Committed to growth
Annual Review 2018 Annual Review Financial Review Governance Sustainability Report
Committed to growth HOW TO READ THIS REPORT CONTENTS
An assessment of the year’s This year marks the 25th anniversary of Konecranes as an operations and a view of the Konecranes in a snapshot 2 independent company. In a quarter of a century, we have upcoming year and future prospects grown to become a leading lifting equipment solution provider Committed ar2018.konecranes.com/en 2018 in numbers 3 on a global scale. to growth Annual Review 2018 A technology company 4 As the global material handling market evolves, we will continue to lead in developing next-generation solutions. CEO’s letter 6 Through intelligent design and the implementation of digital OTHER REPORTS solutions that make our products smarter, we are making our Strategy 8 customers’ operations safer and more efficient. Summary-level reports about Konecranes’ financial results, Market review 11 Thanks to the acquisition of MHPS, we are now stronger than financial position and cash flows Financial ar2018.konecranes.com/en Our business areas 12 ever to face future challenges and take on new business Review opportunities. Our Service business has already started to 2018 leverage our additional installed equipment base, but we have Research and technology 14 only just scratched the surface of its potential. Service will be an even stronger growth engine for Konecranes going forward. How we make an impact 17 Information regarding 2019 will be the third and final year of the Konecranes-MHPS Konecranes’ governing principles, Creating sustainable value 18 integration. As we start to emerge from this phase, we are group structure, salaries and Governance compensation of the CEO and Konecranes as an investment 21 ready to move on with the next steps of our strategy and 2018 Board of Directors adopt a greater role in the material handling ecosystem of ar2018.konecranes.com/en our customers. This publication is for general informational purposes only. Konecranes reserves the right at any time, without notice, We are ready to shift gears to growth. Information about Konecranes’ sustainability work, its management, to alter or discontinue the products and/or specifications actions, goals and results referenced herein. This publication creates no warranty on Sustainability ar2018.konecranes.com/en the part of Konecranes, express or implied, including but not Report 2018 limited to any implied warranty or merchantability or fitness for a particular purpose. www.konecranes.com
Konecranes Annual Review 2018 1 Annual Review Konecranes in a snapshot Financial Review Governance Sustainability Report
Konecranes in In 2018, Group sales totaled a snapshot EUR 3,156 million. Konecranes is a world- leading group of Lifting Businesses™, serving a broad range of customers, including manufacturing and process industries, shipyards, ports and terminals. Konecranes provides productivity enhancing lifting solutions as well as services for lifting equipment of all makes. In 2018, Group sales totaled EUR 3,156 million. The Group has 16,100 employees at 600 locations in 50 countries. Konecranes shares are listed on the Nasdaq Helsinki (KCR).
Konecranes Annual Review 2018 2 Annual Review Konecranes in a snapshot Financial Review Governance Sustainability Report
2018 in numbers
Order intake Net sales Adjusted EBITA (+2.8%) (+0.6%) 3,090.3 3,156.1 8.1 MEUR MEUR %
3,007.4 MEUR in 2017 3,137.2 MEUR in 2017 6.9% in 2017
Order book Number of active and Gearing (+11.7%) pending patents 1,715.4 2,300 42.5 MEUR %
1,535.8 MEUR in 2017 Largest portfolio in the lifting industry 41.1% in 2017
Konecranes Annual Review 2018 3 Annual Review A technology company Financial Review Governance Sustainability Report
Market leader in crane service A technology Konecranes is the market leader in crane service, with Pre the world’s most extensive crane service network. s dic ion tiv More than 600,000 pieces of equipment are covered t ve Main e ec ti ten company by Konecranes service agreements. Konecranes can p en e an s v nc ce provide expert maintenance for any brand of equipment n re a I P en from any manufacturer. Lifecycle Care in Real Time t & in is our comprehensive and systematic approach to a M Everything we do is targeted maintenance; connecting data, machines and people. M Incorporating predictive maintenance elements as part of C & at one goal: improving the a o
i r the maintenance program can further optimize activities, n R r t s t e safety and productivity of our reduce unplanned downtime and improve equipment e n t e c t r e n safety, productivity and lifecycle value. Lifecycle Care r t
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solutions from light lifting equipment for workshops to & to a world-leading range of smart e large-scale process automation solutions, as well as N connected industrial cranes, container handling solutions for port operators. n lifting systems and container io M at Our motors, gears and controls are designed specifically for od ul s handling equipment. e s ce cranes and lifting motions. We also design the interaction S rni on vi e zation C er between the key components and the software specifically for rvic S lifting. This gives our cranes a longer lifetime and an excellent es functionality. We call this concept the Core of Lifting.
Optimized crane fleet management with our digital solutions To date, more than 19,000 cranes worldwide have remote connections with our TRUCONNECT remote monitoring Customers are able to view data on a single In addition to improving safety and reliability, remote center for optimized operation management in real time. asset or an entire fleet through the secure monitoring also has a profound impact on maintenance TRUCONNECT uses sensors and a diagnostic unit placed yourKONECRANES.com customer portal via mobile scheduling and planning. Replacing components when on the crane to collect usage and operating data such as phone, tablet or desktop connections – which means, they need to be replaced – not before and not after–saves running time, lifted loads, motor starts, work cycles and from virtually anywhere. money. Also, the ability to plan an outage, rather than emergency stops. respond to a breakdown, safeguards production goals and makes life easier for everyone.
Konecranes Annual Review 2018 4 Annual Review A technology company Financial Review Governance Sustainability Report
Orders by customer segments, 2018 Being close to our customers through local presence
Power Chemicals Mining 3% 1% Paper and forest 4%
4% Container handling Transportation equipment 30% 5% Metals production 7%
Construction and engineering 9%
Sales per region, 2018 Personnel per region, 2018
Distributors General manufacturing 10% 27% 16% 18% 20% 33%
AME 1,049.9 MEUR AME 3,172
50% EMEA 1,593.5 MEUR EMEA 10,027 62% APAC 512.7 MEUR APAC 2,878
Konecranes Annual Review 2018 5 Annual Review CEO's letter Financial Review Governance Sustainability Report
Dear shareholders, business also enjoyed growth towards the end of the year. From Our productized service offering performed very well. We “The cornerstones of Konecranes posted strong earnings in 2018, and as we increased product development and are very satisfied with start the new year I want to reflect on what has been an how these projects have been executed. our business remain our integration important period for the Group. I think the time is just right for this, as I have served as Konecranes’ CEO for three Underpinning all of this has been the rapid digitalization superior product offering, to growth years now, and Konecranes itself has also arrived at a of our business, which we think keeps us ahead of our digital capabilities, landmark, celebrating its 25th anniversary this year. our competitors and thus in excellent shape to seize future business opportunities as the era of the industrial and our excellent service We are certainly a very different company today than three internet begins. years ago. To begin with, our Service business has shown network.” growth and now has huge potential in its sights thanks These achievements show that our customers continue to to the acquisition of MHPS in 2017. We already started to believe in the cornerstones of our business: our superior reap the benefits of the additional installed base in 2018, product offering, our digital capabilities and our excellent but have only scratched the surface of the very exciting service network. business potential in Service, which we think will be a significant growth engine for Konecranes going forward. In short, we executed very well, with some significant milestones across the business. The year did not proceed without the need to make some But Service is just one example of the big steps we tough decisions, however. Efficiency measures were took as a company in 2018. We delivered EBITA margin Steady progress in integration necessary in three of our facilities to ensure the long-term improvement and record-breaking order growth. A major Our business performance was especially pleasing given the productivity of the Group. highlight in 2018 was our order from Abu Dhabi Terminals hard work done in integrating MHPS, with 2018 arguably the (ADT) for 54 Automated Rail Mounted Gantry (ARMG) most critical year in terms of delivering the benefits of the Before closing, it is important to note the good progress cranes. This represents a major system delivery and acquisition and meeting our commitment to shareholders. on our journey to make a positive impact on the was underwritten by the customer’s faith in our delivery One area where we took big strides was product environment, both by reducing our own footprint as well capabilities and, above all, our technology. We start 2019 harmonization, and during the year we were able to reduce as increasing our handprint. We have set new targets for with much higher orderbook than ever before. costs related to many of the products added to our portfolio our energy usage and emissions and taken further steps in through MHPS. embedding circular economy thinking within our industry. Also, Port Solutions’ underlying performance was The alignment of the sustainability and safety cultures of satisfactory. The lift truck business enjoyed great success Visiting our facilities around the world, I have been struck MHPS with those of Konecranes is well under way. in 2018, winning its largest-ever order when Toll Group by the energy, enthusiasm and dedication of the people I ordered over 40 lift trucks for their Australian operations. encounter. Individuals have taken on new responsibilities Looking ahead with the integration, discovering the chance to grow in their As we begin 2019 our demand environment still looks In Industrial Equipment, the component business posted careers. These are things we love to see, and we can repay healthy and stable despite macroeconomic concerns which double-digit growth in sales, and some larger projects this with opportunities to develop further. My warm thanks go are slowing decision making in certain customer sectors made the year quite successful. Our standard crane to each and every employee for their efforts so far. and countries like the UK, where activity has stagnated
Konecranes Annual Review 2018 6 Annual Review CEO's letter Financial Review Governance Sustainability Report
due to Brexit uncertainty. Outside the UK, the demand environment is still at a good level in many parts of Europe and North America, and in 2019 we expect to see faster sales growth and improved profitability. “2018 was a year of good execution, Indeed, thanks to the acquisition of MHPS Konecranes is now far stronger to face the challenges of 2019 and EBITA margin beyond. As we start to emerge from the integration improvement, and phase, we are ready to move forward decisively with the next steps of our strategy and adopt a greater role in the order growth.” material handling ecosystem of our customers. This start to our next 25 years as an independent company is both exciting and inspiring, and, as ever, we are grateful for your continued support along the way.
Panu Routila President & CEO
Konecranes Annual Review 2018 7 Annual Review Strategy Financial Review Governance Sustainability Report
Strategy VISION – WHAT WE WANT TO MISSION – WHAT WE DO ACHIEVE IN THE LONG TERM
We are not just lifting things, but entire businesses. We know in real time how millions of lifting devices perform. At Konecranes, we are not We use this knowledge around the clock to make our customers’ just lifting things, but entire operations safer and more productive. businesses. We have real-time knowledge of how millions STRATEGY – HOW WE GET THERE of lifting devices perform. TECHNOLOGY REAL TIME VISIBILITY TO END-TO-END SHARED & HARMONIZED We use this knowledge, LEADERSHIP CUSTOMERS’ EQUIPMENT PROFITABILITY PROCESSES around the clock, to make our customers’ operations safer SERVICE EQUIPMENT Lifecycle Care in Real Time Core of Lifting and more productive. 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
TACTICAL FOCUS AREAS – WHAT WE WILL FOCUS ON DURING THE NEXT 2–3 YEARS
GROWTH PROFITABILITY Customer experience Realizing potential
TECHNOLOGY PEOPLE Engineering Lifting people capabilities
VALUE PROPOSITION – BRAND PROMISE: LIFTING BUSINESSES™
Konecranes Annual Review 2018 8 Annual Review Strategy Financial Review Governance Sustainability Report
The way forward digitalization actions can help us to gain new business, as Fundamental changes are taking place in material handling well as increase our cost efficiency. Software will also play Fundamental changes in factories and ports, and the next level of communication an increasingly important part in our portfolio. are taking place in for machines in these sectors is approaching. As we proceed, we will place increased strategic focus on the crane Real-time visibility of material handling, as part of the entire material handling ecosystem. customers’ equipment A real-time view over the operation and maintenance of and the next level We are, in fact, already present in this expanded area. our products is one of Konecranes’ key strategic assets. We Examples include our lift trucks for both ports and enable transparency over the customer’s entire operations, of communication industrial clients, our offering in automatic warehouse and can make timely recommendations for productivity and management, our automated guided vehicles for safety improvements based on on-board data acquisition for machines is maneuvering large containers in ports, and our monorail and KPI calculation capabilities. These attributes will systems employing overhead rails to transport materials certainly increase in importance over time. approaching. within factories, e.g. in the automobile industry. Connectivity with service technicians is an established Growth geographies are another megatrend we are benefit of IoT, allowing for remote maintenance through a responding to, strengthening our market position in dedicated and secured system. The Konecranes data cloud China as well as the APAC region. We will continue to with analytics is also a critical component for strategic pursue commercial excellence, while ensuring that our development, providing sales leads and enabling co- manufacturing operations remain competitive in the face creation projects with our R&D Remote Center. of unpredictable macroeconomic conditions. End-to-end profitability Technology leadership Preserving the competitiveness of our manufacturing We see the future of our offering in terms of its readiness operations is of critical importance as we respond to a for Industry 4.0 and its strong potential for integration into highly volatile and complex macroeconomic situation, the wider ecosystem of our customers’ operations. As a as well as the trend of consolidation and clustering in trend, intelligence will expand to lighter devices from heavy industries such as the port sector. Our approach to such process equipment, while we will enjoy economies of scale uncertainty is a comprehensive focus on profitability that due to our ability to capitalize on introducing common underpins all of our actions. technologies across the entire portfolio. Shared and harmonized processes Digitalization plays a key role here, both in terms of We will continue to streamline our recently integrated platforms Konecranes placing more emphasis on digital operations to realize technological synergies and cost efficiencies. in our equipment and service offerings, and in our ways Development of our processes will enable growth, innovation of working. We will highlight a number of areas in which and operational efficiency in the future.
Konecranes Annual Review 2018 9 Annual Review Financial Review Governance Sustainability Report
Market review
The demand for Konecranes’ products and services are driven by market conditions in the manufacturing industry, including the general manufacturing, metal production, power generation, automotive, pulp and paper, raw materials, and chemical industries, and container transportation industry. Investment in new lifting equipment is cyclical and varies across different industries depending on the economic environment for that industry.
Konecranes Annual Review 2018 10 Annual Review Markets and business areas Financial Review Governance Sustainability Report
In the Eurozone, after a long period of rapid growth in In Brazil, manufacturing operating conditions improved Market economic activity the pace of expansion slowed down in the second half of 2018 following a decline during in 2018. Though the manufacturing economy’s current the first half of the year. In India, the growth of the run of expansion extends to five-and-a-half years, the manufacturing sector picked up during the second half, review growth in December was the weakest since February and the nation posted the highest quarterly average PMI 2016. At the end of 2018, softness in new orders was since 2012. behind the slowdown in overall growth. At the end of 2018, slower growth was widespread and the Eurozone’s Activity in the world’s ‘big-four’ economies posted the lowest manufacturing manufacturing sector, according PMI readings. The Netherlands was the top performer in After setting an all-time the Euro area and the rate of expansion improved to its to the aggregated JPMorgan best in three months. The European Union manufacturing high in early 2018, global Global Manufacturing Purchasing capacity utilization decreased slightly during the second half of 2018. Outside the Eurozone, the UK container throughput Managers’ Index (PMI), manufacturing sector continued to grow, though the turned to a decline. The continued to grow in 2018, average PMI reading during the fourth quarter in 2018 was the weakest since the third quarter in 2016 (the first index has since increased although the pace of growth has quarter after the EU referendum). slowed down clearly since the and reached a new record In the US, the manufacturing sector’s growth slowed beginning of the year. The PMI down in 2018 compared to the previous year-end. in October. In December 2018, the improvement in operating declined and fell to a 27-month conditions was the weakest in 15 months, however low in December 2018 but still clearly above the manufacturing sector’s PMI in the Eurozone. Correspondingly, the US manufacturing After setting an all-time high in early 2018, global remains on an expansion path. capacity utilization rate declined in the fourth quarter. container throughput turned to a decline. The index has Overall, business sentiment Also, business confidence was low at the end of the year; since increased and reached a new record in October. optimism among purchasing managers was at its lowest In January-December 2018, global container throughput has worsened due to growing for over two years in December 2018. increased by approximately 4 percent year-over-year. geopolitical worries. As for the emerging markets, in China, the PMI dropped Regarding raw material prices, both steel and copper in 2018 and fell into contraction territory at the end of were clearly below the previous year’s level at the end of the year. Russia stabilized at the end of the third quarter December 2018. The 2018 average EUR/USD exchange after a four-month sequence of contraction and the PMI rate was approximately 4 percent higher compared to the turned to growth during the last quarter of the year. year-ago period.
Konecranes Annual Review 2018 11 Annual Review Markets and business areas Financial Review Governance Sustainability Report
Our business Service Industrial Equipment Port Solutions
Business Area Service improves the safety and Business Area Industrial Equipment serves Business Area Port Solutions has the widest areas productivity of our customers’ operations. From general manufacturing, and various process and deepest offering in container handling, a single piece of equipment to entire operations, industries with industrial cranes. We also provide shipyard handling and mobile handling in we provide specialized maintenance services crane components and lifting equipment solutions harbors. It includes a full range of software and spare parts for all types and makes of to other crane manufacturers and distributors. and services. industrial cranes and hoists. The business area includes the brands Konecranes is a global leader Konecranes, Demag, SWF Krantechnik, Verlinde, in industrial lifting and port R&M and Donati. solutions with a strong service offering.
Service Industrial Equipment Port Solutions
2018 2017 2016*) 2018 2017 2016*) 2018 2017 2016*) Orders received, Orders received, Orders received, MEUR 986.5 966.3 981.4 MEUR 1,248.9 1,127.3 1,148.9 MEUR 1,096.0 1,056.2 1,045.2 Order book at end Order book at end Order book at end of period, MEUR 214.3 196.0 200.3 of period, MEUR 590.6 526.9 540.9 of period, MEUR 910.5 812.9 766.4 Net sales, MEUR 1,192.5 1,179.5 1,214.1 Net sales, MEUR 1,150.9 1,118.2 1,130.8 Net sales, MEUR 1,012.9 975.7 1,091.4 Adjusted EBITA, Adjusted EBITA, Adjusted EBITA, MEUR 180.0 161.3 153.4 MEUR 42.6 34.6 -6.1 MEUR 71.3 44.8 52.7 Adjusted EBITA, % 15.1 13.7 12.6 Adjusted EBITA, % 3,7 3.1 -0.5 Adjusted EBITA, % 7.0 4.6 4.8 Operating profit Operating profit Operating profit (EBIT), MEUR 162.8 139.7 (EBIT), MEUR 15.1 -4.0 (EBIT), MEUR 40.0 11.7 Operating margin Operating margin Operating margin (EBIT), % 13.6 11.8 (EBIT), % 1.3 -0.4 (EBIT), % 4.0 1.2 Personnel at the Personnel at the Personnel at the end of period 7, 372 7,20 6 end of period 5,782 6,024 end of period 2,830 3,067
*) Comparable combined company figures.
Konecranes Annual Review 2018 12 Annual Review Markets and business areas Financial Review Governance Sustainability Report
“Each of our Business Service Industrial Equipment Port Solutions Areas plans and acts to achieve a culture of Key developments in 2018 Key developments in 2018 Key developments in 2018 In 2018, Business Area Service made good In 2018 the defined go-to-market strategy for Business Area Port Solutions experienced profitability, growth and on its promise to realize growth and gain Demag and other Konecranes operations were moderate order intake growth in 2018 with profitability from the ongoing digital and fully taken into use. During the year, the new increased activity in Europe and North America. people excellence. To business transformation and MHPS integration combined supply and factory network was also The integration plan was successfully carried synergies. There was solid progress in delivering built, causing changes in our factory network. In out, resulting in a wider and deeper product this end, Konecranes increased operational efficiency, diligent cost accordance with the original planning, the work and system offering. A harmonized product leadership has the job control and an improved customer experience. continues in 2019 to further streamline operations. portfolio and growth in global container handling led to increased opportunities for of enabling engaged Growth in all regions and key While brand-specific offering continues as the cross-promotional sales. industrial segments leading concept, several lower component-level and committed Growth was evident in all regions and across changes were made to products in order to gain A growing number of customers made several key industrial segments compared to scale benefits. These new products were launched investments in automation, in both existing employees.” previous years. In 2018, EMEA and AME saw and are providing additional cost savings. brownfield and greenfield locations. This accelerating growth during the year and APAC contributed to better results than last year, with performed relatively well. Integration efforts caused little to no impact to full year net sales up by 3.8% and adjusted - Panu Routila, customers, and planned synergies are being EBITA up by 59.4% over 2017. Konecranes President and CEO Megatrends continue to support Service growth realized. All in all, the year was a successful one worldwide including the increasing importance for the business area. Innovating for growth of safety and productivity gains, expanding This was an important year for innovation regulations and compliance requirements, Increased profitability in 2018 in Port Solutions, with the launch of the alongside outsourcing and digitalization. Profitability for the business area continued to Automated BOXPORTER RMG System and the improve overall. The above integration efforts Automated RTG System Version 2.0. In October, By staying true to our core values, while at the caused some additional operational costs during the business area received Konecranes’ second same time adjusting our offering and business the year. The financial results continued to develop largest order ever, from Abu Dhabi Terminals. model, we have brought mutual benefits to our positively. Across all main industrial equipment Earlier in the year, the business area launched bottom line and to our customers’ operations. customer segments, demand continued to be fairly the world’s first hybrid reach stacker for strong, with some geographical differences. container handling.
Konecranes Annual Review 2018 13 Annual Review Research and technology Financial Review Governance Sustainability Report
Konecranes has a track record of industry-shaping start-ups and our partnership with Maria 01, the Nordics’ We see products Building innovations spanning over a century. These innovations leading start-up hub. are protected by patents and other applicable becoming increasingly registrations, and today Konecranes has the industry’s The purpose of the Konecranes REACH Program is to industrial largest patent portfolio. To secure our position and shorten time to market for new solutions that help us serve smarter, being able continue providing unique offerings, Konecranes has our customers better. In 2018, the REACH Program looked capabilities for started to define a new digital strategy and kicked off for new ways to apply AI and analytics in field service, to sense not just their several R&D projects to identify how applicable emerging to digitalize ports, make container logistics smarter, and technologies are impacting the material handling industry. improve human-machine interaction. own status but also tomorrow Our position as the biggest player in the lifting industry allows our technology platforms to scale up and capitalize Technologies change the way the environment they on resulting economics. products and services are designed operate in. Emerging technologies impact the way new products and The material handling industry To keep up with the speed of industry changes and services are designed. These technologies will enable technology development, Konecranes has partnered with us, for instance, to offer cranes that are continuously stands on the brink of a industrial ecosystems such as DIMECC and Combient, and improving by developing machine-learning algorithms and technological revolution that increased collaboration with universities in China, Finland, deploying them to our products. Germany and India. In addition, Konecranes is adapting will blur the lines between the lean customer-centric design and development practices to We see products becoming increasingly smarter, being physical and digital spheres. create new products and services. able to sense not just their own status but also the environment they operate in. Ultimately these products We can already see how Industry 4.0 is not possible without implementing the latest become autonomous in performing operations that are emerging technologies like AI, communication standards. Konecranes participates in the required of them. definition of the new machine-to-machine communication advanced wireless networks or interface standard, based on OPC UA for industrial cranes, Konecranes is piloting microservices and container fully autonomous vehicles are in accordance with the European Material Handling technologies-based product design, which enables Federation (FEM) and German Machine Manufacturer product enhancements after the equipment is delivered disrupting our thinking on what Association (VDMA). This standard will guide product to customers. This design has already been piloted with design and enable us to benefit from an application process cranes and lift trucks, enabling software updates to is possible and what is not. ecosystem which is likely to develop once the standardized increase efficiency, safety and productivity. data models and interfaces are put into effect. The newly launched Automated Rubber Tired Gantry Konecranes launches (ARTG) system version 2.0 is equipped with the latest its own start-up program wireless communication technology; control signals and The most visible parts of Konecranes’ start-up video signals are now wireless. This means that the ARTGs collaboration are the Konecranes REACH Program for can be diesel-powered and there is no need for cable reels
Konecranes Annual Review 2018 14 Annual Review Research and technology Financial Review Governance Sustainability Report
and fiber optics. Truck handling is automated, with remote Many technologies are impacting our industry supervision. The Konecranes ARTG system version 2.0 will be instrumental in driving the evolution of RTG-based container terminals to fully automated operation. The research Konecranes does with 5G and NB-IoT supports Autonomous, cooperating industrial robots this objective. 1. Advanced Robots Numerous integrated sensors and standardized interfaces Our customers can make better choices for the environment without compromising the performance and 2. Additive 3D printing, particularly for spare parts, prototypes and production tools power of their machines. Thus, Konecranes has launched Manufacturing Decentralized 3D facilities to reduce transport distances and inventory ECOLIFTING for lift trucks, a concept that comprises three driveline solutions for lift trucks: Power Drive, offering 3. Augmented Augmented reality for maintenance, logistics, remote control, training, etc. up to 15% fuel savings; Flow Drive, with up to 25% fuel Reality Display of supporting information, e.g., through AR glasses savings; and the pioneering Hybrid Drive, offering up to 40% fuel savings. 4. Simulation Simulation of value networks Optimization based on real-time data from intelligent systems Agilon®, Konecranes’ multi-award-winning material handling solution, is a great example of applying existing solutions 5. Horizontal/ Cross-company data integration based on data transfer standards to new markets. In addition to industrial markets, Agilon is Vertical Integration Precondition for a fully automated value chain now used in both indoor and outdoor retail settings as Pick & Go stations to replace parcel lockers. 6. Industrial Network of machines and products Integration of global business processes Internet Multidirectional communication between networked objects and IT systems proceeding as planned Management of huge data volumes in open systems Konecranes’ internal digitalization and the MHPS 7. Cloud integration are proceeding as planned. The majority of the Real-time communication for production systems business units are now using global IT systems. Common oneKONECRANES processes and systems will provide Operation in networks and open systems 8. Cyber-security Konecranes with a 360° view on customers, real-time High level of networking between intelligent machines, products, and systems visibility to demand and supply, higher scalability and lower transactional costs. These will be key enablers for Full evaluation of available data (e.g., from ERP, SCM, MES, CRM, and machine data) 9. Analytics Konecranes’ future growth. Real-time decision-making support and optimization
Konecranes Annual Review 2018 15 Annual Review Financial Review Governance Sustainability Report
Corporate responsibility
We believe that sustainable growth results from strong, responsible performance. We strive to improve our products, processes and services continuously and deliver on our commitments through concrete actions. Our objective is to bring value to our people, the environment and the societies where we operate while pursuing our mission to lift our customers’ businesses.
Konecranes Annual Review 2018 16 Annual Review How we make an impact Financial Review Governance Sustainability Report
How we make e strive to ma imize the positive impact we bring to society an impact and reduce our negative impacts ision
sion Safety inancial gro th Mis mproving safety on all levels onecranes will continue to generate growth Safe products, services and operations are and profitability, remaining competitive in a seen as an opportunity to create value constantly changing marketplace. Our position as a preferred partner creates financial stability Industry 4. Consistent performance both for us and for our value chain. Automated and Product performance, uality and H P REA integrated solutions S reliability ER unlock new levels of D M A E rustworthy service, ma imizing uptime se of innovative technologies E efficiency Product and service optimization e help our customers develop world-class S Constant development of skills and operational performance by optimizing their O P OR knowledge material handling flows, making lifting devices O T lobalization N S O intelligent and connected, and designing their H E geopolitics C C L underlying hardware to meet the specific E I U Resource efficiency and ncertainty in political V T demands of the material handling industry. R I responsible supply chain O and economic shifts E N S Eco-efficient product design
S affect trade patterns