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Annual Report 2014

THIS IS KONECRANES

KONECRANES IN A SNAPSHOT

Konecranes is a global industry-leading group of Lifting Businesses™. Everything we do is targeted at one goal: improving the safety and productivity of our customers’ operations.

THIS IS KONECRANES

STRATEGY IN BRIEF

Not just lifting things, but entire businesses.

We know in real time how millions of lifting devices and machine tools perform. We use this knowledge around the clock to make our customers’ operations safer and more productive.

Trust in people

We want to be known for our great people

Total service commitment

We want to be known for always keeping our promises

Sustained profitability

We want to be known as a financially sound company

Key strategic initiatives

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.

Segment-based Offering

We meet our customers’ needs across the world through a segment-based offering of products and services.

oneKONECRANES

We streamline our way of working and modernize our information systems to boost productivity and lower our cost level.

Megatrends

People and society

Generation Y behaves differently. They are IT savvy, and may seek a different work/life balance, challenge leaders of companies and countries, and expect ethical behavior, including good governance and workplace safety.

World demographics

Urbanization, new megacities, reverse brain drain with talent returning to emerging countries. The age pyramid favors emerging countries over Western countries. Emerging markets will represent a major part of the world’s growth.

Digitalization

Advances in data analytics, automation, sensors, wireless networking, and nanotechnology are enabling intelligent “self-aware” machines.

Resource scarcity

The need to save energy, find new sources of energy, control emissions, and develop clean energy. Environmental awareness is also growing in emerging markets; waste of any kind is increasingly unacceptable.

THIS IS KONECRANES

BUSINESS AREAS

Business Area Service

Konecranes offers specialized maintenance and modernization services for all types and brands of industrial cranes, lifting equipment, and machine tools through a global service network. Konecranes has 600 locations in almost 50 countries.

Market position

Konecranes is the clear market leader in crane service, with the world’s most extensive crane service network. The group is also one of the largest providers of international machine tool services.

Development in 2014

Our contract base, very much the foundation of the business, continued to grow in 2014, and we’ve been able to show improvements in terms of both gross margin and EBIT margin.

We’ve focused on core products (our value-added offering), and productized our service offering, introducing tools and processes to support training, sales and delivery.

It’s been a year of laying foundations, during which we’ve made much progress in line with the oneKONECRANES strategic initiative.

Despite market uncertainty, demand for services is still largely intact.

Key figures

  Proportion of Group total, % 2014 2013 Change, %
Orders received, MEUR 37 750.8 715.9 4.9
Order book, MEUR 16 142.6 128.1 19.1
Net sales, MEUR 42 895.1 889.1 0.7
Operating profit (EBIT), excluding restructuring costs, MEUR 66 89.1 80.6 10.6
Operating margin (EBIT), excluding restructuring costs, % 10.0% 9.1%
Operating profit (EBIT), MEUR 66 86.9 67.8 28.2
Operating margin (EBIT), % 9.7% 7.6%
Personnel at the end of period 53 6,285 6,151 2.2

Business Area Equipment

Business Area Equipment offers components, cranes, and material handling solutions for a wide range of industries. Products are marketed through a multi-brand portfolio that includes Konecranes and the Group’s power brands: STAHL CraneSystems, SWF Krantechnik, Verlinde, R&M,Morris Crane Systems and SANMA Hoists & Cranes.

Market position

Konecranes is the world’s largest supplier of industrial cranes, and a world leader in explosion-protected crane technology. It is also a global leader in electrical overhead traveling cranes for process industries and shipyard gantry cranes, and a strong global supplier of cranes and lift trucks for container handling and heavy unitized cargo and bulk material unloading.

Development in 2014

This has not been a year of huge positive developments in investment for new equipment in our key markets. Our response to these challenges is widespread development under the banner of three focus areas: stronger customer focus, operational excellence and simplicity.

In 2014, we launched several products with our new Segment-based Offering in mind: the BOXHUNTER, Morris S5 Series wire rope hoists, CXT UNO and UNITON.

We see meeting quality improvement as a clear opportunity for us to improve our profitability. We aim to simplify our operational model to increase profitability through a tighter, more efficient, customer-focused organization.

Konecranes as an equipment supplier has achieved good market coverage through prudent acquisitions.

Key figures

  Proportion of Group total, % 2014 2013 Change, %
Orders received, MEUR 63 1,262.5 1,319.6 -4.3
Order book, MEUR 84 826.9 765.3 8.0
Net sales, MEUR 58 1,221.7 1,329.2 -8.1
Operating profit (EBIT), excluding restructuring costs, MEUR 34 46.7 54.3 -14.1
Operating margin (EBIT), excluding restructuring costs, % 3.8% 4.1%
Operating profit (EBIT), MEUR 34 45.6 37.8 20.8
Operating margin (EBIT), % 3.7% 2.8%
Personnel at the end of period 47 5,639 5,626 0.2