KCI Konecranes has reported an 9% rise in sales last year to Euro 703m. New orders rose 42% to Euro 764m. The rise was attributed to a combination of organic growth and several acquisitions such as Noell Service und Maschinentechnik in Germany.

Group operating profit was up 23% to Euro 39.6m. The operating income before goodwill amortisation (EBITA) was Euro 43.7m, a rise of 25.6%. Income before taxes totalled Euro 34m, 12.6% up on 1999’s figure.

BUSINESS REVIEW BY BUSINESS AREA Maintenance Services: Order intake increased 28.4% over 1999 and sales increased 24.5%. At year end, the number of cranes under maintenance contracts totalled 187,183, up 12% year-on-year. Germany recorded the fastest growth, following several acquisitions including the maintenance activities of Noell Service und Maschinentechnik. At the beginning of 2000 non-core activities in the British maintenance services company were sold. Disregarding acquisitions and disposals, the organic sales growth was 17%. Operating income amounted to Euro 21.3m, up 10 % from 1999.

Standard Lifting Equipment: Order intake grew 19.5% on 1999 and sales were up 16%. The company said that development was “very good in Europe, good in America and still less than satisfactory in Asia”. Operating income was up nearly 5% to Euro 22.5m. The result was hit by a Euro 1.7m cost attributed to the launch of a new product platform. “Market prospects as a whole remain stable and the expectations for sales growth and margins improvement during 2001 are favourable. The few uncertainties that can be seen relate to the general investment climate in the USA and to the speed and size of the Asian recovery,” the company said.

Special Cranes: In a strong year, the order intake rose 105% and sales were up 20.4%. Orders growth was very fast within harbour and shipyard cranes, the company said, but orders for industrial heavy duty cranes also had a strong growth. Success was attributed to KCI’s product range and new control equipment. Operating income was up 11% to Euro 13.8m. “Prospects for the year 2001 are extraordinary,” said the company. “Orders-in-hand run record high and we have already secured a good growth for the whole of 2001, both in sales and margins. Orders-in-hand are presently accumulating for 2002 and 2003, which clearly indicates a continuation of the favourable development. Our thoroughly modern product range combine low production costing with superior economic benefits for the customer. Our global, yet focused sales network have laid the foundations for a lasting success.”

President and CEO Stig Gustavson issued the following statement: “The year 2000 was a year full of achievements. The Asian economic crisis, which for one year diverted the Group from its growth track, prompted the Group to speed up its development. In the year 2000 we scored.

“Our achievements in Maintenance Services have been remarkable. During the second quarter, we were forced to discontinue work on our much-needed administrative computer ERP-tool, the Omniman. The Omniman was the only Group development effort, which did not give a positive contribution.

“In spite of this setback, maintenance achieved an organic growth of 17%, and a total growth with acquisitions of an impressive 24.5 %.

“The number of cranes in our maintenance agreement base grew, but this time also the average value per crane increased with 19%.

“We are very proud of our R&D achievements. Early on, we understood the benefits of new technology in control design. Now we have achieved the next level, where not only old controls are replaced, but where all other benefits of the digital revolution have been incorporated into products. We speak here about benefits for the whole crane structure (cranes can be built lighter), benefits for the design and commissioning time, benefits for crane reliability etc. As can be seen in our figures, customer reactions are very, very encouraging.

“We have achieved an important breakthrough in one of the world’s most demanding large crane markets: Germany. Germany being the home base for several of our best competitors, we earlier concentrated on other markets. Now, with quality products and impeccable service we made a concentrated effort. Although our German presence still is young, I do not hesitate to describe our venture a success.

“The markets in 2000 were flat. The Group’s exposure to market conditions is not very high – major developments such as the Asian crisis and the collapse of the Soviet Union apart. Maintenance Services is a very steady growth business, and our equipment sales growth is based on penetration growth rather than market growth.

“A flat market also usually fuels opportunities for industry consolidation, again with benefits to be gained for the Group.

“Activity levels at year end and early 2001 further support our strong confidence in a very good development in 2001 and beyond.

“The prospects for the year 2001 indicate confirmation and improvement of favourable developments, especially the order intake, of the year 2000. Sales and earnings growth is largely fuelled by new products and increased market share, with less exposure to market volatility.”

KCI KONECRANES’ ACQUISITIONS IN 2000 In January 2000 it bought the crane operations of the German company Kulicke in Berlin and its two service companies in Schwedt and Berlin-Köpenick.

In March it signed the purchase of the service business of Noell Service und Maschinentechnik GmbH in Germany. With the Noell acquisition the Group strengthened its presence in the maintenance business, especially in Germany and also in some harbours outside Germany.

At the beginning of April the crane-related after-market activities of the German Donges Stahlbau GmbH were acquired and integrated into the German maintenance services organisation.

Crane and service company Gruas Mexico SA de CV was acquired in April. Gruas Mexico was previously KCI Konecranes’ Mexican licensee and the Group already held 10% of the company.

In the USA the crane and maintenance operations of FT Crowe were acquired. The acquisition was completed in July and the operations were integrated with the operations of Konecranes Inc.

In September it acquired the Polish crane and service company Cranex.

In October, associate company Prim (of which Konecranes owns 25%) acquired the crane business assets of Marte.

At the end of the fiscal year it increased its stake in Tepa-Mestarit Oy from 50% to 100%. The company supplies plant maintenance services in western Finland.

At the end of the year it acquired the after-market business of harbour crane maker Caillard in Le Havre, France from Rolls-Royce Power Engineering Plc of the UK.