port cranes - review by the ceo...equipment market share and size in 2013 13 review by the ceo...
TRANSCRIPT
REVIEW BY THE CEO
AGM March 27, 2014Pekka Lundmark
© 2014 Konecranes Plc. All rights reserved.
• Ryan Flynn is returning to Konecranes Plc and will start on June 1, 2014
• VP, Strategy & Business Development at BlueScope Steel in Shanghai
• Head of Region APAC at Konecranes in 2009-2013, joined Konecranes in Shanghai in 2005
• Born 1971 and holds BCom and MBA degrees
RYAN FLYNN APPOINTED EXECUTIVE VICE PRESIDENT, HEAD OF BUSINESS AREA EQUIPMENT
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• My two years in Asia
• Key financials in 2013
• Market situation
• Strategy implementation
AGENDA
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MY TWO YEARS IN ASIA
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THERE ARE MORE PEOPLE LIVING INSIDE THIS CIRCLE THAN OUTSIDE OF IT
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Pelindo III Signing Ceremony
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Caterpillar Plant on Batam
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NEW FACTORY IN JEJURI, INDIA
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POLLUTION CAUSING ATTITUDE CHANGE
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KEY FINANCIALS IN 2013
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GROUP ORDERS RECEIVED AND SALES2013 Orders: 1,920.8 (1,970.1) MEUR, –2.5%* | Net sales: 2,099.6 (2,171.5) MEUR, –3.3%**
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0
500
1000
1500
2000
2500
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
MEUR
*–0.1% at comparable currencies, **–1.0% at comparable currencies
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SERVICE MARKET SHARE AND SIZE IN 2013
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In-house service67%
Competing external suppliers
~75%
Konecranes~25%
Openmarket
33%
Note that market share and size are based on Konecranes’ estimates, as no comprehensive statistics are available.Total market >10 BEUR Open market >3 BEUR
© 2014 Konecranes Plc. All rights reserved.
EQUIPMENT MARKET SHARE AND SIZE IN 2013
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Konecranes13%
Other suppliers87%
INDUSTRIAL CRANES AND COMPONENTS, CONTAINER HANDLING EQUIPMENT
Market size ~10 BEUR
Note that market share and size are based on Konecranes’ estimates, as no comprehensive statistics are available.
© 2014 Konecranes Plc. All rights reserved.
GROUP EBIT & MARGIN2013 EBIT: 115.5 (138.3) MEUR, –16.5% | MARGIN: 5.5% (6.4%), excluding restructuring costs
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0%
2%
4%
6%
8%
10%
12%
14%
0
50
100
150
200
250
300
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
EBIT MARGINMEUR
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2013 RESULT – POSITIVES AND NEGATIVES
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Service profitabilityContinued strength in most North American businesses and several improvements in EuropeFixed cost development thanks to restructuring actionsAll-time high order intake in Port Cranes
× 14% CAGR in 2003-2012 came to a halt in 2013
× Extra costs in heavy-duty industrial crane and shipyard crane projects
× Heavy IT system development continued to burden result
× India
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• Two restructuring programs with a combined cost savings target of EUR 40 million (10 + 30) launched in 2013– Consolidation and transfer of production between sites
– Consolidation of and efficiency improvements in administration and support functions
– Consolidation of sales units to cover larger areas
– Improving productivity and restructuring of underperforming operations
• Personnel impact over 700
• Timing of cost savings– EUR 10 million in 2013
– EUR 15 – 20 million in 2014
– EUR 10 – 15 million in 2015
ACTIONS TO IMPROVE EFFICIENCY AND REDUCE COSTS
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EPS AND DPS
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0.330.43
1.17
2.17
2.83
1.08
1.35
1.11
1.47*
0.85*
0.26 0.280.45
0.800.90 0.90
1.00 1.00 1.05 1.05**
0,00
1,00
2,00
3,00
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
EPS DPS
*Approx. EUR 1.54 in 2012 and EUR 1.20 in 2013 excluding restructuring costs**Board’s proposal to the AGM
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MARKET SITUATION
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• Konecranes has a crane factory in the city of Zaporozhye
• Measures taken to reduce operational risks
• Transfers of production and depreciation of Hryvna expected to affect EBIT by approx. EUR 6 million in 2014
UKRAINE
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GROUP ORDER BOOKQ4 Order book: 893.5 (942.7) MEUR, –5.2%
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0
200
400
600
800
1000
1200 MEUR
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CAPACITY UTILIZATION: EU27 AND USA
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SOURCES: Eurostat (latest data point Q1/14), Federal Reserve Bank of St. Louis (January 2014)
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PMI’S IN THE BRIC COUNTRIES
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SOURCES: HSBC/Markit, (latest data point February 2014)
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CONTAINER THROUGHPUT
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-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%1
/0
8
4/
08
7/
08
10
/0
8
1/
09
4/
09
7/
09
10
/0
9
1/
10
4/
10
7/
10
10
/1
0
1/
11
4/
11
7/
11
10
/1
1
1/
12
4/
12
7/
12
10
/1
2
1/
13
4/
13
7/
13
10
/1
3
1/
14Gro
wth
Y/
Y
Source: RWI/ISL Container Throughput Index
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MARKET SENTIMENT
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STRATEGY IMPLEMENTATION
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KEY STRATEGIC INITIATIVES
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INDUSTRIAL INTERNET
1
We make machines intelligent and aware of their condition, and network them to create real-time visibility for enhanced safety and productivity. This unique service that we offer our customers differentiates us from our competitors and warrants a price premium.
EMERGING MARKETS OFFERING
2
We develop ‘mid-market’ products with high quality but lower price points, and strengthen our position in emerging markets.
OneKONECRANES
3
We streamline our way of working and modernize our information systems to boost productivity and lower our cost level.
© 2014 Konecranes Plc. All rights reserved.
INDUSTRIAL INTERNET
We make machines intelligent and aware of their condition, and network them to create real-time visibility for enhanced safety and productivity. This unique service that we offer our customers differentiates us from our competitors and warrants a price premium.
Safety
421Productivity
15,0%
27 Review by the CEO 28/03/2014
© 2014 Konecranes Plc. All rights reserved.
INDUSTRIAL INTERNET
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Industrial revolution Internet revolution
KONECRANES TRENDS
1750 19401800 1900 2000 202019801960
End of 1980’s Digitalization
• AC drives• PLC
2002 Condition monitoring
• Control Pro
1990sCommercialized internet
2010 Internet technology
• Sensor technology• Smart features • Remote condition monitoring
and predictive maintenance• Remote-based data collection
and analysis, TRUCONNECT®
1885 First automobile
1876 Telephone
1710 Steam engine
Industrial internet
© 2014 Konecranes Plc. All rights reserved.
KEY STRATEGIC INITIATIVES
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INDUSTRIAL INTERNET
1
TRUCONNECT® product family launched in several countries
Thousands of items of equipment with a remote connection
EMERGING MARKETS OFFERING
2
Several product types in design and testing phase
First product launch in near future
OneKONECRANES
3
New CRM and HR systems in global use
Service and Equipment ERP systems and harmonized processes cover ~20% of Group sales
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KONECRANES ARTG• Konecranes is the first company
offering automation for RTG container terminals
• Customers moving to an automated operating model can start with their current yard infrastructure
• The ARTG system offers all benefits of automation: operational cost savings, greater productivity, increased predictability and increased safety
© 2014 Konecranes Plc. All rights reserved.28/03/2014Review by the CEO31
KONECRANES AGILON• Agilon is a patented materials
inventory and management system• It consists of a net portal, a
shelving system, and a robot that travels within the shelving
• It picks the parts listed by the operator and brings them straight to the service point
• Connected real-time with parties in the supply chain
© 2014 Konecranes Plc. All rights reserved.
OUR JOURNEY
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2005–2010- Capitalizing on growth
seeds planted earlier- Wider installed base and
consolidation through key acquisitions
2011–2016- Becoming a truly global
company with harmonized processes and systems
- Increasing addressable market with new product segments
- Building a base for new services using modern technology, “Industrial Internet”
2017–- Lifting customers’ businesses with smart, productivity-enhancing products and services
- World class efficiency and platform for sustained profitable growth
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EMPLOYEE SHARE SAVINGS PROGRAM
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Over
1,700 employees
More than
40countries
15%of employees
globally
1/3of employees
in Finland
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NOT JUST LIFTING THINGS, BUT ENTIREBUSINESSES
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