Konecranes Annual Report 2014 - Crane Research Development ... Konecranes is the clear market...

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  • Konecranes Annual Report 2014

  • CONTENTS2 Konecranes in a snapshot

    4 2014 highlights

    6 Theme: Connected. Future. Everywhere.

    8 CEO's letter

    10 Chairman's letter

    12 Company cornerstones

    14 Business environment

    16 Business Area Service

    18 Business Area Equipment

    20 Regional overview

    22 Research & Development

    25 Product overview

    28 Corporate responsibility

    36 GRI content index

    CORPORATE GOVERNANCE38 Corporate Governance

    46 Risk management, internal control, and internal auditing

    54 Board of Directors

    56 Group Executive Board

    58 Senior Management Team

    FINANCIAL STATEMENTS 201461 Report of the Board of Directors

    69 Consolidated statement of income IFRS

    70 Consolidated balance sheet IFRS

    72 Consolidated statement of changes in equity IFRS

    73 Consolidated cash flow statement IFRS

    74 Notes to the consolidated financial statements

    109 Konecranes Group 20102014

    110 Calculation of key figures

    111 Company list

    114 Parent company statement of income FAS

    115 Parent company cash flow FAS

    116 Parent company balance sheet FAS

    118 Notes to the parent companys financial statements

    122 Board of Directors proposal to the Annual General Meeting

    123 Auditors report

    124 Shares and shareholders

    128 Investor information

    129 Contact details

    This publication is for general informational purposes only. Konecranes reserves the right at any time, without notice, to alter or discontinue the products and/or specifications referenced herein. This publication creates no warranty on the part of Konecranes, express or implied, including but not limited to any implied warranty or merchantability or fitness for a particular purpose.

    2015 Konecranes. All rights reserved. Konecranes, Lifting Businesses,

    , SMARTON, TRUCONNECT, Agilon, BOXHUNTER, CXT, UNO and UNITON are either registered trademarks or trademarks of Konecranes Plc.

    Enabling completely new service concepts for enhancing safety and productivity

    The Industrial Internet takes connectivity to new heights

    Unique products and services that differentiate us from our competitors

    After streamlining our ways of working and modernizing our information systems, we are now more connected as an organization

    Next phase of digitalization

    New competences needed across the board

    Extensive global presence

    Different customer needs in every market area

    Segment-based Offering

  • 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.

    Business Areas

    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.

    ProductsKonecranes extensive service offering covers inspections, preventive maintenance programs, repairs and improvements, on-call service, spare parts, modernizations, and an array of consultation services. TRUCONNECT Remote Services lie at the core of Konecranes offering and provide a range of infor-mation-based services, including periodic data reporting, real-time diagnostics, and remote tech-nical support and production monitoring.

    Market positionKonecranes is the clear market leader in crane service, with the worlds most extensive crane service network. The group is also one of the largest providers of international machine tool services.

    Service contract baseApproximately 450,000 units are covered by Konecranes maintenance contracts. The majority of this equipment has been manufactured by compa-nies other than Konecranes. Expert maintenance is provided for any brand of equipment from any manu-facturer. EquipmentBusiness Area Equipment offers components, cranes, and material handling solutions for a wide range of customers, including process industries, the nuclear sector, industries handling heavy loads,

    container handling, intermodal terminals, shipyards, and bulk material terminals. Products are marketed through a multi-brand portfolio that includes Konecranes and the groups power brands: STAHL CraneSystems, SWF Krantechnik, Verlinde, R&M, Morris Crane Systems, and SANMA Hoists & Cranes.

    ProductsOur product range comprises industrial cranes, including industrial crane products, industrial crane solutions, and workstation lifting systems; compo-nents, including wire rope hoists, crane kits, electric chain hoists, manual hoists and accessories; nuclear cranes; container handling cranes; cranes for inter-modal terminals and bulk material unloaders; lift trucks; and shipyard cranes. Konecranes Agilon is a patented materials management solution for managing, storing, picking, and replenishing compo-nents that offers improved efficiency in material handling. The product offering features a number of advanced technologies, such as automation and smart features, including sway control, load posi-tioning, and shock load prevention.

    Market positionKonecranes is the worlds largest supplier of indus-trial 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.

    Annual productionWe produce thousands of industrial cranes annually, tens of thousands of wire rope hoists and trolleys and electric chain hoists, as well as hundreds of heavy-duty cranes and heavy-duty lift trucks.

    Equipment 1,221.7 MEUR Service 895.1 MEUR

    Sales by Business Area, 2014

    58%

    42%

    Equipment 46.7 MEUR Service 89.1 MEUR* Excluding restructuring costs

    EBIT by Business Area, 2014*

    66%

    34%

    Equipment 5,639 Service 6,285

    Personnel by Business Area, 2014

    53%

    47%

    Market leader in industrial cranes and components, as well as crane service

    EUR 2,011 millionof net sales in 2014

    Sales and service locations in

    48 countries

    One of the largest suppliers of port cranes and lift trucks

    12,000 employees in 2014

    Head office in

    Finland

    Industry-leading technology and global modular product platforms

    13 countries with production facilities

    Listed on

    Nasdaq Helsinki

    2 Konecranes Annual Report 2014 Konecranes Annual Report 2014 3KONECRANES IN A SNAPSHOT KONECRANES IN A SNAPSHOT

  • 2014 HIGHLIGHTS USING CHALLENGING TIMES TO MAKE COMPANY-WIDE IMPROVEMENTS

    Profitability improved despite lower net sales Demand for maintenance services improved

    during 2014, the key driver being the sustained strength in the US manufacturing industry. Market environment remained difficult in the new equip-ment business, particularly within process indus-tries and, geographically, in most of the emerging markets. Order intake decreased by 0.9 percent in 2014.

    Konecranes order book as of the end of the year stood 9.6 percent higher than in 2013.

    Net sales decreased by 4.2 percent compared to 2013 due to Business Area Equipment.

    Operating margin before restructuring costs was 5.9 percent of sales. Profitability improved from the previous year thanks to Business Area Service.

    Solid performance in Service, Equipment hit by lower sales Net sales in Business Area Service grew by

    0.7 percent in 2014. Net sales grew in the Americas as well as India, Middle East and Africa, declining in Europe and Asia-Pacific. Contract base growth continued and was up 10.0 percent year-on-year at the end of 2014. Operating margin before restructuring costs was 10.0 percent of sales. Prof-itability improved due to higher gross margin and the restructuring actions executed in 2013.

    Net sales in Business Area Equipment were 8.1 percent lower than in 2013. The decline in net sales was mainly attributable to port cranes and heavy-duty industrial cranes. On the other hand, strong growth continued in the lift truck business. Operating margin before restructuring costs was 3.8 percent of sales. Profitability was burdened by lower sales and costs related to the operations in Ukraine.

    Intense work continued within the strategic focus areas The three strategic initiatives Industrial Internet,

    Segment-based Offering and oneKONECRANES were at the core of Konecranes development work in 2014.

    Service developed its delivery concepts by intro-ducing new tools and processes and further productized our service offering.

    The BOXHUNTER RTG crane, launched in April, was the first product to be launched under the Segment-based Offering initiative. It incorporates innovative and smart features in terms of control and mechanical solutions and is maintenance friendly.

    Konecranes unveiled the generation C series of lift trucks at the CeMAT fair in May.

    In June, Konecranes completed the acquisition of the remaining shares of Jiangsu Three Horses Crane Manufacture Co. Ltd. (SANMA) and now owns 100 percent of the company.

    The CXT UNO overhead crane was launched in September. Designed to serve basic lifting needs, the crane is targeted at small and medium-sized companies as well as larger enterprises that require lifting equipment for more rudimentary applications.

    Also in September, we introduced an entirely new family of wire rope hoists under Konecranes Morris Crane Systems brand. The Morris S5 Series matches standard needs, especially in the compo