Q3 2008 INTERIM REPORT - KonecranesMarket Review - Q3-1.0 0.0 1.0 2.0 3.0 4.0 5.0 6.0 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 yoy%-1.0 0.0 1.0 2.0 3.0 4.0 5.0 6.0 Global

© 2008 Konecranes Plc. All rights reserved.

Q3 2008 INTERIM REPORT

29th October, 2008Pekka Lundmark, President & CEOTeo Ottola, CFO

Q3 Interim Report 2© 2008 Konecranes Plc. All rights reserved.

Group Highlights in Q3

• Order intake was good at MEUR 515.9.

– Order book up 34 % y-o-y

– Continued strong in Service and Standard Lifting, decreased in Heavy Lifting.

– All regions contributed.

• Sales growth +22.6% (+28.9% in comparable currencies).

• Operating margin 13.3%.

– Service 14.5%, Standard Lifting 18.4%, Heavy Lifting 9.0%

• Return on capital employed 52.3% (L12M)

• Strong balance sheet

– Net debt MEUR 31.1

– Gearing 8.8%

– Goodwill MEUR 59.8


• General uncertainty increasing.

• The crisis in the financial sector caused widespread fears of a severe economic slowdown.

• Effects not yet directly visible in the demand for lifting equipment and services.

• However, some reflections of the deteriorating confidence on the customer behavior.

• After the end of the reporting period raw material prices, especially for steel, have begun to fall.

Market Review - Q3

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ppGlobal GDP (ls)IC contribution (rs)EM contribution (rs) Forecast

Courtesy of DB Global Markets Research


Q3/08 Group Orders & Net salesOrders: 515.9 (506.4) MEUR, +1.9% (5.4% in comparable currencies)Sales: 520.4 (424.4) MEUR, +22.6% (28.9% in comparable currencies)

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MEUR ORDERS SALES


ServiceHeavy Lifting

Standard Lifting

Sales Split by Business Area & Region, % of Rolling 12 Month Sales

57%

14%

29%

(50)

(37)

(13)

AmericasAsia-PacificEMEA

R12M1,975 MEUR

(2007: 1,750)

30%

36%R12M

1,975 MEUR(2007: 1,750)

(33) (38)

(30)

34%


Q3/08 Group EBIT & MarginEBIT: 69.0 (45.5) MEURMargin: 13.3 (10.7)%

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EBIT EBIT MARGIN


12-Month Trailing EPS and Share Price

0,005,00

10,0015,0020,0025,0030,0035,0040,00

3.1.200

33.4

.2003

3.7.200

33.1

0.200

33.1

.2004

3.4.200

43.7

.2004

3.10.2

004

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53.4

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3.7.200

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3.4.200

63.7

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006

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73.4

.2007

3.7.200

73.1

0.200

73.1

.2008

3.4.200

83.7

.2008

3.10.2

008

EURO

0,000,250,500,751,001,251,501,752,002,252,502,753,00

EPS*

*EPS excluding capital gain.


End-Sept Order Book by Business Area GROUP: 1,065 (Q3 2007: 795) MEUR, +34% SER 152 (123) MEUR, STD 418 (268) MEUR, HVY 532 (434) MEUR

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MEUR

Q3/07 Q4/07 Q1/08 Q2/08 Q3/08

SERVICE STANDARD LIFTING HEAVY LIFTING


Order Book Status

• As seen today, order book looks healthy.

• Advance payments received represent approximately one fourth of the order book.

• Some cancellations and requests for extended delivery times.

– As yet, effects have been small.

• Postponements slightly above the usual level.

– May lead to cancellations.

– Current situation evaluated to be relatively safe.

– Should the credit market not stabilize in the near future, this situation could change.


Future Prospects

• 2008 guidance unchanged.

– Full year sales growth target at 15-20% compared with a year earlier.

– Full year operating profit margin targeted to exceed previous year’s level (10%).

• Underlying demand is expected to stay solid.

• Shortage of credit is affecting customer behavior; order intake in Q4 can be lower than in Q3.

• Due to its strong competitive and financial position, Konecranes is well equipped to face the uncertainty in the world economy.


Positioning for Downturn

• High share of service business.

– Slower economic environment accelerate need of cost reduction and productivity, thus boosting service outsourcing.

– Growing trend of larger scale in service outsourcing contracts.

• Diversified set of customer industries, with high share of infrastructure related customers.

• Almost a half of the new equipment business comes from emerging markets.

• Potential to further widen geographical footprint and to increase current strong market position.

• Acquisition opportunities at reasonable prices.

• New products and services to widen current portfolios.

• A more flexible cost structure compared to previous downturns.

• A strong financial position, appreciated by customers.


SERVICE


Good Growth in Service Continued in Q3

• Order intake growth was good in all regions, especially in EMEA and APAC.

• Sales grew fast especially in EMEA.

• Very good operating margin at 14.5%.

• Good growth in contract base.

• Number of units increased to 375,605.

– Includes 39,000 units from restated reporting.

• Annual value increased by 17.3% to EUR 122 million from EUR 104 in Q3/2007.


Q3/08 Service Orders & Net SalesOrders: 170.1 (154.8) MEUR, +9.9%Sales: 187.2 (173.2) MEUR, +8.1%

* Estimated 2006 figures according to reporting method implemented as of 2008. Restated 2007 figures.

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Q3/08 Service EBIT & MarginEBIT: 27.1 (24.7) MEURMargin: 14.5 (14.3)%


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EBIT EBIT MARGIN* *


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2001 2002 2003 2004 2005 2006 2007 Q3/08

UNITS

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MEURNUMBER OF CRANES VALUE

*

* Includes 39,000 units due to restated reporting.

Q3 2008 Service Contract Base376 (287) thousand unitsAnnual value 122 (104) MEUR

Q3 Interim Report 17© 2008 Konecranes Plc. All rights reserved. Presentation title Presentors name, date 17

SECTIONTITLESERVICESERVICE

Investor Presentation 17© 2008 Konecranes Plc. All rights reserved.

STANDARD LIFTING


Favorable Product Mix Supported Standard Lifting Q3 Profitability

• Order intake grew in all regions.

– Highest relative growth in APAC.

• Very good sales growth - 26.5%.

• Excellent operating profit margin at 18.4%.

– Product mix continued to favor components.

• Order book corresponds now to more than five months of sales.


Q3/08 Standard Lifting Orders & Net salesOrders: 223.1 (188.2) MEUR, +18.5%Sales: 206.7 (163.4) MEUR, +26.5%


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Q3/08 Standard Lifting EBIT & MarginEBIT: 38.1 (25.1) MEURMargin: 18.4 (15.4)%


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EBIT EBIT MARGIN* *


HEAVY LIFTING

HEAVY LIFTING


HEAVY LIFTING


Process Cranes Order Intake ContinuedStrong in Heavy Lifting in Q3

• Order intake in lift trucks and process cranes continued strong in all regions.

• Total orders received decreased due to low orders for port and shipyard cranes.

• High sales due to large port and shipyard deliveries.

• Operating margin 9.0%.

• Improvement in process cranes’ margin.

• Favorable product mix.

• Order book corresponds now to about 10 months of sales.


Q3/08 Heavy Lifting Orders & Net salesOrders: 159.1 (191.8) MEUR, -17.1% Sales: 160.5 (115.0) MEUR, +39.6%


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Q3/08 Heavy Lifting EBIT & MarginEBIT: 14.5 (3.8) MEURMargin: 9.0 (3.3)%


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Heavy Lifting R12M Sales & Operating Margin R12M Sales: 623.9 (535.7) MEUR Operating Margin: 8.0 (5.9)%


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LTM SALES LTM EBIT MARGIN* *


FINANCIALS


Net Working Capital

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NWC, MEUR % OF SALES

243.1 (215.8) MEUR12.3 (12.8)% of Sales


46.2*

52.3

29.5

17.213.7

10.8

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55

2003 2004 2005 2006 2007 R12M

ROCE %

*The 2007 ROCE including capital gain was 50.4 %

Return on Capital Employed


49.6

36.5

16.612.5

7.5

47.3*

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2003 2004 2005 2006 2007 R12M

ROE %

*The 2007 ROE including capital gain was 51.2 %

Return on Equity


Cash Flow From Operations Before Financing Items and Taxes

233.2

16.824.2

131.1114.2

126.7

66.5

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30.7

34.5

35.0

22.1

Q2Q2

Q1 Q1

Q3 61.5 Q3 74.0

*

*Including capital gain


Cash Flow Before Financing Activities

19.3

22.1

179.1

-30.46.9

45.8

16.6

88.6

2.3

-35-15

525456585

105125145165185205

2003 2005 2006 2007 1-9/07 1-9/08

MEUR

38.3

10.3

Q2

Q2: -0.4Q1Q1: 4.4

2004

Q3 40.0

41.8Q3

*

*Including capital gain


Gearing

19.3

102,1 %

79,3 % 75,8 %

24,4 %22,4 %

39,3 %

57,3 %

65,0 %

7,0 %8,8 %

26,3 %

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EQUITY NET DEBT GEARING


Stronger US Dollar Improves Profitability- but the effect comes with a delay due to hedging

1,251,271,291,311,331,351,371,391,411,431,451,471,491,511,531,551,571,591,611,63

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USD


Material Costs Leveling off -Steel Prices Declining Drastically

• During the third quarter, material costs were still rising.

• Towards the end of the quarter, raw material prices begun to level off.

– Following previous months of moderate softening in global steel prices, the October drops has been much more severe.

• Material costs in Q4 are estimated to be at the same level as in Q3.

– Due to lead times, the positive effects visible from the Q1/2009 onwards.

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€/TONNE GERMANY SPOT PRICE CHINA SPOT PRICE


APPENDIXES


Statement of Income

Q3 2008 MEUR

Q3 2007*MEUR

Sales 520.4 424.4

Other operating income 0.5 0.6

Depreciation and impairments -6.7 -5.7

Other operating expenses -445.3 -373,8

Operating profit 69.0 45.5

Share of result of associated companies and joint ventures -0.8 0.4

Interests, net -0.8 -2.5

Other financial income and expenses -3.8 -1.8

Income before taxes 63.5 41.5

Taxes -18.1 -12.0

Net income for the period 45.4 29.5

* 2007 operating profit, operating margin, profit before taxes, net profit for the period and earnings per share figures are presented excluding the capital gain on the sale of real estate booked in Q2 2007, while other figures include the capital gain. Including the capital gain, the operating profit and profit before taxes are EUR 17.6 million higher, the net profit for the period is EUR 13.0 million higher, and earnings per share is 0.22 EUR higher than presented.


MEUR Q3 2008 Q3 2007 Q3 2008 Q3 2007

Non-current assets 232.4 222.2 Equity 354.6 287.1

Inventories 359.6 268.3 Non-current liabilities 109.5 151.8

Other current assets 582.9 479.5 Provisions 41.8 30.5

Current liabilities 673.9 500.7

Total assets 1,179.8 970.1Total s’holders equity

and liabilities 1,179.8 970.1

Balance Sheet


MEUR Q3 2008 Q3 2007

Operating income 69.0 45.5

Depreciation and impairments 6.7 5.7

Profits and losses on sale of fixed assets 0.3 0.0

Other non-cash items 0.1 -0.2

Operating income before change in net working capital 76.0 51.0

Change in net working capital -2.0 10.5

Cash flow from operations before financing items and taxes 74.0 61.5

Financing items and taxes -22.5 -9.5

Net cash flow from operating activities 51.4 52.1

Net cash used in investing activities -9.7 -12.1

Cash flow before financing activities 41.8 40.0

Translation difference in cash 1.0 -0.7

Repurchase of own shares 0.0 0.0

Dividends paid -0.1 0.0

Change in interest-bearing debt -45.3 -28.7

Proceeds from share subscriptions 0.4 -0.1

Change of cash and cash equivalents -2.2 10.2

Cash Flow Statement


MEURQ3 2008

MEURQ3 2007 % Change

Sales 520.4 424.4 +22.6

Operating Income (EBIT) 69.0 45.5 +51.5

Income before taxes 63.5 41.5 +52.9

Net Income 45.4 29.5 +53.9

Cash flow from operations before financing and taxes 74.0 61.5 +20.2

Cash flow per share before financing and tax 1.26 1.03 +22.3

Net interest bearing debt 31.1 64.2 -51.5

Net gearing (%) 8.8 22.4

Solidity (%) 38.0 35.4

Return on capital employed, LTM (%) 52.3 42.0

Return on equity, LTM (%) 49.6 47.5

Equity per share (EUR) 6.00 4.78 +25.5

Investments 18.8 18.1 -3.9

Personnel at end of period 9,602 8,284 +15.9

Personnel on average 9,051 7,905 +14.5

Key Figures


Contact Information

• Pekka Lundmark, President and CEOtel. +358 (0)20 427 2000 [email protected]

• Teo Ottola, Chief Financial Officertel.+358 (0)20 427 2040 [email protected]

• Sanna Päiväniemi, Investor Relations Managertel.+358 (0)20 427 [email protected]

• Mikael Wegmüller, Director, Marketing and Communicationstel: +358 (0)20 427 [email protected]

www.konecranes.com

mailto:[email protected]




NOT JUST LIFTINGTHINGS, BUT ENTIREBUSINESSES


Documents

Q3 2008 INTERIM REPORT - KonecranesMarket Review - Q3-1.0 0.0 1.0 2.0 3.0 4.0 5.0 6.0 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 yoy%-1.0 0.0 1.0 2.0 3.0 4.0 5.0 6.0 Global