Marko Tulokas: Well, thank you, Roosa, and good afternoon, everybody. As Roosa was already saying, today we are going to be a bit shorter than usual. I will also start, as usual, by focusing on the key points of the quarter for Konecranes. A very significant milestone was that we updated our financial targets in the quarter. That includes our dividend policy, as well as our capital allocation and long-term climate ambitions. Looking at the quarter, I would categorize it as a great quarter for Konecranes. Our demand activity continued strong, particularly within the Port Solutions business and on the industrial side. This particular quarter, the weight was specifically on general manufacturing, power, and mining segments. However, as it is, particularly in the Port Solutions business, the order intake has some volatility, and it is somewhat difficult to predict the order intake timing, and that also happened in Q3.
Marko Tulokas: Even though we have a lot of activity in the funnel, our order intake in the Port Solutions was somewhat muted, and that meant that we also fell short of last year’s Q3 in terms of order intake. I am very happy about the quarter, particularly when it comes to the delivery performance, and that is also thanks mainly to Port Solutions, where we caught up very nicely after a somewhat slow H1. As we discussed in the Q2 report, that was very much as planned, and that was what we saw already in the annual plans this day. That is just the timing of the Port Solutions’ deliveries for this year. So very good delivery performance on the Q3 of the year.
Marko Tulokas: That also meant that we had an excellent result, and that was driven by volume as well as the solid performance. I will move on to the actual numbers now. Orders were really down due to Port Solutions, but we had some growth in industrial equipment and industrial service. Particularly, we had a very good mix on all three business areas when it comes to the order intake. Our sales grew 10% on comparable currencies compared to last year's Q3. We caught up very well as planned. Also, the service business started to improve the delivery performance in Q3. That also meant that our order book continued to strengthen. Our profitability was very good, although not quite as nice as the record-breaking 2025.
Marko Tulokas: We had 15.6 on Q3 of this year, which we consider to be a very good achievement from the team. The decrease in relative terms of the margin was mainly driven by higher positive one-offs in the comparison period. Our underlying performance, generally speaking, was strong. As already said, order intake not really as strong as the previous year quarter, but particularly because of Port Solutions timing of orders. We saw increase in industrial service and increase in industrial equipment, and increase in the EMEA region, but decrease in the Americas and APAC. Again, in Americas, particularly driven by the Port Solutions timing of orders. Our deliveries improved in all regions. Our Port Solutions and industrial equipment factories performed very well, so we had no major supply issues.
Marko Tulokas: The only remaining issue, particularly on the industrial equipment side, is that the customer acceptance issue still exists, although we do see some improvement in those also. Now, I will move on to Konecranes' updated financial targets, which do reflect our increased ambitions. This is for those who are not maybe listening later to our Capital Markets Day 2026 presentation today. We revised our strategic ambition as well as our targets, and as well as increase our targets. This reflects our confidence in our operating model, the performance that we have seen in the last years, as well as our mid to long-term opportunities that we see in the marketplace. We set an absolute growth target at 7% for the Konecranes group, as well as 7% for industrial service and Port Solutions. Industrial equipment, 6%.
Marko Tulokas: The main reason for that is that in that particular business, we have some areas or some business lines where we are somewhat more selective still than maybe in the others, and that is why the industrial equipment is slightly lower target. The same we did for the profitability target. We have had good progress in our efficiency, in our margin development in general. We were well in the range of the previously set targets. Although we have not really seen a downturn yet, we are also confident that our ability to grow, the efficiencies that we have built into our model, our renewed product offering and the efficiency of that, as well as the runway of improvement potential is all there.
Marko Tulokas: Therefore, we are confident to say that apart from a global unforeseen shock or crisis, we believe that we can perform in a normal downturn so that by 2030, we are in that range of 15% to 17% on group level. I am very happy personally, as well as committed, as is the whole Konecranes team, to these new targets. That is a very inspiring and an important thing for all of us. Now we are going to move on to the financials. Teo will join me on the stage for that.
Teo Ottola: Thank you. Thank you, Marko. Let us continue to the profitability side more in detail. Like Marko already pointed out, the EBITA margin for the quarter was very good, 15.6%, but still about 1.1 percentage points lower than in the exceptional good Q3 of 2025. We did improve in Port Solutions as well as in Service, but there was a decline in Industrial Equipment. When we take a look at it from the group perspective, like Marko pointed out regarding the one-off, we actually had positive one-offs in this quarter, roughly in the amount of EUR 8 million as a result of tariff refunds in the US. But we actually had maybe EUR 10 to 15 million one-offs in the third quarter of last year, so a larger number, and those were positive as well.
Teo Ottola: If we back out both of these from Q3 this year and Q3 last year, we are looking at the negative margin difference of roughly half a percentage point. Excluding the one-offs, the difference is not as big, but it is still a negative in Q3 this year versus the year before. This negative half a percentage point roughly comes from the mix, and then also, to some extent from, let us say, operational issues in comparison to the situation a year ago. Maybe we can take a look at that more in detail with the help of the bridge on the right-hand side. Despite the decline in the EBITA margin, the euros, EBIT euros actually rose to EUR 172 million.
Teo Ottola: When we take a look at pricing, that was maybe 2.5%, maybe a little bit more in a year-on-year comparison, which leaves us about 7%, 7.5% underlying volume improvement. This obviously creates a very nice operating leverage positive contribution to the result. Net of inflation pricing was on the positive, but very little, so no meaningful impact there. Then, like I said, the mix was negative, and then also the performance was negative, partially as a result of lower positive one-offs and partially as a result of operational issues, particularly in the Industrial Equipment. Fixed cost actually rose by EUR 5 million, but this is basically inflation, not much more. Not really anything else. Then, for a change, we have an FX translation impact slightly on the positive side. So very good underlying volume. No meaningful impact from the net of inflation pricing.
Teo Ottola: Negative mix, negative performance as a result of one-offs and operational topics. Those basically explain the profit difference between these two quarters. Just a couple of comments, few comments for each BA, starting with service. Here, order intake 1.2% higher than a year ago with comparable currencies. It is a bit unfair comparison this time, as we had a very good number of modernizations in Q3 2025. If we excluded those, we are looking at 5% plus growth actually within the field service and spare parts, which is on a good level. Regarding sales, 2.4% growth in a year-on-year comparison. There is a small technical topic here as well. We have moved one unit from service to Port Solutions, as a result of which service is selling less internally.
Teo Ottola: If we were to exclude this one, we would be taking a look at roughly 4% growth in sales year-on-year. So a pickup in the sales like Marko Tulokas already explained. You can, by the way, see the other end of this internal sales as lower group internal sales in Q3 this year versus Q3 last year. Taking a look at the industrial equipment. There maybe focusing on the sales. We have a decline in sales by roughly one percentage point in comparable currencies. We have had a little bit, let us say, delivery delays. These have been primarily as a result of the customer delays, but there also have been issues that are originating from our own business and own doing. These then have been visible also in the margin.
Teo Ottola: As a result of lower volume, obviously the fixed cost absorption has been on a lower level than what it was a year ago. We have had a little bit cost overruns, as well there. On top of that, also the lower positive one-offs this year versus last year is visible in the industrial equipment margin as well. Of course, 10.9 is by no means a weak margin, but of course, again, when you take a look at the more than 14 one year ago, it was exceptionally good. Then Port Solutions, and there we obviously have a decline in the order intake as a result of the timing. Taking a look at the underlying activity in the ports business, that continues to be good. We had good orders in port service lift trucks as well.
Teo Ottola: But of course, the timing of the bigger orders is something that is impacting the number quite a bit. On the other hand, timing was now better for sales. We have almost 30% growth in sales in a year-on-year comparison, which is then, of course, also visible in the EBITA margin. Margin is improving, but only by 0.2 percentage points. So with this high volume that may be considered, let us say not a very big improvement. But at the same time, we need to remember that the mix is of course now much weaker from the margin point of view than what it was a year ago. Also within ports, the quarter last year was operationally very clean, solid, and good. Finally from my point of view, a couple of comments on the balance sheet net working capital to start with that one.
Teo Ottola: Networking capital did not really increase from the level of Q2, but it did not really decrease either. The work in progress continues to be on a high level. There is nothing extraordinary, so there are no deviations in the commercial terms or anything. This is probably mostly a timing topic, but it is of course true that we are slightly on the wrong side of the target of 10% of rolling 12-month sales. Like I said, nothing extraordinary in this or behind this number. From the cash flow point of view, Q3 was better than the previous quarters as a result of the net working capital development. We have now, at the end of Q3, a net cash position of roughly EUR 100 million total. With these comments, I will hand over back to Marko.
Marko Tulokas: Thank you, Teo. I will use a couple of slides again to iterate the demand outlook. Our demand outlook in itself is unchanged. Within the industrial customer segment, we expect the demand environment to remain on a healthy level. As you saw from my first or heard from my first slide comments about the quarter highlights, this time we had quite a lot of activity in general manufacturing and mining on top of the power and aviation defense earlier. That is just a sign that what is part of the Konecranes model strength is we cater to so many industrial customer segments that we see also positive signs and rotation that helps us to naturally hedge the demand environment. At this time, we also saw improvement into other segments compared to the previous ones, which is a good thing, generally speaking.
Marko Tulokas: For our Port Solutions customers, the container throughput continues to be on a very high level. As we have several times already said today, besides the longer terms prospects remaining good, we also have good customer funnel activity. As it is always said, the uncertainty today, whether it is related to geopolitics, trade policy tensions, or to the nature of the Port Solutions business volatility in order intake, that still remains. Of course, that creates the usual, if not even more challenges today in terms of the timing and predicting the order intake. Demand outlook in general remains unchanged. As it comes to our financial guidance, we iterate our financial guidance and our sales to remain at the same level to increase and our EBITA to remain at the same level. We remain confident thanks to our good order book and stable profitability development.
Marko Tulokas: Of course, as I said earlier also, it is realistic to say that there is uncertainty in the environment, but we remain confident nevertheless. With that, I would like to thank you all for this short Q3 webcast. I welcome also Roosa back on stage for the question and answers.
Ruusa Vallin: Yes. Thank you, Marko and Teo for the presentations. It is time for the Q&A, and I would like to remind everyone that let's now focus on Q3 in this webcast and continue with the strategy topics later on this afternoon. Operator, please open the lines.
Operator: If you wish to ask a question, please dial pound key 5 on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key 6 on your telephone keypad. The next question comes from Daniela Costa from Goldman Sachs. Please go ahead.
Daniela Costa: Hi. Good morning. Thanks for taking the questions. I have two questions, and they both relate to service, so I will ask them in one go. First, I guess the margin today is quite record high compared to past. Can you separate from this? Is any of the concentration of the one-off maybe tariffs in there, or something else that you would say it's not sustainable, we shouldn't think about this, has a doable level of margins going forward on a more continuous basis? Second, also on service, I believe in last couple of quarters, you were running a little bit ahead of your desired levels in terms of churn on the service installed base. Just wondering how that's been progressing. Thank you.
Marko Tulokas: Yeah. Maybe since we had that margin question. You forgot to, by the way, mention about the good service margin in your presentation. Now is your chance to iterate that.
Teo Ottola: Now is the chance.
Marko Tulokas: Yeah.
Teo Ottola: The margin indeed is a good one. But the question is a good one as well because there is, to some extent, one-off impact there as well. So part of the tariff refunds is in service. A small part, something probably between 1 and 1.5 million, is allocated or is within service.
Teo Ottola: Other than that, there are no major one-offs one way or the other in the service profitability.
Marko Tulokas: Again, Daniela, to your second question, the churn, right?
Daniela Costa: Yes.
Marko Tulokas: And by that, do you mean the attrition rate
Daniela Costa: Exactly
Marko Tulokas: in the service contracts? Yes, our target is, we normally target roughly 90% level, and we are well on our way. We have actually improved in the agreement-based attrition. There is nothing unusual in that as such that we see today. So it is as planned, as expected.
Daniela Costa: You are in that level now, because I believe you were a bit ahead of that in the last quarter?
Marko Tulokas: No, we are actually, if I recall correctly, I do not have the numbers, 88% level, 87%, very close to that. So not really big change there.
Teo Ottola: We have been saying that the targeted level would be to be above 90.
Marko Tulokas: Yes
Teo Ottola: 90 or above. Now, for the past quarters, we have been on a little bit weaker level. There may be somewhere 86, 88, like Marko noted. No significant change now in Q3 in comparison to Q2.
Daniela Costa: Got it. Thank you.
Operator: The next question comes from Panu Lehtmäki from Danske Bank. Please go ahead.
Panu Laitinmäki: Yeah. Thanks. I have three questions. Continuing on the service topic, the growth picked up from previous quarters. What are your expectations going forward? Is this a return to better growth, or was this a one-quarter, or what do you expect?
Marko Tulokas: As Teo was already dissecting the service growth, of course, just to iterate that for everybody's sake, particularly last year, we had the maybe unusual high number of modernizations for a quarter, which was not the case this one. Then the underlying service, field service, and parts order intake was good. On the order intake side, sales is, of course, in service it follows quite closely. That is an encouraging development. What we said about the market environment, it has been somewhat challenging in service in general when it comes to customers' willingness and ability to take on service work. There are some cautious signs of improvement there. Therefore, there is reason to be cautiously optimistic about the service development going forward. As you know, we guide on individual BA order intake forecast as such.
Teo Ottola: Maybe we could take here one discussion topic regarding the overall market environment because this is something that we have been discussing every now and then, not only service-related, also industrial equipment-related. Now what we have been seeing is maybe a little bit more positive sentiment to some extent. The number of new cases
Marko Tulokas: Yeah
Teo Ottola: that are coming to the funnel. This is rather going up than down. The decision-making times are unfortunately still quite long, but there is more material coming to the funnel. The funnels, of course, they continue to be in good shape. Then when we take a look at the connected equipment.
Teo Ottola: The usage of those connected equipment is not up year on year.
Marko Tulokas: Yeah.
Teo Ottola: If there is a deviation, it is rather a little bit to the worst. This is a little bit similar as it was towards the end of Q2. Not all of the signals are pointing in the same direction.
Teo Ottola: Unfortunately, we will need to repeat that same message that we said at the end of Q2 as well. It is a little bit unclear where the overall environment is there.
Marko Tulokas: Particularly mixed also between the equipment investment and the service activity. There are different fact-based, but also less fact-based assumptions of why that actually is. Just on that activity on the customer side, when we measure with our remote connections, actually it was up in September. That is more to do with the fact that we had the, of course, coming out of the holiday period sequentially.
Panu Laitinmäki: Thank you. You partly already answered my second question. I was going to ask about industrial equipment. You now mentioned data centers and talked more positively about the power. Is this a meaningful acceleration in both segments that makes you more optimistic there?
Marko Tulokas: Well, we look at the power generation specifically. We believe, of course, that it is both directly and indirectly. Of course, it drives demand first in the equipment, eventually in service over time. Of course, the service, there is quite a big delay when those new investments actually turn into service work. For power generation in general, all other users or ways of generating power except solar power actually consume different sizes of cranes. In general, there is a bigger demand for power generation capacity than that reflects into lifting equipment needs. That is one source for demand and order intake in Americas, but also in EMEA in the last months and also visible in our funnel.
Panu Laitinmäki: Okay, thanks. Just finally, on the industrial equipment deliveries or delays, the revenue has not grown as much as the orders lately. When do you expect this to improve in Q4, or will it take longer?
Marko Tulokas: Well, Teo was mentioning that, well, okay, if I address the order intake topic and the discrepancy, the book-to-bill ratio discrepancy. Of course, in industrial equipment, we have different types of products with lead times from roughly 3 months all the way to 2 years. Of course, when we have those bigger orders, they tend to take a longer time to realize. That is not as is in service. It is not as clear the connection between order intake and sales. But industrial equipment, let us say, delivery challenges, it is nothing to do with our own factories. Actually our factories perform very well, so we have very little actual supply chain issues at the moment. We have, and what Teo was mentioning, we have some internally borne issues in industrial equipment that are more related to handling of the orders.
Ruusa Vallin: That is a mid- or short-term challenge that we are well in our way of realizing, partly driven by the strong activity in industrial equipment that we have to get our processing of orders in the same speed. That is more a question that should not take too long to recover. The customer-borne slowness, which is related to the customer's ability to receive the equipment, either because they do not have the need for that equipment, hence they postpone the order that they have already placed, or because they are not ready to receive at the site, which is often to do with the slowness of the construction or other equipment that would be for supply chain-related reasons late.
Marko Tulokas: That is something that is not so much in our own hands, and of course, we can help the customer to realize, and we can do certain actions to speed up the handover, but that is something that is more customer-borne thing. It is more difficult to predict when that actually rectifies or corrects itself, that situation.
Panu Laitinmäki: All right.
Marko Tulokas: Hope-
Panu Laitinmäki: Thank you. That is all from me.
Marko Tulokas: Hopefully, Panu, that answered your questions.
Panu Laitinmäki: Yes
Marko Tulokas: Adequately.
Panu Laitinmäki: It definitely did. Thanks.
Operator: As a reminder, if you wish to ask a question, please dial pound, key 5 on your telephone keypad. The next question comes from Antti Kansanen from SEB. Please go ahead.
Antti Kansanen: Hi, guys. Couple of follow-ups on the previous topic from me as well. I will start with the tariff refund. Teo, you mentioned how much was in the services side, so how was the rest of it split between segments?
Teo Ottola: Industrial equipment is the biggest, roughly EUR 4 million, and then Port Solutions is about EUR 2 million, and then service a little bit, maybe a bit more than EUR 2 million, and then service a bit more than EUR 1 million. That gives roughly the 8.
Antti Kansanen: Okay. That is clear. The second topic is maybe coming back to the growth on the services side, and I mean, after Q2, there was a bit of a discussion on why the growth on sales was kind of lacking the agreement-based and order side, and there was a bit of a mixed signals back then why the agreement-based customers are not taking in kind of service work. Would you like to return to that topic? I mean, it is obviously some improvement on the Q3, so are we any wiser on what is happening in there?
Marko Tulokas: Well, maybe somewhat wiser, and of course, you saw from the speed that we were able to realize that environment has certainly improved to some extent. But as Teo was saying, it is true that one can see that the actual activity, the manufacturing capacity activity, the capitalization of customers has not really significantly improved, although there are some slow signs. And of course, we do our own work to accelerate our sales activity and to sell more to those customers. It is a little bit and partly due to our own activity level also, and that we have, of course, actively done. But the rest is up to the customers, and there is only somewhat smaller changes at the moment. On the other hand, like we said in the Q2, this is the type of thing that eventually the customer has to do, so it is more of
Antti Kansanen: Yeah
Marko Tulokas: a question of time.
Teo Ottola: Maybe one can add to that. So that actually the agreement-based invoicing was more or less in line with what it should be in this quarter. I mean, the thing that we discussed previously did not repeat itself, but maybe there is some catch up to be done from the previous quarter still to that, so that it did not rectify all of the
Teo Ottola: let's say, gap that we had earlier. But then, like we have been discussing also in connection to Q2, of course, the bigger thing was that the discrepancy between order intake and sales
Marko Tulokas: Yeah
Teo Ottola: was that we were just building order book for service as well.
Marko Tulokas: Yeah.
Teo Ottola: As a result, for example, the product mix that we had, so replacement orders that we have got in the service business. The order book did not really move significantly from Q2 to Q3, which is also then visible in the sales, and this 4%, excluding the technical items, is roughly there where it on a quarterly basis maybe should be. But some catch up to be done from the previous quarters.
Antti Kansanen: Okay. I will squeeze in one more. I mean, coming back to the overall industrial demand, maybe to better understand, how narrow is the strong demand that you are seeing on the industrial equipment side? What I am trying to get here is that we have PMIs going up, but is it a few industries that are doing extremely well? You are flagging power. Defense is probably one, but then there are a multitude of things, especially in Europe, that are structurally struggling, automotive, forestry, things like that, and those are much more represented in your agreement and service base, and that is holding back. Would you think that is giving you these mixed signals?
Marko Tulokas: Yeah, if you want to have more the service angle here, I understand in your question still as it comes to the
Antti Kansanen: Yeah.
Marko Tulokas: Of course, with your experience, you are reading the situation well. Of course, what I was saying earlier about the activity on equipment side, that was, of course, applicable for both of the business area, service and equipment, but it is particularly visible first in the industrial equipment when there is improving activity. We had solid order intake growth, particularly in, as maybe cannot say new segments, but a bit more than in the previous quarters in mining and general manufacturing, in addition to what we mentioned earlier this year, which was power, defense, and aviation. It is true, like you said, that there is, particularly in Europe, certain segments, you mentioned automotive and pulp and paper, and they are certainly so, that are somewhat muted.
Marko Tulokas: Now, of course, if you put that to the service context, then for that activity to turn into that new activity to turn into service work, it takes, of course, a bit more time for that new equipment to turn into service activity. Those customer segments that we mentioned are also consuming service work, except maybe a bit less for power. On the other hand, pulp and paper and automotive are big users of the service work, and that, of course, may be one explaining factor why it has been a bit more muted on service side. Generally speaking, of course, our ability to cater so many customer segments and so many places across the world helps us to mitigate the fluctuations for these segments that might be in a downturn. That is now been visible also this year, particularly in relative terms to our competitions.
Antti Kansanen: Okay, that is very clear. Thank you very much.
Ruusa Vallin: For the questions. Now we are unfortunately at the end of our time for this webcast, and we will continue the discussion at our Capital Markets Day 2026 in about one hour. Thank you very much for the discussion. Any leftover questions, please send them over and we will get back to you. I hope to see you, everyone, in about one hour at our Capital Markets Day. Thank you.
Antti Kansanen: Thank you.
Marko Tulokas: Thank you.
Operator: The host has ended this call. Goodbye.
