30.01.2004

Kone shows solid growth

Kone the Finnish escalator lifts to container cranes business has announced its 2003 audited results, which show group revenues rising 23 per cent to €5.3 billion (UK£3.62 billion). Most of the increase is due to the Partek acquisition revenues applying for a full year in 2003 compared to half a year in 2002. Group order intake rose by almost 40 per cent to €4.6 billion (£3.14 billion), partially for the same reason, but was boosted by a significant order for Kalmar. EBITDA rose by almost 25 per cent to €418 million (£285.3 million), 7.8 per cent of sales.

2003 was a year in which the firm set out to restructure itself into a company “focused on moving people and materials”, following the purchase in 2002 of Partek, best known for its ownership of Hiab, the world-leading manufacturer of articulated truck loading cranes.

So as part of the restructuring, out went Partek Forestry, producers of specialist logging equipment, and out went Valmet tractors, leaving the company with Kone escalators, automatic doors and passenger lifts (elevators), Kalmar container handling cranes and Hiab truck loading equipment.

The Partek forestry business, (less the forestry cranes, which were put back into Hiab) was sold to Komatsu for €120 million (£81.9 million). The deal agreed in early November was completed on December 31. The Valmet tractor sale is being completed this month for €600 million (£409.5 million) to Agco.

The Kalmar and Hiab businesses have been merged into a new Cargotec division and have been responsible for most of the groups headline growth numbers. Cargotec sales revenues were €1.3 billion (£0.89 billion), an increase of 6 per cent on 2002. Parts and service revenues, a business that Kone is pushing hard, now represents 19 per cent of Cargotec revenues.

Operating income at Cargotec rose by over 60 per cent to €75 million (£51.19 million), but only represented 5.6 per cent of net sales, beating the groups declared 5 per cent target for Cargotec but well below the 10 per cent achieved by the Kone elevator/escalator group.

Orders rose 18 per cent for the year to €1.5 billion (£1.02 billion). Order intake for HIAB products was €653 million, up 2 per cent on 2002. There was a notable increase in orders for truck-mounted forklifts and larger loader cranes.

Kalmars order intake rose 18 per cent to €835 million (£570 million. During the year Kalmar won the largest order ever placed by a European customer for ship to shore cranes, when they secured an order for 10 Super post Panamax cranes for Antwerp’s new port extension. The cranes will be delivered in late 2004 and 2005.

The geographical split of Cargotec sales remained similar to 2002 with 55 per cent coming from Europe, 27 per cent from North America and 11 per cent from Asia and the Pacific Rim.

The conclusion of the tractor sale in January will virtually eliminate gearing at Kone reducing debt to zero from around €1.2 million (£0.82 million) in 2002. The company says that they are well placed now to develop the two core divisions.