Konecranes: The Finnish Lifting Giant That Defied Gravity

Introduction: A Global Powerhouse in an "Unsexy" Industry

On a crisp April afternoon in 1994, at precisely 15:00 hours, Stig Gustavson drove from Helsinki to the industrial town of Hyvinkää, 50 kilometers north. "I can tell you we used a lot of champagne!" he would later recall with a smile. That celebration marked the birth of Konecranes as an independent company—a Finnish spinoff that would grow from a former division of an elevator company into one of the world's most important industrial equipment manufacturers.

Konecranes Oyj is a Finnish company, headquartered in Hyvinkää, which specializes in the manufacture and service of cranes and lifting equipment. Konecranes is one of the largest crane manufacturers in the world and it produces about one in ten of the world's cranes, of which around 80% are for use in factories, the rest at ports.

The numbers tell a story of remarkable growth. The company went public on the Nasdaq Helsinki in 1996 and has since grown into a global leader, employing approximately 16,500 people across more than 50 countries and generating €4.2 billion in group sales in 2024.

But there's a deeper narrative here—one of strategic focus, shrewd M&A execution, digital transformation in traditional industries, and a management team that turned a forgotten division into a global leader. The central question: How does a spun-off crane division from an elevator company become a powerhouse in an unsexy but absolutely critical industry?

The answer lies in several key themes that will run through this analysis: the power of focus over diversification, the "service flywheel" that creates recurring revenue from installed equipment, M&A as a calculated growth lever, navigating regulatory complexity in global deals, and the digitalization of industrial assets. Each of these themes offers profound lessons for investors seeking to understand how industrial companies create sustainable competitive advantages.

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Part I: KONE Origins & The Crane Division's DNA (1910–1993)

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Setting the Stage: Finland's Industrial Heritage

In 1910, in an old stable in the suburbs of Helsinki, an electrical motor repair shop called KONE Corporation was founded. Konecranes' history dates back to 1910 when the electrical motor repair shop KONE Corporation was founded. The name "KONE"—literally "machine" in Finnish—reflected the country's engineering-driven industrial culture. Finland's geographic position between East and West, its vast forests, and its harsh climate bred a particular kind of industrialist: pragmatic, technically excellent, and accustomed to making things work in difficult conditions.

KONE would evolve primarily into an elevator and escalator company, but along the way it accumulated substantial expertise in mechanical lifting. In 1930 the company began developing electric hoists. The logical progression from elevator machinery to industrial cranes was natural—both required precise mechanical engineering, safety-critical components, and expertise in moving heavy loads vertically.

Konecranes originated within the Finnish Kone Corporation. Its history traces back to 1933 when Kone embarked on the production of Electric Overhead Traveling Cranes. This was the true birth of what would eventually become Konecranes—a business-within-a-business that would develop its own identity, customer relationships, and technical DNA over the following six decades.

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Building the Crane Business Within KONE

The crane operation grew steadily through Finland's post-war industrial expansion. Needing more space, the crane assembly operation moved to Hyvinkää in 1943, where Konecranes Head Quarters still stands today. This continuity of location—more than 80 years at the same site—reflects something fundamental about industrial manufacturing: deep expertise accumulates in specific places, embedded in local supplier networks, worker skills, and institutional knowledge.

In 1950 KONE began producing harbor cranes. This expansion into port equipment would prove strategically crucial decades later. During the 1950s, the harbour crane market saw strong growth as the post-war economy surged. The crane division was building capabilities across multiple end markets—factories, ports, and specialized applications—that would provide resilience through economic cycles.

By the 1970s, international sales gained momentum, beginning with the 1973 acquisition of Norway's Wisbech-Refsum and extending to markets in Canada, the Soviet Union, and Poland, where KONE dominated paper mill crane orders. The Finnish-Soviet trade relationship, which would later prove catastrophic for the broader Finnish economy, was actually beneficial for KONE's crane division during these years.

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The Critical Decision: Service as a Business

The most strategically significant insight came in 1960. Ten years later [after 1950], the company realized that non-operational cranes are a drain on their owners' resources and that equipment always needs to be well-maintained to prevent failures occurring. This seemingly obvious observation—that customers need their equipment to work reliably—led to a decision that would define Konecranes' competitive advantage for decades.

So, well ahead of their time, a separate department was established for crane service which, until this day, remains a core part of Konecranes' business. In an era when most equipment manufacturers viewed service as an afterthought—a necessary cost center to handle warranty claims and parts requests—KONE's crane division was systematically building a service organization.

This early insight into the economics of aftermarket service revenue would become Konecranes' most durable competitive advantage. A crane has a service life of 25-40 years. During that time, it requires regular inspections, maintenance, parts replacement, and eventually modernization. The present value of service revenue over a crane's lifetime often exceeds the original equipment sale. And crucially, out of Konecranes' agreement base, third party equipment represented approximately 55%. The service business doesn't just maintain Konecranes' own installed base—it extends to competitors' equipment as well.

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Organizational Consolidation

Internally, the crane activities were formalized as the KONE Cranes Division in 1988, focusing on technical leadership and customer-oriented training programs. By the early 1990s, the division had grown substantially ahead of the 1994 spin-off that birthed Konecranes as an independent entity.

"I started at KONE's Cranes division on January 2, 1988. It was a quite interesting situation, as most of the sales at the time went to Russia, and when sales to the Soviet Union later ceased to exist, we had to turn the company on a 180-degree axis and turn West," Gustavson recalled.

This pivot would prove prescient. The crane division was building capabilities for western markets just as the Soviet market was about to collapse catastrophically.

KONE Cranes Division remained an integral component of Kone until the year 1994. In February of that year, Kone made a strategic decision to refocus its efforts on the elevator business, leading to the divestiture of the crane division into an independent entity.

The stage was set for one of the most consequential management buyouts in Finnish industrial history.

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Part II: The Birth of Independence: The 1994 Spinoff

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The Near-Miss American Sale

Before the management buyout, there was nearly a very different outcome. The year before Konecranes' independence, KONE had tried to sell its cranes business to an American company. KONE sent Gustavson to the US to prepare for the sale.

"I went to meet the future owners. I came back disappointed, as we were far ahead of them," he said. "I then thought, 'Hey, I could make an offer!'"

This is a pivotal moment in corporate history that often goes unrecognized. Had that American sale proceeded, Konecranes might have become just another division of a U.S. conglomerate, potentially losing its distinctive Finnish engineering culture and service-focused strategy. Instead, Gustavson's assessment that KONE's crane division was more advanced than its prospective American acquirer gave him the confidence to pursue independence.

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Stig Gustavson and the Management Buyout

He then teamed up with Swedish private equity giant Industri Kapital to successfully negotiate Konecranes' independence. The partnership with Industri Kapital was crucial—it provided the capital structure to execute the buyout while allowing management to retain significant ownership and operational control.

Konecranes became independent on April 15, 1994—"at 15:00 hours," as noted by its founding CEO Stig Gustavson—marking the beginning of its journey as a standalone company. The precision of Gustavson's recollection—"at 15:00 hours"—speaks to the significance of that moment. For him and his team, this wasn't just a corporate transaction; it was the birth of something they intended to build into a world leader.

In 1994, KCI Konecranes was established as an independent company through the spin-off of Kone Corporation's crane division, a process finalized on April 15 with Stig Gustavson, a veteran of the industry since 1982, serving as its first president and CEO. Gustavson had been at KONE since 1982, giving him twelve years of deep institutional knowledge before taking the helm of the newly independent company.

Konecranes was part of the international Finland-based KONE Corporation until April 15, 1994 when KONE as part of structural changes disposed of all operations, excluding its elevator business. For KONE, this was part of a broader strategic refocusing. For Konecranes, it was liberation.

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Launching into a Recession

The timing of independence could hardly have been worse macroeconomically. Bubbly aside, it was a very tough year to start off the business. Finland was in the midst of a deep recession triggered by the collapse of the Soviet Union, its largest trading partner, and nationally the unemployment rate was approaching 20%.

The collapse of the Soviet Union also played an important role, as it had represented 15–20% of Finland's foreign trade. Thus, a key Finnish export market disappeared nearly overnight. The early 1990s depression in Finland was devastating. The gross national product decreased by 13%, and the unemployment rate rose from 3.5% to 18.9%. This was one of the worst peacetime economic crises in Finnish history—by some measures worse than the Great Depression.

"When we bought the company from KONE, people there were making bets on when we would go bankrupt. I never doubted my case. I had run the company since 1988…" The skepticism from KONE insiders was understandable. Spinning off into a depression seemed suicidal. But Gustavson's team had been systematically reorienting the business toward Western markets precisely because they saw the Soviet trade relationship deteriorating.

The challenging launch environment forced discipline from day one. There was no room for empire building, no tolerance for unprofitable product lines, no luxury of excess capacity. This lean DNA would serve the company well through subsequent economic cycles.

"Some years later we ended up buying that American company that wanted to buy Konecranes," Gustavson noted. The irony is delicious: the American acquirer that thought it was buying a struggling Finnish crane division ended up being acquired by the independent company that emerged from that very division.

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The IPO (1996)

As a result of the split, the KONE Crane Unit became an independent company and changed its name to KCI Konecranes. With lean profitable operations and a solid growth strategy, it became a publicly listed company on the Helsinki Stock Exchange. The IPO came just two years after independence, remarkably fast for a newly independent industrial company emerging from the worst recession in Finnish history.

Despite early challenges like the post-Soviet economic crisis, Konecranes went public in 1996 and weathered financial storms, becoming a robust and enduring global material handling leader.

The successful IPO demonstrated several things: first, that the management team had rapidly established credibility with investors; second, that the business model—with its recurring service revenue—was attractive even in difficult markets; and third, that Industri Kapital's private equity backing had achieved its purpose and it was time for a broader shareholder base.

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Part III: Building the Global Platform: The Acquisition Machine (1996–2010)

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The Acquisition Strategy Takes Shape

With public market capital available and a proven business model, Konecranes embarked on what would become one of the most systematic acquisition programs in the industrial equipment sector. Konecranes has grown over the years mainly organically but has a strong acquisition track record as well.

The acquisition strategy was disciplined and focused on three objectives: geographic expansion into key markets, product portfolio extension into adjacent categories, and—crucially—service network density. Every acquisition was evaluated not just for its equipment revenue, but for the service infrastructure and installed base it would bring.

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US Market Entry

The American market was essential. The United States represented the world's largest single market for industrial equipment, and establishing meaningful presence there required both manufacturing capability and service network coverage.

These moves supported the establishment of dedicated U.S. manufacturing operations by 2000, leveraging existing footholds like R&M Materials Handling in Ohio to localize production for the American market. R&M Materials Handling in Springfield, Ohio became a cornerstone of the U.S. strategy, providing both manufacturing capacity and local market credibility.

By 1998, KCI Konecranes strengthened its international presence through key acquisitions, including Overhead Crane Service in the United States, which enhanced its service capabilities in North America, and Trost & Hilterhaus in Germany, bolstering its industrial crane offerings in Europe.

Note the inclusion of a service company—Overhead Crane Service—alongside equipment manufacturers. This reflects the strategic priority placed on service network development. An equipment manufacturer without service capability is just a transactional supplier. An equipment manufacturer with dense service coverage becomes a partner in customer operations.

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Asia Expansion – Navigating the 1997 Crisis

During this period, KCI Konecranes expanded into Asian markets, navigating the 1997-1998 financial crisis while establishing sales and service presence in China and Southeast Asia to capitalize on industrial growth.

The Asian financial crisis of 1997-1998 created opportunities for companies with strong balance sheets and long-term perspectives. While weaker competitors retreated, Konecranes invested counter-cyclically to establish presence in what would become the world's fastest-growing industrial markets.

KCI Konecranes opened its own hoist assembly factory in Shanghai in November 2002. This was followed in 2004 by the opening of a port cranes factory in Dalian and a lift truck factory in Shanghai in 2007, giving Konecranes access to the mid-sized hoist and crane segment in China.

The China expansion was systematic: first local assembly, then full manufacturing, then expansion into adjacent product categories. Each step built local supply chains, developed local workforce capabilities, and established customer relationships.

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Product Portfolio Expansion

In 1997, the company acquired German MAN SWF Krantechnik. The product range expanded in 2004 to include lift trucks and reach stackers with the acquisition of the Swedish SMV Liftrucks.

The acquisition of Swedish-based SMV Lifttrucks AB in 2004 added reach stackers and lift trucks to the product range. Today, Konecranes is one of the leading manufacturers of forklift, container lift trucks and reach stackers with lifting capacities from 10 to 60 tonnes.

The SMV acquisition was strategically significant for the port solutions business. Container terminals require not just cranes but also lift trucks and reach stackers to move containers within the yard. By offering a complete portfolio, Konecranes could become a single-source supplier for terminal operators.

Further acquisitions followed in 2005, including R.STAHL AG's material handling division and MMH Holdings, Inc.

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Financial Growth Trajectory

The results were impressive. The company's revenue grew substantially, from approximately €300 million in 1994 to €971 million by 2005, reflecting robust demand for its industrial cranes and successful integration of acquisitions.

This represents compound annual growth of approximately 11% over eleven years—exceptional for an industrial equipment manufacturer in a competitive market. And this growth came despite the 1997-1998 Asian crisis and the 2001-2002 global recession.

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The Failed Partek Merger (2002) – First Taste of M&A Complexity

A merger plan between Partek and KCI Konecranes was announced in 2002. However, the merger fell apart on the same day as Kone unexpectedly announced the purchase of the state's 30.2% ownership in Partek, effectively preventing the union. Gustavson acknowledged Partek's move to Kone and revealed the company's withdrawal from the merger plan.

The irony was remarkable: KONE, the former parent company, blocked a deal by their former crane division. The episode demonstrated several things. First, the Finnish industrial landscape was small enough that corporate relationships remained entangled even after divestitures. Second, Konecranes had become significant enough to be considered a strategic threat by KONE. And third, large M&A transactions in Europe carried execution risks that even well-planned deals couldn't eliminate.

The Partek experience would prove instructive for later, even more complex M&A scenarios.

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Part IV: Leadership Transitions & Global Scale (2005–2015)

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Gustavson Steps Back

In the summer of 2005 Gustavson retired as CEO but he remained as the chairman of the board. Pekka Lundmark, then the CEO of Hackman, succeeded Gustavson as CEO of KCI Konecranes.

Gustavson stepped down as Konecranes' CEO in 2005, then served as Chairman of the Board from 2005-2017. Today, as one of the largest shareholders in the company, he sits on the Shareholders Nomination Board.

The transition from founder to professional management is often perilous for growth companies. Gustavson handled it skillfully by remaining as Chairman, providing continuity while allowing new leadership to bring fresh perspectives. His continued significant shareholding aligned his interests with other shareholders.

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The Lundmark Era

In 2000 Pekka Lundmark moved from Nokia into venture capital with Startupfactory, followed by the consumer goods company Hackman, where he first became a CEO. He then led Konecranes for 10 years, before in 2015 moving to Fortum, an international energy company.

Lundmark's background was diverse: Nokia during its golden age, venture capital, consumer goods, and now industrial equipment. Prior to Fortum, Lundmark served as President and CEO of Konecranes, a global material-handling technology leader, and from 1990-2000 he held multiple executive positions at Nokia, including Vice President of Strategy and Business Development.

His decade at Konecranes coincided with significant strategic evolution. In 2006 KCI Konecranes released a new global brand strategy. In it they dropped the KCI from the company name and adopted the slogan "Lifting Businesses". The rebranding signaled ambition: Konecranes wasn't just selling equipment—it was positioning itself as a partner that helped customers improve their operations.

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Diversification Strategy

Konecranes continued its focus on diversification, expanding its product portfolio to include a broader range of lifting equipment, material handling, and industrial services. This strategy allowed the company to tap into new markets and industries beyond its traditional stronghold in port and container handling equipment.

By 2008, the acquisition of key competitors and strategic partnerships enabled the company to establish a more robust presence in North America, Asia, and other emerging markets. This period saw Konecranes setting up new manufacturing facilities and service centers across various continents.

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Technology Investment

In the early 2010s, Konecranes invested heavily in research and development to introduce technologies such as automation, remote monitoring, and predictive maintenance, into its product offerings.

This technological investment would prove foundational for Konecranes' later digital transformation. The company began developing what would become TRUCONNECT—its suite of remote monitoring and predictive maintenance tools—during this period. The strategic insight was that as cranes became more sophisticated electronically, they generated data that could be monetized through advanced services.

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Lundmark's Exit

In 2015 Pekka Lundmark announced his resignation as the CEO. He was succeeded by Panu Routila who came from Ahlström Capital.

Previously, he was CEO of Fortum, a Finnish state-owned energy company, from 2015 to July 2020. Lundmark would later return to prominence as CEO of Nokia, demonstrating the caliber of executive talent Konecranes was able to attract and develop. Pekka Lundmark is a Finnish business executive, and former president and CEO of Nokia, from 2020 to March 2025.

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Part V: Inflection Point #1: The Terex Saga (2015–2017)

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The Merger of Equals Announcement

In the summer of 2015 Konecranes announced a merger plan with the US based Terex Corporation. The new Konecranes Terex plc would have been based in Finland and would have been the industry leader.

The strategic rationale was compelling. Terex was a major American industrial equipment manufacturer with substantial presence in cranes, material handling, and port solutions. A combination would create a global powerhouse with leadership positions across multiple segments and geographic markets.

Under the all-stock deal with Konecranes, announced in August 2015, the Finnish company would exchange 0.8 share for each Terex share. Terex shareholders would get 60% of a new company to be called Konecranes Terex based in Finland.

The deal structure—all-stock, with Terex shareholders owning the majority but with the company domiciled in Finland—reflected both sides' desire to create something new rather than having one company simply absorb the other.

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The Zoomlion Disruption

Then, in January 2016, China intervened.

Zoomlion Heavy Industry Science & Technology Co. offered to buy US crane-maker Terex Corporation for an estimated amount of US$ 3.3 billion, an attempt to override an existing deal between Terex and Finland's Konecranes. Zoomlion's unsolicited offer on 26 January 2016, which sent Terex shares soaring, appears to the first time a Chinese construction machinery company has openly tried to buy a U.S rival.

U.S.-based Terex Corp says it is halting all merger activities with Finnish-based Konecranes while it considers an acquisition offer from China-based Zoomlion.

The Chinese bid created a dilemma for Terex's board. Zoomlion was offering cash; Konecranes was offering stock. For shareholders focused on short-term value, cash was preferable. But the Zoomlion bid faced significant regulatory uncertainty.

Zoomlion offered to pay Terex's shareholders an additional special dividend of US$1 per share which would bring the cash offer to US$31 per share, thus increasing its bid to US$3.4bn.

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The Pivot: From Merger to Acquisition

When the Zoomlion bid ultimately failed to materialize, the situation had changed fundamentally. The merger of equals was dead, but Konecranes pivoted skillfully to acquire the most strategically valuable piece of Terex.

In May 2016 the merger was called off due to a competing offer to Terex by the China based Zoomlion. Instead of the merger Terex agreed to sell the Material Handling and Port Solutions division to Konecranes for 1.3 billion euros.

Konecranes will pay $820 million in cash and 19.6 million shares for Terex's material-handling and ports-solutions division, MHPS. It's targeting savings of 140 million euros ($158 million) from a three-year integration program.

The sale of the MHPS segment would appear to be beneficial to both companies, providing Terex with much-needed cash to pay down its debts and granting Konecranes ownership of the Terex business unit with which it had progressed the furthest in the merging process.

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Regulatory Hurdles: The Stahl Divestiture

In August of the same year the European Commission approved the sale but with the condition that Konecranes would have to divest their STAHL Cranesystems business. In December Konecranes announced that it had sold Stahl to US based Columbus McKinnon.

Regulatory approval came with strings attached. The European Commission identified STAHL Cranesystems as creating excessive concentration in certain product categories when combined with Demag. Konecranes accepted this condition pragmatically—giving up one business to acquire a larger, more strategically valuable one.

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Completion and Transformation

In January 2017 the acquisition of the Terex MHPS-division was completed. Also the MHPS got back its old name as the division was renamed to as Demag Cranes & Components.

The Demag brand carried enormous significance in the industry. In 2017 Konecranes from Finland purchases the MHPS division from Terex. In addition to becoming again a European owned company, Konecranes also revives the Demag name as the MHPS becomes the Demag Cranes & Components Gmbh.

Demag's history stretched back to 1819—making it one of the oldest industrial equipment brands in the world. Konecranes gained not just a product line but a heritage brand with deep customer relationships, particularly in Germany and Europe.

Based on 2015 financials, Konecranes and Demag had aggregated sales of about €3.5 billion, an adjusted EBITDA of €267 million, and a total workforce of about 19,000.

2017 – Acquisition of Terex Corporation's MHPS business, including the Demag, Gottwald and Noell brands. 2017-2019 – Integration of Terex MHPS: achieving the EUR 140 million cost synergy target and scratching the service growth potential in Demag's installed base.

The integration was executed successfully, hitting the €140 million synergy target within three years. Crucially, Konecranes gained access to Demag's substantial installed base—equipment that would generate service revenue for decades.

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Part VI: Inflection Point #2: The Failed Cargotec Merger (2020–2022)

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The "Finnish Champion" Ambition

In October 2020 Konecranes announced a plan to merge with another Finnish company called Cargotec (also a former division of KONE).

The two companies announced an agreement to merge in a $5 billion deal in October 2020.

There was poetic symmetry in this proposed combination. The combination involved two Finnish suppliers of equipment and services used by port terminal operators, logistics companies, and other industrial firms to lift and handle containers and cargo around the world. Both Konecranes and Cargotec had originated as divisions of KONE. The deal would have reunited them under a single Finnish holding company.

The strategic logic was sound: combined scale in port equipment, complementary product portfolios, enhanced service networks, and the creation of a true "Finnish champion" in material handling. The merged company would have been formidable in its competitive position.

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Multi-Jurisdictional Approval Process

Also in August 2021 the Chinese State Administration for Market Regulation approved the merger. In February 2022, the European Commission approved the merger.

As announced on February 24, 2022, the EC conditionally approved the planned merger between Cargotec and Konecranes on the basis of the same remedy package rejected by the CMA, which comprised commitments to divest Konecranes Lift Truck business and Kalmar Automation Solutions.

The regulatory process demonstrated both the challenges of global M&A and the divergent approaches of different competition authorities. China approved. The EU approved with conditions. The parties offered to divest overlapping businesses to address concerns.

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The UK CMA Blockade

Then came the UK Competition and Markets Authority.

On March 29, 2022, global container handling equipment providers Cargotec and Konecranes abandoned their proposed $5 billion merger after the United Kingdom Competition and Markets Authority (CMA) and the U.S. Department of Justice Antitrust Division (DOJ) rejected the parties' proposed settlements, and the CMA concluded that the transaction should be prohibited. The same remedies had already been accepted by the European Commission, which cleared the merger to proceed in February. This is one of several recent examples of deals being abandoned due to antitrust challenges in the UK and United States.

Following an in-depth Phase 2 investigation, the Competition and Markets Authority (CMA) found that the merger would harm competition in the supply of a wide range of container handling equipment products. Within these markets, the CMA's investigation found that Cargotec and Konecranes are competing closely for business in the UK, and that UK customers would have few remaining alternative suppliers after the merger.

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Why the Remedies Failed

In Cargotec/Konecranes, the proposed remedy involved the divestment of two separate business units, one from each of the parties, designed to address the specific overlap areas. However, both the DOJ and the CMA sent strong messages that this kind of "mix and match" solution was unacceptable. The CMA, in particular, highlighted concerns that the proposed carve-out was subject to material "composition" risk, stemming from insufficient or missing assets that would be needed to compete effectively, as well as a lack of certainty as to the effectiveness of the carve-out. The CMA was also concerned that the package was not of sufficient scale to create a viable competitor. The parties would have had to offer elements going beyond the immediate overlaps identified by the CMA to create an acceptable package.

The CMA's reasoning illuminated a fundamental shift in regulatory philosophy. Traditional merger review focused on specific product market overlaps—if you divest the overlapping business, the problem goes away. The CMA took a more holistic view: the divested business needed to be a viable, standalone competitor with its own supply chains, R&D capabilities, and customer relationships. A "mix and match" remedy combining pieces from both companies wouldn't create that.

The deal illustrates (1) the extent to which decisions in different jurisdictions may diverge, with the most restrictive regimes determining outcomes; (2) a growing trend of increased skepticism toward merger remedies, particularly in the UK and United States; (3) heightened risk around transactions touching key elements of critical supply chains.

For dealmakers globally, this case became a warning about the "most restrictive regulator" problem. You can have every major jurisdiction except one approve a deal, and the lone holdout can kill it.

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The Cost and the Aftermath

By the end of 2021, Konecranes had booked EUR 56 million and Cargotec EUR 57 million of merger related transaction and integration planning costs.

Beyond the direct costs, the failed merger consumed management attention for nearly two years. Christoph Vitzthum, the Chairman of Konecranes stated: "The combination of Konecranes and Cargotec, as planned and announced on 1 October 2020, would have created a company that would have been greater than the sum of its parts. At the same time, we believe that further remedies would have not been in the best interest of Konecranes' shareholders as they would have changed the strategic rationale of the transaction. Konecranes will continue to drive its strategy and pursue value-creation potential on a stand-alone basis."

"The Konecranes Board of Directors initiated an international search process for a new President and CEO in March immediately after the planned merger with Cargotec was cancelled. Several excellent candidates were evaluated. Anders Svensson demonstrates the right mix of competencies, personal qualities and experience to lead Konecranes on its exciting journey."

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Part VII: The Service Flywheel & Digital Transformation

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The Economics of Installed Base Service

The service business is the strategic heart of Konecranes. Industrial Service - With our unique field service network and digital capabilities, we provide industry-leading lifecycle services for all types and makes of industrial cranes and hoists. Our objective is to improve the safety, productivity and sustainability of our customers' operations. Around 50% of our Service agreement base consists of non-Konecranes branded cranes and hoists.

We have estimated the industrial crane maintenance market to be over EUR 10 billion. Out of the industrial crane service market, a large share continues to be held by crane owners' in-house teams. Konecranes is the market leader in industrial crane maintenance with a unique global branch network.

The recurring nature of service revenue creates remarkable stability. Service annual agreement base value EUR 342.5 million (318.3), +7.6 percent (+6.3 percent on a comparable currency basis). The service agreement base value has grown consistently, from approximately €268 million in 2019 to €342.5 million by end of 2024—a compound annual growth rate of approximately 5%.

Furthermore, we are bundling more and more products to our service agreements, creating recurring revenue, which means that they are covering some things that were sold separately earlier.

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TRUCONNECT: Digitizing the Service Relationship

TRUCONNECT is a suite of remote service products and applications to support maintenance operations and drive improvements in safety and productivity.

TRUCONNECT Remote Monitoring collects condition, usage and operating data from control systems and sensors on a crane and provides alerts of certain anomalies. Remote Monitoring data is used in maintenance planning and in predicting possible component or equipment failure. Collected data varies depending on the make and model of your crane, but typically covers condition and expected service life of critical components, running time, lifted loads, motor starts, work cycles and emergency stops.

Predictive maintenance utilizes condition monitoring, advanced inspections, and data analytics to predict component or equipment failure to help you further optimize maintenance activities, reduce unplanned downtime and improve equipment safety, productivity and lifecycle value. TRUCONNECT Remote Monitoring is a key element of predictive maintenance.

The digital transformation extends across the entire product portfolio. Every single type of crane and lift truck in the Konecranes portfolio is now available with a full suite of digital services, including TRUCONNECT® Remote Monitoring to collect usage data, CheckApp for daily inspections, and access to the yourKONECRANES customer portal to analyze condition and performance. With each asset in the fleet in view in any place at any time, management and maintenance has never been easier. Whether customers use lift trucks to move containers, port cranes to handle cargo or shipyard cranes to build ships, all operational data is now collected and stored together. Available 24/7, this information helps plan maintenance and optimize asset deployment.

Konecranes digital services have ISO/IEC 27001:2022 certification for information security management. The ISO/IEC 27001 certificate demonstrates a commitment to proactively manage the information security of Konecranes digital services and ensure compliance with legal and customer requirements. The certification applies to the development and delivery of the Konecranes Portal, the CheckApp for Daily Inspections and Slings and Accessories Inspection apps, and the TRUCONNECT suite of remote service products.

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Part VIII: Leadership, Governance & Current Position

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The Post-Merger Leadership Transition

Anders Svensson will assume his role at the latest on December 7, 2022. Anders Svensson joins Konecranes from Sandvik, where he is currently President of the Sandvik Rock Processing Solutions Business Area.

Svensson's tenure was marked by strategic clarity and financial performance improvement. "I am honoured and excited to have the opportunity to lead Konecranes, a global industry leader known for its unique service and equipment offering and great people. This is an exciting time to join the company, as Konecranes, with its leading technology and digital and automation capabilities, is in a unique position to support customers to further improve the safety, productivity and sustainability of their operations."

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The Tulokas Succession

Konecranes has appointed Marko Tulokas as its new President and CEO as of June 1, 2025. He succeeds Konecranes' current President and CEO Anders Svensson who will leave the company on July 19, 2025, as announced earlier.

Tulokas is currently Konecranes' business area president, industrial equipment and a member of the company's leadership team. He joined Konecranes in 2004 and has held several senior business leadership positions in the company, both in Finland and abroad.

The selection of an internal candidate with 21 years at the company signals confidence in strategic continuity. "Our business model has proven to be resilient in today's turbulent world, and I'm confident about our success also in the future," says Marko Tulokas.

"I want to already at this stage thank President and CEO Anders Svensson, who has done excellent work in leading Konecranes. During his tenure, the company has updated its strategy, improved its financial performance and generated value for its shareholders," says Pasi Laine.

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Shareholder Structure

As of June 2025, the major shareholders of Konecranes Plc include Solidium Oy, a Finnish state-owned investment company, holding 8,793,123 shares, representing approximately 11.1% of the total shares outstanding. Oras Invest Ltd., a private investment firm, owns 2,710,000 shares, equivalent to about 3.4%. Varma Mutual Pension Insurance Company, one of Finland's largest pension insurers, holds 2,702,201 shares, or roughly 3.4%, while Ilmarinen Mutual Pension Insurance Company possesses 2,494,239 shares, accounting for approximately 3.1%. Stig Gustavson and his family, with the founder maintaining significant influence through historical leadership roles, control 2,366,157 shares, or about 3.0%.

The presence of Solidium—the Finnish state's investment vehicle—as the largest shareholder reflects Konecranes' status as a strategic industrial asset for Finland. The continued shareholding by founder Stig Gustavson ensures alignment between historical ownership and current strategy.

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Part IX: 2024 Financial Performance & 2025 Outlook

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Record Results

The year was record-breaking in terms of both sales and profitability. Sales increased 6.9 percent in comparable currencies to EUR 4,227.0 million and the comparable EBITA margin reached 13.1 percent.

Sales and comparable EBITA margin were both at an all-time high, and with our 2024 comparable EBITA margin of 13.1% we are well within our profitability target range.

Overall, 2024 was a record year for Konecranes. Our sales and comparable EBITA margin were an all-time high, and we have reached our profitability target range on a rolling twelve-month basis in all three Business Segments and on the Group level well ahead of our original deadline. This is an important milestone but does not mean that the work is over.

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Segment Performance

In Service, order intake increased 3.5% year-on-year in comparable currencies. Sales increased 3.7% year-on-year in comparable currencies. The comparable EBITA margin improved year-on-year to 20.6%, mainly driven by pricing and higher volumes. The agreement base value continued to grow and in comparable currencies was 6.3% higher at the end of Q4 versus a year ago.

The Service segment's 20.6% EBITA margin demonstrates the value of the recurring service model. This is substantially above typical industrial equipment margins and reflects the value-added nature of maintenance services.

Industrial Equipment's external orders increased 27.7% year-on-year in comparable currencies, mainly driven by a single large process crane order, as well as good component orders. External sales increased by 6.6% year-on-year in comparable currencies. Driven by volume growth and the R&D grant, the comparable EBITA margin increased year-on-year to 9.7%.

In Port Solutions, order intake totaled €461 million, increasing 51.4% year-on-year in comparable currencies. Port Solutions had an excellent delivery quarter, and sales grew 6.2% year-on-year in comparable currencies.

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2025 Guidance

Konecranes expects net sales to remain approximately on the same level in 2025 compared to 2024. Konecranes expects the full-year 2025 comparable EBITA margin to remain approximately on the same level or to improve from 2024.

Our aim is to continue the positive development in 2025, and Konecranes has every opportunity to deliver another strong year. Despite the macroeconomic concerns around us, the demand for our services and solutions continues to be good.

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Part X: Competitive Positioning & Strategic Analysis

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Market Landscape

Cargotec, Konecranes, ZPMC, Mobicon, and Liebherr are major companies with a strong presence in multiple markets and a range of products.

SANY Group, Liebherr Group, Konecranes, Cargotec Corporation and Hyster-Yale Materials Handling, Inc. are the major companies operating in the Container Handling Equipment Market. The container handling equipment market features several prominent players, including Konecranes, Liebherr, SANY Group, Hyster-Yale, Cargotec, and ZPMC, leading the industry through continuous innovation and strategic expansion.

North America: Manitowoc (28%), Link-Belt (22%), Terex (18%) Europe: Liebherr (35%), Terex Demag (20%), Konecranes (15%) Asia-Pacific: Tadano (20%), XCMG (18%), Zoomlion (16%)

The competitive landscape varies significantly by geography and product category. In Europe, Konecranes holds approximately 15% market share in cranes, trailing Liebherr. In ports, Konecranes competes with Cargotec, Liebherr, and Chinese manufacturers including ZPMC and SANY.

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Porter's Five Forces Analysis

Threat of New Entrants: Low The crane and material handling industry has significant barriers to entry. The high barriers to entry, including substantial capital requirements and technical expertise, have limited the emergence of new players, contributing to the market's consolidated nature. Manufacturing cranes requires specialized engineering expertise, substantial capital investment in production facilities, regulatory certifications, and—critically—service networks that take decades to build. Chinese manufacturers have made inroads at the lower end of the market, but establishing presence in demanding applications remains difficult.

Supplier Power: Moderate Konecranes sources components from multiple suppliers for most categories, reducing dependence on any single source. However, specialized components like drive systems and control electronics have limited supplier bases.

Buyer Power: Moderate to High Large customers—particularly port terminal operators and major industrial companies—have significant purchasing power and can demand competitive pricing. However, once equipment is installed, switching costs are high due to service relationships and operator training.

Threat of Substitutes: Low There are no meaningful substitutes for cranes in industrial lifting applications. Manual handling, forklifts, and conveyors serve different use cases rather than directly substituting for overhead cranes and port equipment.

Competitive Rivalry: High Competition is intense among established players, particularly in cyclical industrial equipment segments. The failed Cargotec merger would have significantly reduced rivalry in port equipment; its failure leaves the competitive landscape largely unchanged.

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Hamilton Helmer's Seven Powers Framework

Scale Economies: Moderate Konecranes benefits from scale in manufacturing, particularly for standardized hoists and components. However, much of the product line involves customization, limiting pure scale advantages.

Network Effects: Limited Unlike software or platform businesses, crane manufacturing has minimal network effects. The service network's density provides some network-like benefits in responsiveness and parts availability.

Counter-Positioning: Strong ⭐ Konecranes' service-centric business model represents classic counter-positioning. Traditional crane manufacturers viewed service as a necessary cost center. Konecranes built service as a profit center with recurring revenue. Competitors would have to cannibalize their own equipment sales focus to match this positioning—most haven't made that strategic shift.

Switching Costs: Strong ⭐ Once a customer has a Konecranes service agreement, switching to a competitor requires retraining maintenance personnel, establishing new parts supply relationships, and accepting transition risk for safety-critical equipment. Servicing other makes of cranes also provides future opportunity for Konecranes equipment. At some point the hoist will need to be replaced, by either a new crane or then as a modernization or retrofit, and we can perhaps replace it with our own product.

Branding: Moderate The Konecranes and Demag brands carry significant weight in the industry, particularly in Europe. However, in price-sensitive segments, brand premium is limited.

Cornered Resource: Moderate Konecranes' service network—built over decades with thousands of service technicians globally—represents a cornered resource. Around 50% of our Service agreement base consists of non-Konecranes branded cranes and hoists. The ability to service competitors' equipment while also selling Konecranes products is a unique competitive position.

Process Power: Emerging ⭐ TRUCONNECT and digital services represent emerging process power. The ability to collect operational data from installed equipment, apply predictive analytics, and deliver proactive maintenance creates service quality advantages that competitors cannot easily replicate without similar digital infrastructure investments.

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Part XI: Bull Case vs. Bear Case

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The Bull Case

Service Recurring Revenue: The service agreement base of €342.5 million represents highly predictable, high-margin recurring revenue. At 20%+ EBITA margins, Service is the cash engine of the business.

Installed Base Growth: Every crane sold creates decades of service revenue opportunity. The installed base is growing globally, and Konecranes services both its own equipment and competitors' equipment.

Digital Moat Deepening: TRUCONNECT creates data-driven switching costs. Once customers rely on Konecranes' predictive maintenance and remote monitoring, they're unlikely to switch to competitors without similar capabilities.

Port Infrastructure Investment: Global trade growth requires port capacity expansion. Automation and electrification trends drive equipment replacement cycles. These container handling companies are increasingly focused on developing automated and electric equipment solutions to meet growing environmental regulations and efficiency demands.

Management Continuity: With Marko Tulokas—a 21-year veteran—as CEO, strategic continuity is ensured. The failed Cargotec merger distraction is past; management can focus fully on organic execution.

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The Bear Case

Cyclicality: Industrial equipment demand correlates with global industrial production. A global recession would impact order intake across all segments.

Chinese Competition: Chinese manufacturers including Zoomlion, SANY, and XCMG are expanding globally with lower-priced products. XCMG and Sany offer competitive pricing with 30-40% lower costs than European brands while maintaining international safety standards.

Port Segment Concentration Risk: Port Solutions depends heavily on timing of major terminal projects. Large orders can create quarterly volatility, and project delays can significantly impact revenue recognition.

Failed Merger Opportunity Cost: The Cargotec deal would have created significant scale advantages and reduced competition. Its failure leaves Konecranes smaller than it might have been.

CEO Transition: While internal succession provides continuity, new leadership inevitably involves adjustment periods and potential strategic evolution.

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Part XII: Key KPIs to Track

For investors monitoring Konecranes, three metrics warrant particular attention:

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1. Service Agreement Base Value Growth (%)

Currently at €342.5 million, this metric represents the annualized value of recurring service contracts. Growth indicates: - Successful conversion of equipment sales into service relationships - Retention of existing service customers
- Expansion into servicing competitors' installed bases

Target: Management has historically targeted mid-single-digit organic growth in agreement base value. Consistent achievement suggests the service flywheel is functioning.

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2. Service EBITA Margin (%)

Q4 2024: 20.6%

This measures the profitability of the recurring service business. Expansion indicates: - Successful pricing power - Efficiency improvements in service delivery - Value creation from digital services (TRUCONNECT)

Benchmark: Sustained margins above 20% demonstrate the premium value customers place on Konecranes service capabilities versus in-house alternatives.

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3. Order Book Coverage (Months)

Order book end of 2024: €2.89 billion 2024 Sales: €4.23 billion Coverage: ~8 months

Order book provides visibility into near-term revenue and indicates demand strength. Coverage below 6 months would suggest demand concerns; coverage above 12 months might indicate capacity constraints or delivery delays.

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Conclusion: The Finnish Formula

Konecranes represents a particular type of success story: the focused spinoff that outperforms its diversified parent. When KONE divested its crane division in 1994, it was shedding a non-core business in the midst of Finland's worst recession in modern history. The skeptics at KONE bet on bankruptcy.

Thirty-one years later, Konecranes has become a €4+ billion global leader with world-class margins and enviable recurring revenue characteristics. The formula wasn't complicated:

Focus: Rather than diversifying away from cranes, Konecranes went deeper into the category, expanding geographic coverage, product portfolio, and especially service capabilities.

Service First: The insight that cranes need maintenance throughout their multi-decade lives—and that customers would pay premium prices for reliable service—became the foundation of sustainable competitive advantage.

Disciplined M&A: From the early U.S. acquisitions through the transformational Demag deal, Konecranes used acquisitions to accelerate geographic and capability expansion while maintaining integration discipline.

Digital Transformation: TRUCONNECT and the yourKONECRANES portal represent genuine innovation in a traditional industry, creating data-driven switching costs that competitors struggle to replicate.

The failed Cargotec merger represents a road not taken—one that might have created even greater scale advantages but also carried integration risks. As a standalone company, Konecranes has proven it can thrive. "Our business model has proven to be resilient in today's turbulent world."

For investors seeking exposure to global industrial infrastructure—factories, ports, logistics—Konecranes offers a differentiated model where recurring service revenue provides stability through economic cycles, and digital transformation creates deepening competitive moats. It's not the sexiest industry story. But as Stig Gustavson might say with that characteristic Finnish smile: "I'm not selling any shares."