The year saw it make the two largest acquisitions in its history, with the purchase of Stahl CraneSystems at the end of 2005 and MMH Holding Inc in May 2006. These acquisitions contributed considerably to growth in net sales, orders and profits.
Demand for Konecranes’ products and services increased over the year, as it expanded and consolidated its industrial output, while port investments and customers’ outsourcing of crane maintenance continued to grow. Demand improved in almost all market segments, with harbours, primary metals, power and petrochemicals showing particularly strong growth, reported the company.
Demand also grew in all geographic markets, most strongly in Germany and the USA, though emerging markets such as China and Russia also performed well. In total, Konecranes received orders worth €1.47bn (US$1.06bn) in 2006. This was an increase of 38.8% on the previous year, of which 13.8% was organic (i.e. not due to acquisitions).
“2006 was very promising for Konecranes. We enjoyed a unique combination of three dynamic factors – extremely strong growth, improving operating margins and high capital returns,” said Pekka Lundmark, the company’s president and CEO.
“It would not be realistic to expect that the very fast organic growth we have seen during the past two years will continue at the same pace. However, we do expect organic growth to continue in the coming years. At the same time, we are confident that the 7.1% operating margin achieved in 2006 can be further improved. That is why we have set new operating margin targets for each business area [that] would result in a Group margin of approximately 10%.”