Konecranes Oyj — Earnings Release 2022

Feb 2, 2023

Konecranes Plc: Financial statement release 2022

Konecranes Plc: Financial statement release 2022

KONECRANES PLC FINANCIAL STATEMENT RELEASE 2022 FEBRUARY 2, 2023 8:30 am EET

Konecranes Plc: Financial statement release 2022

Solid performance continued

This release is a summary of Konecranes Plc's Financial statement release 2022.
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.

Since the beginning of June, Service and Industrial Equipment have been focused
under the same leadership. Following this change, Konecranes has two Business
Areas: Industrial Service and Equipment, and Port Solutions. Konecranes
continues to report three segments: Service, Industrial Equipment, and Port
Solutions, and the segment figures are comparable with historical figures.

FOURTH QUARTER HIGHLIGHTS

• Order intake EUR 879.1 million (892.3), -1.5 percent (-4.5 percent on a
  comparable currency basis), order intake decreased in Service but increased in
  Industrial Equipment and Port Solutions

• Service annual agreement base value EUR 306.9 million (290.4), +5.7 percent
  (+3.4 percent on a comparable currency basis)

• Service order intake EUR 283.2 million (307.7), -7.9 percent (-13.7 percent on
  a comparable currency basis)

• Order book EUR 2,901.7 million (2,036.8) at the end of December, +42.5 percent
  (+41.1 percent on a comparable currency basis)

• Sales EUR 1,020.9 million (948.9), +7.6 percent (+4.4 percent on a comparable
  currency basis), sales increased in Service and Industrial Equipment but
  decreased in Port Solutions

• Adjusted EBITA margin 11.6 percent (11.9) and adjusted EBITA EUR 118.2 million
  (113.2); the decrease in the adjusted EBITA margin was mainly attributable to
  lower underlying sales volumes

• Operating profit EUR 103.0 million (86.0), 10.1 percent of sales (9.1),
  adjustments totaled EUR 8.2 million (19.0), mainly comprising of restructuring
  costs

• Earnings per share (diluted) EUR 0.91 (0.86)

• Free cash flow EUR 90.8 million (65.7)

FULL YEAR 2022 HIGHLIGHTS

• Order intake EUR 3,928.9 million (3,175.5), +23.7 percent (+19.2 percent on a
  comparable currency basis)

• Service order intake EUR 1,161.9 million (1,078.3), +7.8 percent (+1.5 percent
  on a comparable currency basis)

• Sales EUR 3,364.8 million (3,185.7), +5.6 percent (+1.8 percent on a
  comparable currency basis)

• Adjusted EBITA margin 9.5 percent (9.8) and adjusted EBITA EUR 318.4 million
  (312.2); the adjusted EBITA margin increased in Service but decreased in
  Industrial Equipment and Port Solutions

• Operating profit EUR 223.2 million (220.0), 6.6 percent of sales (6.9),
  adjustments totaled EUR 63.5 million (59.1), mainly comprising of costs related
  to the impacts of the war in Ukraine, merger related costs, and restructuring
  costs

• Earnings per share (diluted) EUR 1.77 (1.85)

• Free cash flow EUR 24.6 million (137.7)

• Net debt EUR 688.3 million (541.6) and gearing 48.0 percent (39.8)

• The Board of Directors proposes a dividend of EUR 1.25 (1.25) per share for
  2022

FIRST QUARTER DEMAND OUTLOOK

The worldwide demand picture remains subject to volatility and uncertainty.

Despite the weakened global macro indicators, our overall demand environment
within industrial customer segments has remained good and continues on a healthy
level. That said, we have started to see some signs of weakening in all three
regions.

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

FINANCIAL GUIDANCE

Konecranes expects net sales to increase in full-year 2023 compared to 2022.
Konecranes expects the full-year 2023 adjusted EBITA margin to improve from
2022.

KEY FIGURES

+----------------------+-------+--------+------+-------+-------+------+
| |Fourth quarter |January-December |
+----------------------+-------+--------+------+-------+-------+------+
| | 10-12/|  10-12/|Change|1-12/ | 1-12/ |Change|
| |2022 |2021 | |2022 |2021 |% |
| | | |% | | | |
+----------------------+-------+--------+------+-------+-------+------+
|Orders received, MEUR |879.1 |892.3 |-1.5 |3,928.9|3,175.5|23.7 |
+----------------------+-------+--------+------+-------+-------+------+
|Order book at end of | | | |2,901.7|2,036.8|42.5 |
|period, MEUR | | | | | | |
+----------------------+-------+--------+------+-------+-------+------+
|Sales total, MEUR |1,020.9|948.9 |7.6 |3,364.8|3,185.7|5.6 |
+----------------------+-------+--------+------+-------+-------+------+
|Adjusted EBITDA, MEUR |140.2 |134.8 |4.0 |406.1 |398.9 |1.8 |
|1 | | | | | | |
+----------------------+-------+--------+------+-------+-------+------+
|Adjusted EBITDA, % 1 |13.7% |14.2% | |12.1% |12.5% | |
+----------------------+-------+--------+------+-------+-------+------+
|Adjusted EBITA, MEUR 2|118.2 |113.2 |4.4 |318.4 |312.2 |2.0 |
+----------------------+-------+--------+------+-------+-------+------+
|Adjusted EBITA, % 2 |11.6% |11.9% | |9.5% |9.8% | |
+----------------------+-------+--------+------+-------+-------+------+
|Adjusted operating |111.2 |105.0 |5.9 |286.6 |279.1 |2.7 |
|profit, MEUR 1 | | | | | | |
+----------------------+-------+--------+------+-------+-------+------+
|Adjusted operating |10.9% |11.1% | |8.5% |8.8% | |
|margin, % 1 | | | | | | |
+----------------------+-------+--------+------+-------+-------+------+
|Operating profit, MEUR|103.0 |86.0 |19.8 |223.2 |220.0 |1.4 |
+----------------------+-------+--------+------+-------+-------+------+
|Operating margin, % |10.1% |9.1% | |6.6% |6.9% | |
+----------------------+-------+--------+------+-------+-------+------+
|Profit before taxes, |99.1 |81.6 |21.4 |190.7 |192.5 |-0.9 |
|MEUR | | | | | | |
+----------------------+-------+--------+------+-------+-------+------+
|Net profit for the |72.5 |69.2 |4.8 |138.5 |147.4 |-6.0 |
|period, MEUR | | | | | | |
+----------------------+-------+--------+------+-------+-------+------+
|Earnings per share, |0.91 |0.87 |4.6 |1.77 |1.86 |-4.5 |
|basic, EUR | | | | | | |
+----------------------+-------+--------+------+-------+-------+------+
|Earnings per share, |0.91 |0.86 |5.4 |1.77 |1.85 |-4.3 |
|diluted, EUR | | | | | | |
+----------------------+-------+--------+------+-------+-------+------+
|Gearing, % | | | |48.0% |39.8% | |
+----------------------+-------+--------+------+-------+-------+------+
|Net debt / Adjusted | | | |1.7 |1.4 | |
|EBITDA, R12M 1 | | | | | | |
+----------------------+-------+--------+------+-------+-------+------+
|Return on capital | | | |9.0% |9.3% | |
|employed, % | | | | | | |
+----------------------+-------+--------+------+-------+-------+------+
|Adjusted return on | | | |13.4% |13.4% | |
|capital employed, % 3 | | | | | | |
+----------------------+-------+--------+------+-------+-------+------+
|Free cash flow, MEUR |90.8 |65.7 | |24.6 |137.7 | |
+----------------------+-------+--------+------+-------+-------+------+
|Average number of | | | |16,563 |16,625 |-0.4 |
|personnel during the | | | | | | |
|period | | | | | | |
+----------------------+-------+--------+------+-------+-------+------+

1) Excluding adjustments, see also note 11 in the summary financial statements

2) Excluding adjustments and purchase price allocation amortization, see also
note 11 in the summary financial statements

3) ROCE excluding adjustments, see also note 11 in the summary financial
statements

CEO ANDERS SVENSSON:

2022 was a year like no other, without question. In addition to the terrible war
in Ukraine, we faced accelerated inflation, continued global supply chain
constraints and increased market uncertainty - all this while still dealing with
COVID-19 pandemic. Despite the many challenges, Konecranes ended 2022 with a
solid performance. Order intake remained good, and delivery capability continued
to improve. Our quarterly and full-year adjusted EBITA margins did not reach
last year's levels, but Konecranes has demonstrated its ability to navigate in
the most challenging of environments, and I am proud of the hard work and
dedication of our whole team.

While market uncertainty continued in the fourth quarter and macro-economic
indicators are signaling weakening market conditions, our overall demand
sentiment remained solid. The 4.5% year-on-year decrease in Group order intake
in comparable currencies was mainly due to Business Segment Service's tough
comparison period, which included a large modernization order. Short-cycle
orders remained on a healthy level and sequentially grew slightly, indicating
that our customers continued to place orders despite the uncertainty.

In Q4, our sales execution improved again compared to the previous quarters.
Quarterly sales exceeded €1 billion and grew 4.4% in comparable currencies from
the previous year. That said, we continued to face component availability
challenges and other supply chain constraints, and COVID-19 hampered our
performance in APAC. At the year-end, our orderbook was 41.1% higher than a year
ago on a comparable currency basis, reflecting both the strong order intake
during the year as well as delivery challenges.

Despite the sales growth, profitability declined slightly in Q4. Our 11.6%
adjusted EBITA margin was slightly behind last year's record level. The decrease
was mainly driven by lower underlying sales volumes, particularly in Port
Solutions.

Turning to our Business Segments, Service's order intake declined 13.7% year-on
-year in comparable currencies. Excluding the comparison period's large
modernization order, Service order intake grew year-on-year.  Sales increased
7.7% year-on-year in comparable currencies mainly thanks to pricing, leading to
slightly improved profitability and an adjusted EBITA margin of 21.1%. The
agreement base value also continued to grow and was 3.4% higher in comparable
currencies at the end of Q4 versus a year ago.

Industrial Equipment's external order intake grew 2.9% year-on-year in
comparable currencies. Although customer delays and supply chain constraints
continued to impact sales execution, external sales increased 9.2% in comparable
currencies. The adjusted EBITA margin declined slightly year-on-year to 6.0%,
mainly due to inflation. However, the year-on-year profitability gap continued
to narrow from the previous quarters, reflecting the positive impact of the
price increases implemented earlier last year. We expect the positive pricing
impact to continue in 2023.

In Port Solutions, the market environment continued to be favorable. Order
intake totaled €356 million and included a large automation order. Sales
decreased as expected, down 2.6% year-on-year in comparable currencies mainly
due to orderbook timing. At the same time, project execution had a negative
impact on the adjusted EBITA margin, which declined to 6.5%. Following the
strong 2022 market sentiment and order intake, Port Solutions ended the year
with a record-high orderbook of €1.6 billion.

Looking into 2023, we expect the market volatility and uncertainty to continue.
Although our demand environment has remained solid so far, we have started to
see some signs of slowing down within our industrial customer segments also
outside of Europe. We have updated our Q1 demand outlook to reflect the current
market sentiment.

We have also given financial guidance for the year that has started. We expect
our net sales to increase in full-year 2023 compared to 2022 and our full-year
adjusted EBITA margin to improve from 2022. Although our delivery capability has
improved, material availability challenges and supply chain constraints are not
over, and we expect them to continue to impact our performance this year. At the
same time, our high orderbook and the pricing actions we took last year provide
a solid foundation for the new year and give us confidence amidst the market
uncertainty.

Finally, I am proud and excited to lead Konecranes as its new President and CEO.
At the time of my appointment, I referred to Konecranes as a global industry
leader with strong heritage, unique offering and footprint, and great people. My
first months at the company have only confirmed my initial impressions.
Konecranes has many good qualities to build on, and we have much to achieve.
That said, a lot of work lies ahead of us. Together with the Konecranes
Leadership Team, I look forward to hosting our Capital Markets Day in Helsinki
on May 10, 2023, to share what's next for our company.

ANALYST AND PRESS BRIEFING

A live international webcast and telephone conference for analysts, investors
and media will be arranged on the publishing day at 11:30 a.m. EET. The event
will be held in English. The Financial statement release will be presented by
President and CEO Anders Svensson and CFO Teo Ottola. Questions may be presented
at the end of the conference. The conference will be recorded, and an on-demand
version of the conference will be published on the company's website later
during the day.

The webcast can be watched through the following link:

https://konecranes.videosync.fi/2022-q4

To ask questions, the telephone conference can be joined by registering through
the following link:

http://palvelu.flik.fi/teleconference/?id=10010127

Phone numbers and the conference ID to access the conference will be provided
after the registration. In case you would like to ask a question during the
conference, please dial *5 on your telephone keypad to enter the question queue.

Questions can also be presented in writing through the question form, while
watching the webcast.

NEXT REPORT

Konecranes Plc plans to publish its Interim report, January-March 2023 on April
28, 2023.

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 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 2022, Group sales
totaled EUR 3.4 billion. The Group has approximately 16,500 employees in around
50 countries. Konecranes shares are listed on the Nasdaq Helsinki (symbol: KCR).

DISTRIBUTION

Nasdaq Helsinki

Major media

www.konecranes.com

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