HANDELSBANKEN CAPITAL MARKETS SMALL/MID CAP SEMINAR€¦ · there is a large number of small crane...

© 2011 Konecranes. All rights reserved.

HANDELSBANKENCAPITAL MARKETS SMALL/MID CAP SEMINAR

June 20, 2011Teo Ottola, CFO


CONTENTS

• Konecranes in a nutshell• Strategy going forward• Looking ahead• Growth aspects

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© 2011 Konecranes Plc. All rights reserved.

KONECRANESIN A NUTSHELL

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MISSION

Mission• We are not just lifting things,

but entire businesses

We deliver the highest lifecycle value by focusing on:

• Maximizing the productivity of uptime

• Minimizing the cost of downtime

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SALES SPLIT BY BUSINESS AREA & REGION (R12M)

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58% 42%

16%

31% 53%R12M

1,628 MEUR(FY 2010 1,546)

R12M1,628 MEUR

(FY 2010 1,546)

(53)(30)

(17)

(57) (43)


WE HAVE UNIQUE SERVICE BUSINESS

A UNIQUE BUSINESS IN THEINDUSTRY WITH ITS OWN RIGHT TO GROW

2/3 OF THE INSTALLED EQUIPMENT SERVICED IN-HOUSEProductivity of the service technicians lowReactive maintenance

> Too high downtime> Challenges to maintain skills to service modern equipment

3,500 serviceTechniciansservicingcranes andmachine toolsof all makes

Own,dedicatedmanagement

75% of equipment in maintenance contract base non-Konecranesequipment

Preventive maintenanceperformed by well-trained professionals

Level-based service concept up to fully outsourced material handling

WIN-WIN SITUATION FOR CUSTOMER AND KONECRANESImproved productivity and uptime

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EQUIPMENT MARKETS

Market size ~8 BEUR

PORT CRANES

LIFT TRUCKS

INDUSTRIALCRANES & COMPONENTS

NUCLEARCRANES

Position

# 3…5

# 3…4

# 1

Marketjustrestarting

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Other suppliers87 %

Konecranes13 %


STRATEGY GOING FORWARD

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DIFFERENTIATION THROUGH SERVICE AND TECHNOLOGY INNOVATION

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SERVICE

• Preventive approach• Five service levels• Services for lifting

equipment of every make• 3,500 well-trained

technicians in 578 locations servicing contract base of 381,000 items of equipment

TECHNOLOGY

• Increased R&D investment through the recession

• Focus on digital controls, software, automation and service enabling technologies

• High attention to safety, quality and environment

• Smart Solutions to improve customers’ productivity

MAXIMIZING THE PRODUCTIVITY OF UPTIMEMINIMIZING THE COST OF DOWNTIME


GLOBAL FOOTPRINT

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● Main production sites● Sales and service locations

Footprintexpansion

Footprintexpansion

Footprintexpansion

Footprintexpansion


LEADING POSITION BOTH IN CHINA AND INDIA

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• Access mid market segment in China• Further strengthening of manufacturing

and sourcing in China

• Cross-distribution of certain products• Enhances presence in Far East and

North America

• Development of offering in India• Adds in India to supply and sourcing

network


CHANNEL STRATEGY

• Our market is fragmented and there is a large number of small crane builders out there who1) do not have their own

component technology2) who buy hoists or crane kits

from the market

>We have a dual channel strategy to maximize market coverage

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End users

Crane builder, Dealer

Konecranes Group

“Alpha” (distribution

brands)

“Beta” (Konecranes

brand)


LOOKING AHEAD

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© 2011 Konecranes Plc. All rights reserved.

OUR NEW VISION STATEMENT

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”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.”


HOW DOES IT WORK IN PRACTICE?

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Crane usage data is collected by the Control Pro condition monitoring unit.

Information is transmitted back to Konecranes via 2G modem.

Report is delivered to you & Konecranes via Customer Portal.

Information is compiled to a report, which focuses on:

•Safety•Usage Information•Service Life

Installed on crane

TRUVIEW Connection TRUVIEW Service / TRUCARE

Konecranes service branch goes through reports and provides you with maintenance recommendations.


HOW DOES REMOTE MONITORING SUPPORT CUSTOMER’S BUSINESS?

1) Increase the safety and reliability of cranes– Detect unsafe and abusive operating practices prior to an

incident occurring– Predict when a safety critical component is nearing the

end of its lifetime

2) Optimize service activities to obtain a better ROI on maintenance expenditures

3) Make informed decisions relating to modernization and overhaul of the crane

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Analyze the Past; Prepare for the Future


GROWTH ASPECTS

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COMBINATION OF ORGANIC AND ACQUISITIVE GROWTH

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1. Our main strategy is to grow organically2. In M&A, our first priority are bolt-on acquisitions3. We also keep an open mind towards larger M&A


BALANCED GROWTH BETWEEN THE BUSINESS AREAS ON THEIR OWN MERITS

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0 %

10 %

20 %

30 %

40 %

50 %

60 %

70 %

80 %

90 %

100 %

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Service Equipment

Outsourcing of service

Bolt-on M&A

Machine ToolMaintenance

New serviceproducts

Synergies betweenbusiness areas

Footprint expansionin emerging markets

Market share gains

Multiple distributionchannels Broadened offering


GLOBAL STRUCTURAL CHANGE IS CONTINUING – SHARE OF WORLD INDUSTRIAL PRODUCTION

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North America

Europe

Asia

Source: Maddison (Historical Statistics), IMF, ETLA


LONG-TERM OBJECTIVES

Profitability• 10 % operating margin over the

cycleGrowth• Vision to reach a global market

share of 30 %Capital structure• No quantitative target for the

capital structure, but the optimal long-term gearing (net debt/equity) is considered to be in the range of 50-80 %

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NOT JUST LIFTINGTHINGS, BUT ENTIRE BUSINESSES

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HANDELSBANKEN CAPITAL MARKETS SMALL/MID CAP SEMINAR€¦ · there is a large number of small crane...

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