu Routila and CFO Teo Ottola.

A live webcast of the conference will begin at 11.00 a.m. at www.konecranes.com. Please see the stock exchange release on January 15, 2016 for the conference call details.