ANNUAL REVIEW 2019 - Investors
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
ANNUAL REVIEW 2019
YEAR 2019 STRATEGY BUSINESS AREAS R&D SUSTAINABILITY KONECRANES AS AN INVESTMENT
A QUARTER-CENTURY Contents
OF AMBITION AND Konecranes in brief 3
GROWTH Year 2019 in numbers 4
Highlights of 2019 6
2019 marked the 25th year of Konecranes’ operations as an independent CEO’s review 7
company. From our modest beginnings in the town of Hyvinkää in the early
1990s, Konecranes has grown to become a leading lifting equipment solution Megatrends 9
provider on a global scale.
Strategy 11
The global material handling market continues to evolve rapidly, driven by
increasing digitalization, the introduction of productivity-enhancing technologies Business area reviews 12
and the need for more sustainable operations, and Konecranes is well-placed to
benefit from these trends. Through intelligent design and the implementation
Research and technology development 19
of digital solutions that make our products smarter, we ensure our customers’
Sustainability 24
operations are safer and more efficient.
Konecranes as an investment 27
The integration of MHPS, where we made good progress in 2019, means we
are now stronger and better-equipped to anticipate and meet future challenges
while also able to seize new business opportunities. We will do this with strong
contributions from all of our three Business Areas – Port Solutions, Industrial
Equipment and Service – with the latter to be our growth engine in the years to
come.
Add to this a new President and CEO at the helm in 2020, and it’s clear that Information about Konecranes’ Annual Report 2019
Konecranes is now ready to take the next steps in its strategy, leveraging our Konecranes’ Annual Report 2019 consists of four separate reports: Annual Review, Financial
many strengths to play an even greater role in the material handling ecosystem Review, Sustainability Report and Governance document. All documents are downloadable
of our customers. on our Annual Report website at https://investors.konecranes.com/ar2019.
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.
Annual Review 2019 2
YEAR 2019 STRATEGY BUSINESS AREAS R&D SUSTAINABILITY KONECRANES AS AN INVESTMENT
INDUSTRIAL PORT
SERVICE
EQUIPMENT SOLUTIONS
KONECRANES
IN BRIEF
Konecranes is a world-leading group of Lifting handling needs through one supplier. In addition to petroleum and gas, paper and forest, container
Businesses™, serving a broad range of customers. We offering a wide range of lifting solutions, we provide handling, shipyards, power and metals production.
are truly a global company: in 2019, we had 16,200 specialized maintenance services and spare parts for all We are a part of our customers’ processes, as they
employees in 50 countries. As a leading manufacturer types and makes of industrial cranes, hoists and port do not only invest in equipment and services but look
of lifting equipment, Konecranes offers a vast range equipment – from single units of equipment to entire for solutions they can rely on. We constantly strive to
of advanced lifting solutions and services to different operations. improve our performance in product design, service
industries worldwide. The solutions provided by our solutions, safety and sustainability to stay ahead of our
three Business Areas – Service, Industrial Equipment Our customers operate in fields including the customers’ needs.
and Port Solutions – complement each other and automotive sector, waste to energy and biomass,
enable our customers to meet their lifting and material general manufacturing, mining, nuclear energy,
Annual Review 2019 3
YEAR 2019 STRATEGY BUSINESS AREAS R&D SUSTAINABILITY KONECRANES AS AN INVESTMENT
YEAR 2019 IN NUMBERS
3,167.3 3,326.9 8.3%
MEUR (+2.5%) MEUR (+5.4%) Adjusted EBITA
Order intake Net sales
1,824.3 2,300 52.6%
MEUR (+6.3%) Number of active and Gearing
Order book pending patents
Annual Review 2019 4
YEAR 2019 STRATEGY BUSINESS AREAS R&D SUSTAINABILITY KONECRANES AS AN INVESTMENT
Orders by customer segments, 2019 Being close to our customers through a local presence
Personnel by region, 2019
10% 4% 5%
Construction and Power Transportation
engineering Equipment
7%
9% Metals Production
Distributors
6%
Paper and Forest
25%
General
Manufacturing
30%
Container handling
1%
4%
Chemicals
Mining
Net sales per region, 2019 Personnel by region, 2019
Sales per region, 2019 Personnel by region, 2019
14% 17%
APAC 467.0 MEUR APAC 2,751
34% 20%
AME 1,145.8 MEUR AME 3,319
52% 63%
EMEA 10,126
EMEA 1,714.1 MEUR
Annual Review 2019 5
YEAR 2019 STRATEGY BUSINESS AREAS R&D SUSTAINABILITY KONECRANES AS AN INVESTMENT
HIGHLIGHTS OF 2019
Konecranes starts its 25th year as an
independent company, having grown from
a Nordics-focused company of under 3,000
employees to a global leader in lifting Konecranes boosts its Service business
equipment and services with a presence in in Italy by acquiring Italian Trevolution
50 countries and some 18,000 employees. Service SRL.
Konecranes announces a milestone Konecranes announces the next step in
contract win with the Hadarom container its development by naming Rob Smith as
terminal in Israel. The order consists of its new CEO effective February 1, 2020.
a complete line of automated container
cranes and software intelligence, including Konecranes launches three new lifting
Konecranes’ own terminal operating system products – the S-, M- and C-series cranes
and Equipment Control System. and electric chain hoists.
Konecranes finalizes diversity goals Konecranes signs an agreement to fully
to ensure it has the most competitive acquire MHE-Demag, a leading supplier of
talent pool for the future. By end-2021 industrial cranes and services in Southeast
the company targets that in business Asia, from joint venture partner Jebsen &
management positions no one gender Jessen.
comprises more than 75% of the total, and
no one nationality group can exceed 50%. Konecranes finalizes its climate change
risk assessment to understand how
The 2,000th Konecranes Gottwald different climate scenarios will impact
Mobile Harbor Crane is delivered to the business and operations. The analysis will
Ership terminal in the Mediterranean port be integrated into Konecranes’ operations
of Cartagena in South-eastern Spain. and continuous sustainability work.
Konecranes invented the Mobile Harbor
Crane 64 years ago.
Annual Review 2019 6
YEAR 2019 STRATEGY BUSINESS AREAS R&D SUSTAINABILITY KONECRANES AS AN INVESTMENT
CEO’S REVIEW
Dear shareholders, Belgium’s Luminus to modernize two cranes at a site in our history – highlights included an order from
in Liège. Yilport Holding for 18 Automated Rubber Tired
Konecranes marked its 25th year of operations with Gantry Cranes for three European container
solid financial results and a large acquisition in the
In Industrial Equipment, it was a year of mixed terminals, an important step forward for our Path
Asia Pacific region, underscoring its readiness to
performance. The launch of the S-, M- and C-series to Port Automation approach. We celebrated some
embark on its next phase of growth following the
successful acquisition and integration of MHPS. cranes and electric chain hoists in September was milestones, too, delivering our 2,000th Konecranes
a clear highlight, refreshing and reinforcing our Gottwald Mobile Harbor Crane to the Ership terminal
We had many reasons to celebrate in 2019: a industry-leading portfolio and giving a strong push in Spain and marking 25 years of Konecranes Lift
healthy order book at year-end; strong profitability to our platform consolidation program. The launch Trucks, with nearly 10,000 lift trucks sold across 120
in Service; three new product launches from also showed the innovation that is at the heart of countries to date.
Industrial Equipment; and a stellar showing by Konecranes: The S-series crane uses synthetic rope
Port Solutions including a landmark deal in Israel to deliver greater lifting performance and longer- These achievements show the robust condition of
that highlighted our strengths across software, lasting use, and we have a total of 20 patents either two of our core business cornerstones: a superior
hardware and services. When you add to this other awarded or pending for the three new products. product offering and unmatched service network.
achievements including the establishment of a data
Deliveries of the new cranes have now started, and The third cornerstone is our digital capabilities, and
science laboratory in France, it’s remarkable to see
initial customer feedback has been very positive. 2019 highlights included the French data science
how much we have grown since our founding in
Hyvinkää, Finland in 1994. lab and the renewal of our digital strategy to better
From a financial performance perspective, however, target customers and new business opportunities.
Here are some further examples of this progress. Industrial Equipment struggled. This was due to We strongly believe that the rapid digitalization of
factors including the streamlining of manufacturing our business keeps us ahead of our competitors
Business Area and integration milestones operations in France and Germany; non-recurring and thus in excellent shape to grab the business
In Service, full-year sales and profits improved, costs relating to certain process crane projects; opportunities of the industrial internet era.
as did the annual value of our agreement base and the effects of the slowing global economy.
and orders, reinforcing the business’ importance to Earnings fell sharply from a year ago, but we are We’re especially proud that all of this happened
Konecranes as a whole. In August we strengthened convinced that the recovery actions now underway while we continued to deliver MHPS acquisition
our presence in Italy through the acquisition of in Industrial Equipment, when combined with the synergies. In July 2019 we announced that the
Trevolution Service SRL, one of the country’s largest boost we expect from the new products, will improve EUR 140 million synergy savings program had
independent crane service companies specializing profitability and eventually return the business to ended. This was a great achievement, and we have
in crane maintenance, repairs, modernizations, clear growth. continued with this work to ensure that our cost
spare parts, and hoists and components. We also structure remains well balanced with our current
announced contract wins during the year including In Port Solutions, both sales and profits rose business, especially in Industrial Equipment.
a maintenance and consulting services agreement in 2019. In addition to the Israeli Hadarom deal
with GE Power in France and an agreement with mentioned earlier – the fourth-biggest contract None of this could have happened without the
Annual Review 2019 7
YEAR 2019 STRATEGY BUSINESS AREAS R&D SUSTAINABILITY KONECRANES AS AN INVESTMENT
dedication, focus and drive of our people, and warm also agreed targets to ensure Konecranes has a
thanks go to all Konecranes employees. This positive more diverse employee base – and thus one that is
reputation has been noticed outside the company, even more competitive. By end-2021 our goal is that
with Konecranes ranking well, for example, in an in business management positions no one gender
external Finnish employer survey from Academic can comprise more than 75% of the total, and no
work in 2019. one nationality group can exceed 50%.
Strategic steps for 2020 and beyond These are all critical ingredients for our new
While we rightly celebrate successes like these, corporate strategy, which we will be sharing at
agile companies are always thinking multiple steps our Capital Markets Day in June 2020. We aim
ahead and acting decisively. During 2019 that’s what to leverage the leadership we have in our core
Konecranes did. businesses and digitalization to tap growing
customer demand for more comprehensive solutions
In October, we announced that Rob Smith would and not just individual products and services.
be Konecranes’ next President and CEO effective
February 1, 2020. He joins Konecranes from AGCO, To close, we extend our deepest thanks to our
where he led the Europe and Middle East business shareholders, personnel and customers for their
with annual sales of roughly $5.4 billion. He is a support in delivering the successes of the past 25
leader who has delivered sales and profitability years. Thanks to you we start our next quarter-
growth via innovative business strategies, deep century with solid financial foundations, a growing
expertise in digitalization and strong customer focus. international footprint and an inspired and innovative
group of employees. Konecranes has the size and
In December, we agreed to buy the other half of the drive to succeed – and we will.
our 50-50 MHE Demag joint venture from Jebsen
& Jessen. The final closing price was EUR 143 Warm regards,
million in cash. This move significantly improves
our market position in fast-growing Southeast Asian
markets, creates further opportunities for Service
and simplifies the distribution channel for industrial
cranes. The deal closed in January 2020 and
integration activities are underway.
And, during 2019, we took concrete steps
reflecting the growing and strategic importance of
sustainability in the years to come. We finalized a Teo Ottola Rob Smith
4-month climate change risk assessment study to
understand how different scenarios will impact our
business and operations, and will incorporate those
results into our continuous sustainability work. We
Annual Review 2019 8
YEAR 2019 STRATEGY BUSINESS AREAS R&D SUSTAINABILITY KONECRANES AS AN INVESTMENT
MEGATRENDS
Today, the world is changing at an ever-increasing pace and companies are working hard to tackle the business
opportunities that are unfolding alongside the change. At Konecranes, we have identified four megatrends that have
a significant impact on our customers and us: digitalization, productivity, sustainability and geopolitics. They provide
great opportunities for us to develop our business now and in the future.
Digitalization – the fourth new technologies. Autonomous equipment such as Leveraging digitalization, big data and the internet of
industrial revolution automated guided vehicles, robots and cobots improve things (IoT) provides huge possibilities to automate
productivity and safety. equipment, processes and total operations in the very
near future.
Port and terminal operations are also impacted.
Digitalization is accelerating at an exponential rate and Planning software and applications model, simulate For Konecranes, digitalization will enable more
companies across multiple sectors are thinking how and optimize the throughput and operations and better-quality data to be collected from our
to best exploit the opportunities it brings. Industrial of whole terminals. We are even seeing fully customers’ operations. We can use this to, for
companies are getting ready for the fourth industrial automated terminals in operation. But there is more. example, provide better maintenance services where
revolution, Industry 4.0, which is profoundly changing Approximately 90% of the goods in global trade are we predict equipment failures before they occur, and
production. Robots, augmented reality and production carried by the ocean shipping industry each year. Port optimize service activities according to our customers’
simulations offer ways for smarter automation and authorities, Customs, terminal operators, different production cycles. Digitalization will also bring new
operational excellence. Big data and analytics enable logistics players and shipping lines all work their ways for our customers to manage and monitor
more customer-centric design and production, and the hardest to make the port function as efficiently as equipment as well as train employees how to use them
production process is continuously improved by these possible, still mainly through paper-based processes. safely and efficiently.
Annual Review 2019 9
YEAR 2019 STRATEGY BUSINESS AREAS R&D SUSTAINABILITY KONECRANES AS AN INVESTMENT
Productivity Sustainability Geopolitics
– high on the agenda – a prerequisite for – threats and opportunities
business success
Productivity improvement continues to be high on Sustainability is a growing value for customers and In recent years, the world has become increasingly
the agenda for all companies, and especially so in society. The safety of our products and services unpredictable. Changes in geopolitics, and especially
capital-intensive industrial production. Research has been in focus for us for many years now. We the increasing protectionism in many markets,
shows that companies with excellent productivity continuously improve the safety features of our are reflected in the operating environment and
growth also create more value for their shareholders. offering and a have a strongly rooted safety culture conditions of businesses across the world.
This is true for us and for our customers. Optimizing in the company.
the manufacturing process with maximimum uptime Asia has become the global manufacturing hub and
and minimum downtime is critical. Stakeholders demand that companies do more will likely continue to be so in the future. China is
in areas such as combatting climate change and the largest market in the region and has a growing
Today, we already offer our customers many advancing circularity. We reduce our own carbon and significant global impact. China has several
solutions which improve productivity and profitability footprint by improving the energy efficiency of high-level development programs to strengthen its
through smart, connected equipment and optimized our factories and services. The carbon handprint, competitiveness and power in the global arena, such
maintenance. Examples include our lift trucks for the good we can do, is about how we reduce the as Made in China 2025 and the One Belt, One Road
both ports and industrial clients, our offering in emissions from the operations of customers with the initiative. These will, however, bring opportunities for
automatic warehouse management, our automated help of our eco-efficient products and services. other global and local players as well.
guided vehicles for maneuvering large containers in Our goal is not only to comply with the laws, rules
ports, and our monorail systems employing overhead and regulations that apply to our business; but Due to trade barriers, there has been some shift
rails to transport materials within factories, e.g. in also strive to abide by the high standards of ethical of manufacturing closer to more mature markets.
the automobile industry. As we proceed, we will business conduct. Companies that have aligned their There will be good business opportunities for
place increased strategic focus on the crane as part business growth strategies to their ethics will be a the manufacturing industry in Europe and North
of the entire material handling ecosystem. step ahead in future-proofing their business. America, too, as long as it is leveraging automation
that is necessary for cost-effective manufacturing.
Annual Review 2019 10YEAR 2019 STRATEGY BUSINESS AREAS R&D SUSTAINABILITY KONECRANES AS AN INVESTMENT
STRATEGY
For the past three years, we have worked very hard excellent basis for embarking on the next chapter customer satisfaction, employee engagement
to integrate the Terex MHPS acquisition. As we begin for Konecranes and fulfilling our ambition for and an innovative offering. An industry-leading
2020, we have made signifigant progress with the profitable growth. company excelling in profitable growth has the
integration and we are starting to look at the next means to invest in innovative products and
steps for Konecranes. Strategic cornerstones services, attracts and attains the best talent
Our strategy is based on five cornerstones: and consistently delivers a world-class customer
We plan to fully leverage the four global megatrends growth, profitability, customers, people and experience.
and our core competencies. We have a strong technology. In the long term, we aim for profitable
customer base across industries around the world, growth the exceeds market growth. We also want
a highly competent team, leading technologies to have the best profitability among our peers.
and a world-class service approach. This is an Profitable growth is strongly correlated with
Vision
Mission We know in real time how millions of lifting devices perform.
We are not just lifting things, but entire businesses. We use this knowledge around the clock to make our customers’
operations safer and more productive.
Exceeding Best among Satisfied Engaged Innovative What success looks like and
market growth peers customers employees offering how we measure it
Growth Profitability Customers People Technology Strategic cornerstones
STRATEGY EXECUTION THROUGH GROUP AND BA PROGRAMS
SERVICE EQUIPMENT
Lifecycle Care in Real Time Core of Lifting
Service for all types and makes of cranes and hoists Direct and Indirect channels in Industrial Equipment
Global service network Multi-brand strategy
Improve the safety and productivity of our customers’ operations Need based customer offering
Solution selling Solution selling
Annual Review 2019 11YEAR 2019 STRATEGY BUSINESS AREAS R&D SUSTAINABILITY KONECRANES AS AN INVESTMENT
BUSINESS
AREA REVIEWS
Service
Business Area Service provides specialized maintenance service and spare
parts for all types and makes of industrial cranes and hoists, from a single
piece of equipment to entire operations. Our objective is to improve
the safety and productivity of our customers’ operations. Lifecycle
Care in Real Time is our comprehensive and systematic approach to
maintenance, connecting data, machines and people.
Industrial Equipment
Business Area Industrial Equipment offers hoists, cranes and material
handling solutions for a wide range of customers from General
Manufacturing to various kinds of process industries like Waste-to-
Energy, Paper and Forest, Automotive and Metals Production. Products
are marketed through a multi-brand portfolio.
Port Solutions
Business Area Port Solutions offers a full range of container handling
equipment and automation technology: equipment for handling bulk,
general and project cargo, shipyard handling equipment and heavy-duty
lift trucks, all backed by a complete range of services and software.
Annual Review 2019 12YEAR 2019 STRATEGY BUSINESS AREAS R&D SUSTAINABILITY KONECRANES AS AN INVESTMENT
SERVICE
Growth of service agreements providing opportunities for growth and helping to Operational and commercial excellence
For 2019, Business Area Service set out to maintain secure the Demag legacy. Profitability in 2019 also improved due to synergy
our track record of profitable growth, with a focus realization, sales mix and continuous impro-
on service agreements. These agreements form the Digitalization vement in sales and delivery processes and
basis of our customer relationships and underpin our Industrial companies all over the globe are talking execution.
entire service offering. More specifically, our aim was about digitalization and the Internet of Things (IoT).
to improve general agreement profitability and to Konecranes Service is not just talking about it, we The maturity of our transformation can be
expand the scope of existing agreements.The annual are transforming the delivery of maintenance observed in the sales efficiency and volume
value of the agreement base in 2019 grew 8.2% services in every aspect of our day-to-day opera- growth realized from those product and service
year-on-year at comparable currency rates, a good tions. segments supported by centralized inside sales
foundation for 2020. call centers located in the US, Canada and UK.
Our well-established digital transformation conti- We plan to expand these to other major
Demag integration nued according to plan in 2019. Spain and India markets. Staffing of these call centers will con-
As planned, the integration of the Demag and Kone- went live with oneKONECRANES tools and systems tinue due to the promising signs of sustainable
cranes Service organizations in Germany under one in Q1, followed by Poland, Hungary and South and continued growth in the customer segments
legal entity was completed at the end of Q2, and Africa in in Q2 and Germany´s integrated Demag they serve.
overall 18 out of 19 countries are now integrated service operations in H2. Preparations are procee-
with the expected run-rate synergies achieved. De- ding in other countries. The target of having 90%
mag service products – e.g. Status Control, Demag oneKONECRANES global coverage by the end of
hoist retrofits and general overhauls – have been 2019 was achieved.
incorporated into the Konecranes service offering,
Annual Review 2019 13YEAR 2019 STRATEGY BUSINESS AREAS R&D SUSTAINABILITY KONECRANES AS AN INVESTMENT
Other milestones
Order book at the Number of employees
• I n August we acquired Trevolution Service SRL, one of Italy’s end of 2019, MEUR Adjusted EBITA, % at the end of 2019
largest independent crane service companies specializing in crane
maintenance, repairs, modernizations, spare parts and hoists and
components. The acquisition enlarges Konecranes’ field service 215.7 16.6 7,762
operations and provides an excellent opportunity to take on even
larger projects and agreements in Italy.
• I n July, we launched a TRUCONNECT® retrofit that can give customers
Orders received, MEUR Net Sales, MEUR
a comprehensive fleet view by allowing Demag assets to be added to
the same remotely-monitored fleet with Konecranes-branded assets.
1,400 1,400
The retrofit equips Demag DMR SafeControl-equipped hoists and
1,200 1,200
cranes with the hardware needed for Konecranes TRUCONNECT®
1,000 1,000
Remote Monitoring. 800 800
600
986.5 1,015.1 600
1,192.5 1,259.7
400 400
200 200
0 0
2018 2019 2018 2019
Lifting GE Power’s business in France
In October 2019, Konecranes won an agreement with be on site at GE’s Belfort and Bourogne locations for two and minimize downtime during every shift, while providing a
GE Power in northern France to provide service to 264 years, and Konecranes’ TRUCONNECT® Remote Service will be transparent view of all their crane-related events and activities.
cranes and jibs. activated for 14 of the cranes to help support GE’s maintenance
operations and improve safety and productivity. The agreement is the largest for Konecranes’ northern France
The agreement included MAINMAN Planned Maintenance, branch and a testament to the Konecranes model of improving
Routine Maintenance, assistance for compliance inspections Konecranes aims not only to keep GE’s cranes running customers’ business efficiency, safety and performance.
and Consultation Services. Two Konecranes technicianas will sufficiently; we also want to help them maximize productivity
Annual Review 2019 14YEAR 2019 STRATEGY BUSINESS AREAS R&D SUSTAINABILITY KONECRANES AS AN INVESTMENT
INDUSTRIAL
EQUIPMENT
Highlights of 2019: new products and level in countries, while opportunities in Waste- operations from the ongoing restructuring in Wetter,
platform consolidation to-Energy remained steady or even grew. Paper Germany and in Vernouillet, France; from 25% higher
2019 was a significant year for BA Industrial and Forest remained strong, while the automotive US custom tariffs for the import of crane components
Equipment: we launched three new innovative industry declined. from China; from national strikes in Finland at the
products. We also made significant progress in end of 2019; and from certain process crane projects.
streamlining the combined operations of Konecranes Geographically, the EMEA region showed the first
and Demag and in reducing the number of our signs of softening demand, although there were As part of the difficult decisions of the MHPS
product platforms. We performed well in various variations by sub-region. The Nordic and Southeast integration project, 12 production plants have been
industries including Waste-to-Energy, Paper and European countries stayed reasonably steady, while discontinued globally. Adjustments to the operational
Forest, and Automotive. In all these areas, our the large Central European market weakened, set-up and modernization of production facilities in
automated solutions and safety and productivity- especially Germany and the UK. Demand in North Wetter proceeded, as did the closing process of our
enhancing smart features were well appreciated by America remained fairly strong but continued to chain hoist factory in Vernouillet.
customers. Whatever we develop, it must be part of be low in South America. Asia’s demand was fairly
the increasingly digitalizing world. stable. When considering the Demag integration and our
ongoing development work in commercial and lean
Challenging year, focus on strengthening The market changes impacted volumes of our projects, we believe we are on a path towards
our base for future growth fast-cycle component business to distributors and growth. Our Asian presence and market coverage
From a market point of view, 2019 was challenging independent crane builders during the year; the will substantially increase through the acquisition of
due to increasing business and political uncertainty product mix turned less favorable as the weighting full ownership of MHE-Demag, which has a strong
in many areas in the world. The activity level by of components declined and the portion of complete position in strategically important and fast-growing
industry and geographic area varied. Demand in heavier industrial cranes increased in our order book Southeast Asia.
General Manufacturing, with its smaller individual and sales, affecting our profitability. Simultaneously,
opportunities, followed the overall investment activity there were temporary, additional cost burdens to our
Annual Review 2019 15YEAR 2019 STRATEGY BUSINESS AREAS R&D SUSTAINABILITY KONECRANES AS AN INVESTMENT
Building the framework for future growth
Order book at the Number of employees
• I n 2019, our product families were modernized with the launch of three new end of 2019, MEUR Adjusted EBITA, % at the end of 2019
core products. The new C-, S-, and M-series represent the next generation in
their fields with new technology and innovations.
648.9 1.5 5,397
•T
he new products enable us to reach our target of reducing the number of
product platforms to 14. In 2019, we not only improved cost efficiency, but
simultaneously added new product features to our traditional products.
Orders received, MEUR Net Sales, MEUR
•W
e have made signicant progress in streamlining our combined operations of 1,400 1,400
Konecranes and Demag. The long-term operational cost base has improved 1,200 1,200
despite the higher-than-expected temporary implementation costs. 1,000 1,000
800 800
•W
e had continuous success in global projects for the Waste-to-Energy 600
1,248.9 1,251.5 600
1,150.9 1,185.5
industry. The market has been active, and many high-capacity municipal waste 400 400
incineration plants globally use our technology. Similarly, several paper industry 200 200
customers are using our automatic storage and retrieval systems for paper rolls. 0 0
2018 2019 2018 2019
Setting the benchmark for precise, smooth and speedy load handling
WD Steelworks is a modern metal works focused on The new Konecranes S-series crane met all of WD Steelworks’ Digital intelligence does not end there, as Konecranes
a wide range of marine equipment such as fuel tanks, expectations. An industry-first, geometrically aligned rope TRUCONNECT® provides fully transparent and real-time
targa bars and other boat parts for Boomerang boats. drum design and off-set reeving with synthetic rope allows information on crane performance and maintenance needs,
With a special set of requirements for precision and for balanced wheel loads and longer lifetime for all reeving allowing for the best possible operational efficiency.
process cleanliness, they were looking for a lifting components. In addition to the mechanical intelligence,
solution to meet all their needs. Konecranes Smart Features bring tangible benefits to “So far the crane has been excellent, and we have been
everyday work. wondering how we managed before. This definitely creates
“For motor installations, we needed a crane that was very new opportunities for our future,” Tikander said.
precise and smooth as we are talking about millimeters “Pulling or pushing the hook takes the crane above the
when it comes to the potential to scratch surfaces. We didn’t load and automatic Hook Centering takes care of the rest.
want any greasy ropes or chains touching the boat,” said Snag Prevention makes working a lot safer. We appreciate
WD Steelworks Chairman of the Board Wille Törnqvist. precision, smoothness, speed and cleanliness. Now we have
them all,” said WD Steelworks CEO Daniel Tikander.
Annual Review 2019 16YEAR 2019 STRATEGY BUSINESS AREAS R&D SUSTAINABILITY KONECRANES AS AN INVESTMENT
PORT
SOLUTIONS
Solution selling and automation driving and predictability, while software-based intelligence the container yard. We also retrofit Smart Features
future success optimizes container throughput and the operation of and automation technology on non-Konecranes
In 2019, Port Solutions focused on further entire container terminals. equipment.
developing its solution-selling business model,
better aligning with the customer buying process There are over 30 highly automated container Port Solutions’ expertise in automation is backed up
for equipment, software and services. The model terminals in the world. Konecranes has supplied with the world’s best in-house container handling
is designed to ensure maximum customer value automated equipment systems to 65% of these knowledge, which lets Konecranes efficiently define
by minimizing the customer’s integration burden sites. Konecranes has a wide and deep offering the type and amount of equipment needed to meet
when purchasing equipment, software and services of manned equipment, automated equipment, the customer’s required performance level. It means
as separate categories. The solution approach has software, and system engineering and integration. we can integrate equipment, service and software
already made an impression on customers, one This offering covers both greenfield and brownfield efficiently, as the customer needs, because the
being the Port of Ashdod in Israel. sites, where Konecranes Port Services’ ability to expertise and interfaces are in our hands. Regardless
retrofit Smart Features on existing equipment gives of the brand, we can create a turnkey, tailored
Another key target area for Port Solutions continued customers the ability to move towards automation to and modular service environment that boosts data
to be tapping the opportunities stemming from the degree, and at the speed, they desire. visibility, safety, eco-efficiency and the customer’s
increasing automation at customer sites. Container bottom line.
handling equipment such as Automated RMGs, A good example of this is our customer in Turkey,
Automated RTGs, Automated Guided Vehicles and DP World Yarimca, where we have retrofitted remote
Automated Straddle Carriers increase productivity operation technology on two Konecranes RTGs in
Annual Review 2019 17YEAR 2019 STRATEGY BUSINESS AREAS R&D SUSTAINABILITY KONECRANES AS AN INVESTMENT
Year 2019 in numbers
Overall the market sentiment for Business Area Port Solutions remained stable
and at a good level in 2019. Full-year net sales totaled EUR 1.12 billion, an Order book at the Number of employees
annual rise of 10.2%, and adjusted EBITA was up by 21.8%. There was end of 2019, MEUR Adjusted EBITA, % at the end of 2019
particularly good project execution in 2019 for large ongoing projects which
helped boost Port Solutions’ EBITA.
959.7 7.8 2,938
Good order intake continued throughout the year for Rubber Tired Gantry
Cranes, Lift Trucks and Port Services. Mobile Harbor Cranes, however,
experienced a decline in order intake in 2019.
Orders received, MEUR Net Sales, MEUR
Great progress was made in the harmonization of the Port Solutions product
portfolio, integrating container handling management software into the 1,400 1,400
offering in a seamless manner. A number of customers announced large 1,200 1,200
infrastructure investment plans, with an increasing focus on brown field over 1,000 1,000
green field projects. 800 800
600
1,096.0 1,147.3 600
1,012.9 1,115.7
After a decline in early 2019, global container throughput reached a new all- 400 400
time high in August before declining again during the last months of the year. 200 200
At the end of December, global container throughput was approximately 2.5% 0 0
2018 2019 2018 2019
lower than the year before.
Celebrating important milestones for key products in 2019
•G
eorgia Ports Authority continued its strategic partnership with Konecranes
with an order for a fleet of 20 Konecranes Rubber Tired Gantry (RTG)
cranes to support the expansion of the Port of Savannah – bringing
the number of Konecranes RTGs there to around 180.
A significant strategic win for
•T
he 2,000th Konecranes Gottwald Mobile Harbor Crane was delivered to
the Port Solutions business
the Ership terminal in the Mediterranean port of Cartagena in south-eastern
Spain. Konecranes invented the Mobile Harbor Crane 64 years ago, and In the spring of 2019, Port Solutions secured a milestone win with the Hadarom container
Konecranes Gottwald Mobile Harbor Cranes have been sold to over 100 terminal in the Port of Ashdod, Israel. This customer was looking for an unprecedented
countries. degree of integration between container handling equipment and software intelligence for
terminal operation and management. Konecranes is delivering a complete solution
•K
onecranes Lift Trucks celebrated 25 years in of operations. Since the first comprising automated container handling equipment, a Terminal Operating System and an
truck was made in 1994, Konecranes has sold nearly 10,000 lift trucks Equipment Control System. The order is one of the largest ever received by
across 120 countries. Konecranes Lift Trucks are renowned for their Konecranes and a major step forward in the execution of Port Solutions’ strategy with its
advanced technology, excellent build quality and service network. solution-based business model.
Annual Review 2019 18YEAR 2019 STRATEGY BUSINESS AREAS R&D SUSTAINABILITY KONECRANES AS AN INVESTMENT
RESEARCH AND TECHNOLOGY
DEVELOPMENT
Konecranes invests a considerable amount of money in technology
development every year. We do this because we expect a specific
payback from this investment: technology leadership is the leading
factor for revenue growth among top companies. There are no
successful industrial companies, past or present, that have not
invested in technology and innovation.
Three new product platforms
launched in one go
Years of research and product development were
rewarded when Konecranes launched three new
product platforms in September 2019: Konecranes S-,
C- and M-series. The previous flagship wire rope hoist,
Konecranes CXT, was a major innovation of its time
and remains one of the most successful wire rope
hoists in the market. However, available technologies
have changed and brought new ideas for product
design.
These products resulted from the Konecranes open
innovation culture that turns great ideas into great
products, like the Konecranes S-series’ synthetic rope.
The Konecranes S-series hoist has several unique and
patented features visible in the hoist’s appearance:
reeving arrangement, tilted rope drum and synthetic
rope fixing. The innovative design enables lighter
structures resulting in improved material usage and
lower environmental impact.
Annual Review 2019 19YEAR 2019 STRATEGY BUSINESS AREAS R&D SUSTAINABILITY KONECRANES AS AN INVESTMENT
The journey from idea to product takes time and “Participating in the Konecranes CheckApp where we have succeeded and where we can
involves many people and disciplines. Safety is a pilot started with a discussion about our improve. This allows us to react to customer needs
top priority and we test the products extensively in real needs and problems and ended with a more quickly and use feedback to improve products
our Reliability & Testing Centers. The testing of the solution to solve them.” Peter Hutchinson, Site and services.
synthetic rope began already in 2014. Service and Maintenance Manager, Caterpillar, UK
Extending the innovation
Digital embedded Other digital technologies, such as virtual reality ecosystem continues
Konecranes has developed a digital strategy to and augmented reality, are used to train service The systematic build-up of an innovation ecosystem
support its vision and increase the profitability and technicians on new products and increase their started a couple of years ago. In 2019, we already
growth of the company. The strategy is executed understanding of maintenance needs and correct saw concrete results from this effort. Last year
through a portfolio of digital initiatives that improve operating procedures. Konecranes discovered a Swedish AI-start-up
our current operations and offering, and explore through our own systematic startup program,
totally new business opportunities. In addition, we Information technology development at Konecranes REACH. We are now using their AI-powered
established the Digital Accelerator organization to now follows agile methodologies, based on iterative troubleshooting software commercially in Business
support digital transformation work, fuelling internal work sprints, reviews and nimble communication. Area Service to increase technical support efficiency
projects in the area. This allows the development teams to work more and serve our customers even faster than before.
efficiently and with improved quality. Another highlight is our partnership from 2017 with
For port customers, Konecranes has expanded its a deep tech startup, with first customer installations
port automation offering by continuing to develop First Data Science Lab established now completed. Their solution analyses the
a state-of-the-art Terminal Operating System Konecranes has tens of thousands of connected structural integrity of sea containers during lifting
concept for e.g. automated container terminals. devices across the world and digital lifecycle records to reduce quality costs and processing time from
This will work with the Equipment Control System, from over 1.1 million customer assets. In order to container logistics. The REACH program continued
accompanied by our equipment and service offering. take advantage of this massive amount of data, through 2019 and we started collaborating with
Another milestone in port technology development Konecranes established a Data Science Lab in Lyon, three new startups, with use cases from Port
was the demonstration in Q4 of our capability to France that builds analytics and insights from data. Solutions and Service.
retrofit competitor equipment with Konecranes’ With centralized data science skills, Konecranes
brand neutral automation solutions. Both solutions can capitalize, share and turn data models into Co-operation with ecosystems like DIMECC’s
enable growth and new business for Konecranes. production. Intelligent Industry Ecosystem and startup hubs,
like Maria 01, are an important part of our extended
For industrial and port customers, the digital The Data Science Lab projects are in full speed. One innovation ecosystem. The benefits of embracing
customer offering widened with several new digital concrete project to increase customer-centricity is open innovation hve been now extended by
services, like Konecranes CheckApp for Daily the further analysis of our customer feedback data. launching the first internal project accelerator at
Inspections, TRUCONNECT® Wire Rope Monitoring After a service or equipment delivery, Konecranes Maria 01 with four R&D projects. The teams are
and Remote Operation Station 2.0. The services measures customers’ experience with the Voice of working in a startup-like environment to quickly
address specified customer problems and needs, and Customer survey. With data science and AI-driven develop customer-centric digital solutions.
we collaborate with multiple industrial companies to analysis, we can derive more information from
ensure the services fit their purpose. ratings and free text comments and see better
Annual Review 2019 20YEAR 2019 STRATEGY BUSINESS AREAS R&D SUSTAINABILITY KONECRANES AS AN INVESTMENT
From optimized, systematic maintenance services to leading
PRODUCT OVERVIEW 2019 lifting solutions and software, Konecranes’ products fulfill
every need.
SERVICE YOURKONECRANES.COM PARTS KONECRANES STORE MODERNIZATIONS
Konecranes provides specialized yourKONECRANES is our cloud-based We offer genuine Konecranes spare parts Konecranes STORE offers 24/7 access We can completely modernize an existing
maintenance services and spare parts customer portal. Crane usage data, as well as replacement parts for all other to spare parts and accessories for many crane as an alternative to replacing it.
for all types and makes of industrial maintenance data and asset details are makes and models. Konecranes’ ability to brands, makes and models of cranes and Modernizations can help increase capacity,
cranes and hoists. Our offering includes linked, giving a transparent view of events design and manufacture parts includes hoists, and selected pre-configured lifting speed, duty, ergonomics and load control.
inspections and preventive maintenance, and activities. rebuilding, reverse engineering, made-to- equipment.
predictive maintenance and remote order parts, and component and assembly
monitoring, corrective maintenance modernization.
and retrofits, consultation services,
modernization services, new equipment
and spare parts.
SMART FEATURES INDUSTRIAL CRANES – CONFIGURED- INDUSTRIAL CRANES – ENGINEERED- WORKSTATION LIFTING SYSTEMS PRODUCTS FOR HAZARDOUS
Konecranes Smart Features are available TO-ORDER CRANES (CTO) TO-ORDER CRANES (ETO) Konecranes’ light lifting products offer ENVIRONMENTS
for electric overhead traveling cranes Konecranes’ range of Configured-to-Order Konecranes’ Engineered-to-Order safe and reliable material handling for Our comprehensive range of explosion-
and port cranes, bringing improvements industrial cranes, from standard to the cranes incorporate intelligent features, workstations and production lines across a proof cranes and components draws from
to both safety and productivity through most advanced, covers almost every lifting ergonomic controls and automation to wide range of manufacturing operations. In our long experience in explosion-proof
software and hardware. Boasting application. Launched in 2019, our new assist operators. Our newly launched 2019, we introduced the new C-series: built applications. World-class engineering and
features such as Sway Control and Target S-series crane has never-before-seen M-series is the most compact and modular for over a million operations, it is our most product development defines the lifting
Positioning, they can be installed on new features like the tilted drum, offset reeving, heavy winch in the business, maximizing advanced electrical chain hoist to date. equipment, which is designed for extremely
cranes or retrofitted to existing ones. synthetic rope and the girder sliding performance and minimizing downtime. demanding work environments.
connection.
Annual Review 2019 21YEAR 2019 STRATEGY BUSINESS AREAS R&D SUSTAINABILITY KONECRANES AS AN INVESTMENT
UNIVERSAL CRANES PROCESS CRANES MODULAR CRANES REMOTE OPERATING STATION (ROS) KONECRANES LIVE CHANNEL
Our Demag universal crane portfolio We tailor our Demag process cranes Our Demag modular crane components Featuring the same controls as an Konecranes Live Channel allows a
includes single and double-girder to meet customers’ production needs, can be combined to create individual operator’s cabin, our ROS enables remote prospective buyer to test-drive a crane
overhead traveling cranes and suspension maximizing efficiency, availability and suspension monorails, suspension cranes crane control through real-time camera without leaving the office. Using a crane
cranes. Built on decades of experience, safety. We provide fully automated crane and pillar-mounted and wall-mounted views. The ROS brings savings and equipped with the latest Konecranes Smart
they deliver quality, efficiency and solutions for industrial storage spaces and slewing jib crane systems, from a ergonomics of use to the customer since Features, customers can conveniently
reliability. manufacturing processes. single working station up to a complete no operating cabin is needed on the crane. experience our products via an online call.
intralogistics system.
COMPONENTS FORKLIFT TRUCKS CONTAINER LIFT TRUCKS REACH STACKERS PORT SERVICE
Our Demag components include hoists, Konecranes heavy-duty forklift trucks have Maneuverable, strong and reliable, Powerful, efficient and offering proven We provide technical support for all makes
control units and other crane modules lifting capacities ranging from 10 to 65 Konecranes container lift trucks handle performance, Konecranes reach stackers and models of equipment in container
as well as drives, wheel blocks, travel tons. The OPTIMA cabin provides increased empty (8–10 tons) and laden (30–45 have lifting capacities ranging from 10 to handling, bulk handling and shipbuilding
units, inverters, energy supply lines and safety and visibility and the latest engines tons) containers at ports and intermodal 80 tons for container handling, with special operations. We help customers to maintain
control systems. We offer a complete are eco-efficient and powerful. terminals. attachments for a wide range of industrial the safety and reliability of their equipment
range of products, from sub-assemblies to applications. throughout its lifetime.
complete systems.
Annual Review 2019 22YEAR 2019 STRATEGY BUSINESS AREAS R&D SUSTAINABILITY KONECRANES AS AN INVESTMENT
TERMINAL OPERATING SYSTEM SHIPYARD CRANES CONTAINER HANDLING EQUIPMENT MOBILE HARBOR CRANES STRADDLE CARRIERS
Our TBA Group’s Terminal Operating Konecranes’ offering for shipyard material Konecranes’ offering for container handling Konecranes Gottwald Mobile Harbor Cranes Konecranes Noell Straddle Carriers
Systems (TOS) enable users to manage handling includes plate and block handling includes ship-to-shore cranes, rubber- are a very efficient and flexible solution for are available in several sizes, stacking
cargo flow within container, bulk and cranes for hull manufacturing, floating dock tired gantry cranes, rail-mounted gantry handling containers, bulk materials, general containers 1-over-2 or 1-over-3.
general cargo ports and terminals. cranes, single-boom and double-boom cranes, automated RTG and RMG cranes, cargo and project cargoes in terminals. Maneuverable, fast and reliable, these
Integration with on-site equipment, and cranes for ship outfitting, and the Goliath automated guided vehicles and straddle machines can be fully automated without
real-time reporting, allows users to plan gantry crane for ship block assembly. carriers. the need for additional yard infrastructure.
workloads, define storage locations,
improve decision making and efficiently
manage operations.
AUTOMATED STACKING CRANE AUTOMATED HORIZONTAL RAIL MOUNTED GANTRY CRANE SHIP-TO-SHORE (STS) CRANES NUCLEAR CRANES
(ASC) SYSTEMS TRANSPORT (RMG) Used for container ship loading and We provide nuclear cranes, specialized
Konecranes offers automated rail-mounted Konecranes offers a complete portfolio Konecranes’ RMG sets the standard unloading, our STS cranes have a lifting lifting equipment and licensing support
gantry (ARMG) and automated rubber- of automated horizontal transport for intermodal container handling. It capacity of up to 65 tons and an outreach for our customers throughout the global
tired gantry (ARTG) systems. They offer for automated container handling in incorporates a host of technological of up to 70 meters. nuclear industry.
container terminals all the advantages of terminals. This includes the Konecranes innovations, most notably smarter cabin
fully automated operations. Noell A-SPRINTER, Konecranes Gottwald with video and monitoring technology
Automated Guided Vehicles and Automated that provides superb visibility to container
Terminal Tractors. handling operations.
Annual Review 2019 23YEAR 2019 STRATEGY BUSINESS AREAS R&D SUSTAINABILITY KONECRANES AS AN INVESTMENT
SUSTAINABILITY
AT KONECRANES
We believe that sustainable growth
results from strong, responsible
performance. We create value
for our stakeholders on multiple
fronts, through circular economy,
digitalization and our deeply rooted
safety culture. For our customers,
we offer solutions they can rely on
and on-time, impeccable service.
With our service concept, all lifting
equipment can be maintained
in excellent condition for top
performance, extending the life
span to the fullest.
Annual Review 2019 24YEAR 2019 STRATEGY BUSINESS AREAS R&D SUSTAINABILITY KONECRANES AS AN INVESTMENT
natural hazard risk assessments at certain company In 2019 we:
Sustainable offering and circularity
sites. • Reviewed basic HR procedures such as
We design our products with their complete life
• Finished an extensive Life Cycle Assessment recruitment, career development, rewarding,
cycle in mind, as the majority of the environmental (LCA) calculation on one product group to find and learning & development to ensure that
impact of products’ lifecycle is defined at the product improvement areas. diversity issues are properly taken into account,
design stage. Building our processes around circular • Started drafting of a Climate road map with the top our decision-making process is transparent, and
economy principles helps us improve our resource management selections can be justified.
and energy efficiency while creating value for the • Prepared a training on unconscious bias for top
customer by reducing their environmental footprint. Safe workplace and safe products leadership and line managers and established an
Safety at Konecranes begins with providing our internal platform for sharing ideas on diversity and
In 2019 we: customers with equipment and services that enable inclusion.
• Continued our work on making circularity an them to work efficiently and safely throughout the • Launched an initiative where Executive Managers
integral part of key internal processes are mentoring a female mentee.
product lifecycle. We incorporate safety into the
• Held internal workshops and trainings on circular design, manufacturing, maintenance and servicing
economy
of our products. Our safety culture is based on
• Started work on a Circular Economy roadmap
the principle that there is no work so urgent or
Climate action and resource efficiency important that it cannot be done safely. We strive
for a working culture where workplace injuries and
We are committed to providing our customers with
sustainable solutions and services while preventing illnesses are prevented with our established standard
operating procedures and behavioral safety rules.
Our targets
and minimizing emissions and waste. The focus of
our climate work is to strive for energy efficiency
and emission reductions and to analyze the possible In 2019 we: • Code of Conduct training
direct and indirect impacts climate change might • Identified the strategic focus areas for Safety. For • Assessing suppliers for sustainability
have on on our business. We work hard to reduce more details, see the Sustainability Report • Certified ISO 14001 Environmental
our carbon footprint through setting challenging • Rolled out the Konecranes Life Saving Behaviors Management Systems in all our factories
targets for energy efficiency and emissions. • Improved our Lost-Time Accident (LTA) rate by • Reducing energy intensity
9.4% • Reducing emission intensity in each Business Area
In 2019 we:
• Decreasing our Lost-Time Accident level
• Continued to work towards meeting our A diverse, inclusive and engaging work
• Significantly reducing serious injuries and achieving zero fatalities
environmental targets which include reducing environment
our energy intensity (MWh/sales) by 25% and Our innovation not only focuses on products, • Certified Occupational Health and Safety management systems
greenhouse gas emission intensity (tCO2e/sales) technologies and service solutions, but also on OHSAS 18001/ISO 45001 in all factories
by 50% during 2017−2025. In addition, we new ways of working and leveraging workforce • Tracking, monitoring and managing subcontractor safety
are committed to powering our factories with diversity to amplify innovation. Fostering diversity • Increasing the proportion of women in top management
100% renewable electricity by 2025. See the in terms of gender, age, cultural and educational • Balancing nationalities in our Group management to maintain
Sustainability Report for more information about backgrounds has been repeatedly proven to a global mindset
our 2019 performance. encourage innovation and deliver exceptional
• Finalized a climate risk scenario analysis to organizational performance.
strengthen our understanding of climate change See the Sustainability Report for more details.
and its physical and transitional risks as well as
related market risks. We have also conducted
Annual Review 2019 25You can also read
