Konecranes Oyj — Earnings Release 2021

Apr 28, 2021

Konecranes Plc: Interim Report January-March 2021

Konecranes Plc: Interim Report January-March 2021

KONECRANES PLC INTERIM REPORT JANUARY-MARCH 2021 APRIL 28, 2021 8:30 am EEST

Konecranes Plc: Interim Report January-March 2021

STRONG ORDERS AND RECORD-HIGH Q1 PROFITABILITY

This release is a summary of Konecranes Plc’s Interim Report January-March 2021.
The complete report is attached to this release in pdf format and is also
available on Konecranes’ website at www.konecranes.com.

The figures presented in this report are unaudited. Figures in brackets, unless
otherwise stated, refer to the same period a year earlier.

FIRST QUARTER HIGHLIGHTS

• Order intake EUR 762.8 million (737.0), +3.5 percent (+6.3 percent on a
  comparable currency basis), driven by order intake increase in Business Area
  Port Solutions particularly
• Service annual agreement base value increased 0.6 percent (+1.5 percent on a
  comparable currency basis) to EUR 283.6 million (281.9). Service order intake
  was EUR 255.2 million (266.1), -4.1 percent (+0.1 percent on a comparable
  currency basis)
• Order book EUR 1,866.7 million (1,961.3) at the end of March, -4.8 percent (
  -4.0 percent on a comparable currency basis)
• Sales EUR 704.0 million (769.6), -8.5 percent (-6.0 percent on a comparable
  currency basis), sales declined in all three Business Areas
• Adjusted EBITA margin 8.0 percent (2.7) and adjusted EBITA EUR 56.2 million
  (21.1). Focus on strategic initiatives and cost management continued. The
  comparison period included a large project cost overrun in Port Solutions and
  process crane project costs in Industrial Equipment.
• Operating profit EUR 37.5 million (7.8), 5.3 percent of sales (1.0),
  restructuring and transaction costs totaled EUR 10.3 million (4.3)
• Earnings per share (diluted) EUR 0.23 (0.14)
• Free cash flow EUR 17.7 million (53.8)
• Net debt EUR 569.2 million (771.3) and gearing 47.4 percent (61.7)

SECOND QUARTER DEMAND OUTLOOK

The worldwide demand picture remains subject to volatility due to the COVID-19
pandemic.

In Europe and North America, the current demand environment within the
industrial customer segments has improved and is approaching the pre-COVID-19
level. In Asia-Pacific, demand environment has started to show signs of
improvement also outside China but remains below the pre-COVID-19 level.

Global container throughput continues to be at a record high, and long-term
prospects related to global container handling remain good overall.

FINANCIAL GUIDANCE

Konecranes expects net sales to increase in full-year 2021 compared to 2020.
Konecranes expects the full-year 2021 adjusted EBITA margin to improve from
2020.

KEY FIGURES

[][][][][][][][]
First quarter
1-3/ 1-3/ Change% R12M 1-12/
2021 2020   2020
Orders received, MEUR 762.8 737.0 3.5 2,753.1 2,727.3
Order book at end of 1,866.7 1,961.3 -4.8 1,715.5
period, MEUR
Sales total, MEUR 704.0 769.6 -8.5 3,113.4 3,178.9
Adjusted EBITDA, MEUR 79.0 46.0 71.9 389.8 356.7
[1]
Adjusted EBITDA, % [1] 11.2% 6.0% 12.5% 11.2%
Adjusted EBITA, MEUR 56.2 21.1 167.1 296.0 260.8
[2]
Adjusted EBITA, % [2] 8.0% 2.7% 9.5% 8.2%
Adjusted operating 47.8 12.1 296.1 260.6 224.9
profit, MEUR [1]
Adjusted operating 6.8% 1.6% 8.4% 7.1%
margin, % [1]
Operating profit, MEUR 37.5 7.8 381.0 203.5 173.8
Operating margin, % 5.3% 1.0% 6.5% 5.5%
Profit before taxes, 26.6 16.1 65.8 180.9 170.3
MEUR
Net profit for the 18.4 11.5 60.0 129.8 122.9
period, MEUR
Earnings per share, 0.23 0.14 58.7 1.63 1.54
basic, EUR
Earnings per share, 0.23 0.14 58.7 1.63 1.54
diluted, EUR
Interest-bearing net 47.4% 61.7% 46.1%
debt / Equity, %
Net debt / Adjusted 1.5 2.2 1.6
EBITDA, R12M [1]
Return on capital 8.9% 8.3%
employed, %
Adjusted return on 12.8% 11.1%
capital employed, %
[3]
Free cash flow, MEUR 17.7 53.8 329.9 366.1
Average number of 16,738 17,023 -1.7 17,027
personnel during the
period

1) Excluding adjustments, see also note 10 in the summary financial statements
2) Excluding adjustments and purchase price allocation amortization, see also
note 10 in the summary financial statements
3) ROCE excluding adjustments, see also note 10 in the summary financial
statements

PRESIDENT AND CEO ROB SMITH:

Konecranes delivered a strong start to 2021. High performance and improved
business excellence across the whole organization resulted in an all-time high
Q1 adjusted EBITA margin of 8.0%, our third consecutive quarter of record
-breaking profitability. Strong Q1 orders, together with ongoing excellent
execution and traction from strategic initiatives, give us a solid foundation
for the whole year’s performance.

While COVID-19 related market volatility is not over, overall market sentiment
continued to improve in Q1 compared to the previous quarters. Activity remained
high in the port sector and also improved with our industrial customers. As a
result, Konecranes’ Q1 order intake grew 6.3% year-on-year in comparable
currencies and in all three Business Areas orders received were flat to higher
versus a year ago. Boding well for the full year, we saw good order growth
especially in our short-cycle products.

COVID-19, a lower orderbook, component availability and container shortages
negatively impacted on our Q1 sales, which decreased 6.0% year-on-year in
comparable currencies. Sales decreased in all three Business Areas. Despite the
topline decline, we posted an all-time high adjusted EBITA margin of 8.0% for
Q1, driven by high performance, improving business excellence and efficient cost
management.

Q1 Service order intake improved by 0.1% year-on-year in comparable currencies.
Order intake development was positive in EMEA and the Americas, but continues to
lag in APAC due to COVID-19. Service’s focus remained on business excellence and
cost management, and its 16.7% adjusted EBITA margin set a third consecutive
quarterly profitability record. In addition, the agreement base value grew by
1.5% from the previous year and 0.7% from the previous quarter in comparable
currencies, demonstrating the resiliency of our Service growth engine during the
pandemic.

Industrial Equipment’s external order intake grew by 5.9% in comparable
currencies, driven by the components business. Net sales were impacted
negatively by supply chain issues resulting from COVID-19, component shortage
and logistics delays. The adjusted EBITA margin was 0.1%, an improvement of 4.1
percentage points from the previous year, mainly driven by continued good
progress with our strategic initiatives, especially in the process crane
business.

In Port Solutions, the previous quarter’s good order momentum continued, and
order intake grew 13.4% from the previous year in comparable currencies. Rubber
Tire Gantry Cranes, Mobile Harbor Cranes and Lift Trucks had a strong order
intake for the quarter. Port Solutions had a good start to the year in terms of
profitability, with an adjusted EBITA margin of 7.5%. Improved project
management execution and cost management continued, and part of the positive
margin development came from reversing a project provision based upon having
secured a change in supply concept with the customer.

Our announced merger with Cargotec is progressing to plan with merger control
filings underway. Together with Cargotec we will create a global leader in
sustainable material flow. The merger is fully aligned with our strategic plans
and growth ambitions, and is expected to take place on 1 January 2022, given all
conditions and approvals for completion are fulfilled. Until then, both
companies will operate fully separately and independently.

For the coming quarters, while we expect market volatility to continue due to
the pandemic, we have updated our demand outlook for Q2 to reflect improved
market sentiment. We also reiterate our full-year guidance for 2021 despite
component availability challenges which negatively impacted net sales in Q1 and
continue to impact operations in Q2. We expect net sales to increase in full
-year 2021 compared to 2020, and given our performance track record and the
ongoing positive impact of our strategic initiatives, we expect our full-year
adjusted EBITA margin to improve from 2020.

Although the pandemic continues, Konecranes has a rock-solid foundation for
growth and future success. We maintain our clear strategic focus and our
commitment to business excellence, high performance and sustainability. Q1 and
the previous quarters have positioned Konecranes well for the future, and we
will emerge from the pandemic strong and at new levels of capability and
achievement.

ANALYST AND PRESS BRIEFING

A live international webcast for analysts, investors and media will be held on
April 28, 2021, at 10:30 a.m. EEST. The interim report will be presented by
Konecranes’ President and CEO Rob Smith and CFO Teo Ottola.

Please see the press release dated April 14, 2021 for the conference call
details.

NEXT REPORT

Konecranes Plc plans to publish half-year financial report January-June 2021 on
July 28, 2021.

KONECRANES PLC

Kiira Fröberg
Vice President, Investor Relations

FURTHER INFORMATION
Kiira Fröberg,
Vice President, Investor Relations,
tel. +358 (0) 20 427 2050

IMPORTANT NOTICE

The Merger and the merger consideration securities have not been and will not be
registered under the U.S. Securities Act, and may not be offered, sold or
delivered within or into the United States, except pursuant to an applicable
exemption of, or in a transaction not subject to, the U.S. Securities Act.

The information in this release is not directed to, or intended for distribution
to or use by, any person or entity that is a citizen or resident of, or located
in, any locality, state, country or other jurisdiction where such distribution
or use would be contrary to law or regulation or which would require any
registration or licensing within such jurisdiction and it does not constitute an
offer of or an invitation by or on behalf of, Konecranes, or any other person,
to purchase any securities.

The information in this release contains forward-looking statements, which are
information on Konecranes’ current expectations and projections relating to its
financial condition, results of operations, plans, objectives, future
performance and business. These statements may include, without limitation, any
statements preceded by, followed by or including words such as “target,”
“believe,” “expect,” “aim,” “intend,” “may,” “anticipate,” “estimate,” “plan,”
“project,” “will,” “can have,” “likely,” “should,” “would,” “could” and other
words and terms of similar meaning or the negative thereof. Such forward-looking
statements involve known and unknown risks, uncertainties and other important
factors beyond Konecranes’ control that could cause Konecranes’ actual results,
performance or achievements to be materially different from the expected
results, performance or achievements expressed or implied by such forward
-looking statements. Such forward-looking statements are based on numerous
assumptions regarding Konecranes’ present and future business strategies and the
environment in which it will operate in the future.

Konecranes is a world-leading group of Lifting Businesses™, serving a broad
range of customers, including manufacturing and process industries, shipyards,
ports and terminals. Konecranes provides productivity enhancing lifting
solutions as well as services for lifting equipment of all makes. In 2020, Group
sales totaled EUR 3.2 billion. The Group has around 16,600 employees in 50
countries. Konecranes shares are listed on the Nasdaq Helsinki (symbol: KCR).

DISTRIBUTION
Nasdaq Helsinki
Major media
www.konecranes.com

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