Release Date: February 07, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Konecranes Oyj (KNCRF, Financial) reported its second-highest order intake for a quarter ever, reaching almost EUR 1.2 billion, up 26% from the previous year.
- The company achieved the highest sales in a single quarter ever, exceeding EUR 1.2 billion, with a comparable EBITDA margin of 13.2%, a new all-time high for the fourth quarter.
- Free cash flow was exceptionally strong at EUR 170 million, and the 2024 dividend proposal increased to EUR 1.65 per share, up EUR 0.30 from the previous year.
- The company saw strong order intake in both the ports and industrial equipment segments, with significant growth in the EMEA and Americas regions.
- Konecranes Oyj (KNCRF) achieved a 6.9% growth in comparable currencies for the group, surpassing the nominal world GDP growth target of 4% for 2024.
Negative Points
- Despite strong performance, the order book decreased by EUR 150 million year-on-year, down 5% at the end of the year.
- The APAC region experienced a decrease in order intake, contrasting with growth in other regions.
- The company noted that interest rates have caused delays in decision-making for larger process crane orders.
- Utilization of the installed base was below the previous year, indicating potential challenges in maintaining operational efficiency.
- The CEO, Anders Svensson, announced his decision to leave Konecranes Oyj (KNCRF) in mid-July, which may lead to transitional challenges.
Q & A Highlights
Q: Have you seen any market share increase in the US due to higher tariffs on cranes from China, and how do you see this evolving with the new US administration?
A: Anders Svensson, CEO: We believe we have gained some market share in the US, particularly in services. However, the impact of tariffs on Chinese STS cranes is not immediate due to the long sales and delivery cycles. The tariffs will be implemented in mid-May, and we haven't seen significant changes in market shares yet.
Q: Can you comment on the demand for industrial cranes and any potential pre-buying due to tariffs?
A: Anders Svensson, CEO: We have seen good performance in both components and cranes, with stable demand in the US and Europe. The potential tariffs have not led to noticeable pre-buying activity. The market activity remains stable, with some regional variations.
Q: What are the levers to drive further margin enhancement within the service segment?
A: Anders Svensson, CEO: We are focusing on improving productivity through AI for planning and workforce efficiency. We are also launching new products and service contracts to drive growth. We aim to manage inflation with pricing and leverage volume for margin improvement.
Q: How do you see pricing and cost inflation evolving in 2025 across business segments?
A: Anders Svensson, CEO: We expect labor inflation to be lower than in 2024, with material inflation potentially higher. We aim to compensate for inflation with pricing adjustments across all businesses, with regional differences. Our backlog margins are expected to be stable or better.
Q: Can you provide more color on the margin guidance and assumptions behind it?
A: Anders Svensson, CEO: We target margin improvements across all businesses, with service expected to grow well. We anticipate a EUR10 million improvement from our optimization program in Industrial Equipment in 2025, along with other strategic initiatives to enhance margins.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
