1. © 2009 Konecranes Plc. All rights reserved. Jarmo Juntunen Modernized by Konecranes 1Modernizations Strategy Jarmo Juntunen Strategy BU Modernizations

2. © 2009 Konecranes Plc. All rights reserved. Modernization in 30 s Through Konecranes Crane Modernizations we can improve the safety and productivity of cranes and extend their life time In 2012 we will be the leading crane modernization provider of intelligent solutions in crane control systems Our customers are process industries, shipyards, ports, power plants Through modernizatios the cranes are modified to comply with the changing needs and requirements and regulations We can provide capacity and performance improvement and life time extensions with state of the art componentry and technology The expertize and experience of the leading crane supplier and service company are utilized on the modernizations We are specialized in crane technology and have the most comprehensive service organization close to the customer Modernizations Strategy Jarmo Juntunen2

3. © 2009 Konecranes Plc. All rights reserved. Modernization in 5 min (External) Why should customer buy our modernizations? All the needs during the life time of the crane from same supplier Konecranes Solution; technology and components specially designed for crane applications Competent organization close to the customer for sales, service and support Experience and references The modernization investments can be spread over longer time period according to mutually agreed plan Environmental benefits ; –Utilization of existing structure and materials where feasible –Modern environment and energy saving solutions and technology Modernizations Strategy Jarmo Juntunen3

4. © 2009 Konecranes Plc. All rights reserved. Modernization in 5 min (Internal) Why are we doing modernization business? Make money –Opportunity for good margins through right technical solutions, project and contract management Very attractive market potential –Market large enough to be selective Secure and increase Konecranes technology platform on the field –Our electrical solutions provide platform for further solutions for improvement of the productivity of the customer –Secure our own parts business –Secure our own service business –More volume to get the scale benefit for component production Modernizations is a balancing business during economic downturn Modernizations Strategy Jarmo Juntunen4

5. © 2009 Konecranes Plc. All rights reserved. Current situation 5Modernizations Strategy Jarmo Juntunen

6. © 2009 Konecranes Plc. All rights reserved. HISTORY OF THE BUSINESS UNIT Modernization history as long as Crane Service -> 50 years Engineered modernizations separated from field modernizations since 90`s ( SP 27 vs. SP 22M) SP 27 organized under Heavy Lifting during 2001-2006 BU Global Crane Modernizations in BA Service since 2007 Reorganization started 2009 in connection to KC finetuning, KC/P&H integration and new regional structure No separate acquisitions for modernizations but Morris, P&H and Port Service aquisitions have provided increase in competence and offering 6Modernizations Strategy Jarmo Juntunen

7. © 2009 Konecranes Plc. All rights reserved. OUR CURRENT BUSINESS Products and services offered Main cathegories –Upgrading of electrifications, PLC´s, control systems –Machinery upgradings and replacements Special Single Failure Proof solutions for nuclear power stations –Steel structure modifications –Life time extensions (based on CRS and life time analysis) –Engineering and services –Component and material supply –Installation and commissioning Specialized site concept and equipment for nuclear sites 7Modernizations Strategy Jarmo Juntunen

8. © 2009 Konecranes Plc. All rights reserved. OUR CURRENT BUSINESS Products and services offered Process crane modernizations Technology primarely based on Konecranes solutions in Europe and Asia UK having also Morris solutions Also some other suppliers used locally in certain projects USA based on P&H technology with Drivecon electrics Nuclear crane modernizations Strong competence and technology base in Millwaukee Ports and shipyard crane modernizations Konecranes electrification and machinery solutions supported from Finland Ports Service Germany is having the competence in structural changes and moves 8Modernizations Strategy Jarmo Juntunen

9. © 2009 Konecranes Plc. All rights reserved. Modernizations Strategy Jarmo Juntunen Competitors Suppliers of drives and electrics ABB, Siemens, Emerson, Avtron + price competitive + specialists in electrics + scale benefits + both AC and DC solutions -lack of mechanical competence machinery offering -service network many times depending on local partners Crane companies Kalmar, Demag, Bardella + crane competence + own equipment population - mainly concentrating on own fleet

10. © 2009 Konecranes Plc. All rights reserved. Modernizations Strategy Jarmo Juntunen Competitors Engineering houses +flexibility + process know how + project business understanding + price/cost sensitive -in-house product competence -no service structure Customer segment specific (Reel, Whiting (nuclear, WTE), Portek (Ports), Cargotec (Cargo), Seward Wyon (Ports)...) + industry understanding’ + customer specific in-house solutions -vulnerability and dependence of one industry -Limited service approach -Lack of scale benefit

11. © 2009 Konecranes Plc. All rights reserved. Modernizations Strategy Jarmo Juntunen Competitors Local players (various by country) + customer relationship + flexibility + low overhead costs -No own products (normally representatives) -Lack of financial strenght -

12. © 2009 Konecranes Plc. All rights reserved. Business drivers 12Modernizations Strategy Jarmo Juntunen

13. © 2009 Konecranes Plc. All rights reserved. Modernizations Strategy Jarmo Juntunen Business Drivers Modernization challenges and opportunities 1.Safety Increasing safety concerns and responsibility bring new opportunities for modernizations and upgrading. 2.Environment Increasing environmental requirements open possibilities for new technology and solutions –energy consumption –emissions –noise –material recycling 3.Increasing efficiency and reliability requirements lower life time and operating costs Western industries challenged by LCC, productivity improvements a must 4.Reorganizations –New layouts –New production processes under cranes –Movings and resellings

14. © 2009 Konecranes Plc. All rights reserved. Customers Engineered modernizations customers –Over 90% of customers related to heavy lifting equipment applications in Power plants –Nuclear –WTE –Hydro power Steel mills and steel product warehouses General engineering and manufacturing Paper mills Ports Shipyards –Expectations from supplier Technical expertize and experience Easy to deal with Safe and hassle free project execution Agile frontline with stable and reliable company behind 14Modernizations Strategy Jarmo Juntunen

15. © 2009 Konecranes Plc. All rights reserved. Modernizations Strategy Jarmo Juntunen Market Trends Harbours : –Larger vessels sizes ; increasing STS height, outreach and speed requirements –More efficient yard utilization –Electrical mods. Changes from DC to AC –Life time extensions, Life time costs + envir. (fuel saving concepts, el. feed) Paper: –Upgrading of equipment has started after decisions in restructuring –Need for SW solutions Steel: –Safety improvements; emergency brakes, double rope drives –Capacity and life time extensions : inverters, el. rooms. Power: –Safety requirements –Technology upgrades Shipyards: ( Repair shipyards upgrading equipment ) –Larger Blocks handled –Electrical upgrades

16. © 2009 Konecranes Plc. All rights reserved. SWOT 16Modernizations Strategy Jarmo Juntunen

17. © 2009 Konecranes Plc. All rights reserved. Modernizations Strategy Jarmo Juntunen SWOT Strengths: –Profit focus –In-house competence : Electrical, mechanical, consulting, engineering, production, own components. –Local organizations close to customer –Strong service culture –Long experience, references Opportunities: –Better utilization of customer and crane base knowledge; MainMan IV data –Large own heavy crane population –Increasing safety requirements –New market areas (ME, Asia, Latin America) –New competence and ideas from P&H, Morris Weaknesses: –Competitiveness of re-electrifications –Too much outsourced engineering not good concept for modernization –Site work problems in large projects Threats: –Risks of large projects –Profit centre focus must not prevent visibility of pipeline profitability and suboptimization –Dependence and leak of core competence of engineering know how to subcontractors –Losing market share and crane intelligence to general electric companies

18. © 2009 Konecranes Plc. All rights reserved. Key strategies and roadmap to achieve the targets 18Modernizations Strategy Jarmo Juntunen

19. © 2009 Konecranes Plc. All rights reserved. Key strategies 1.Solutions based on Konecranes technology and components We supply the intelligent part of the crane Manage engineering, supply, site and support 2.Focus on our service customers Know the customer, their process and plans Know the history of the crane CRS platform 3.Risk management with new customers and areas through CRS and limited scope 4.Secure our crane population Don´t let the competitors to touch 5.Expand to new markets where we have service presence but not modernizations yet 6.Keep the difference to general electric houses through having both mechnical and electrical competence 19 Modernizations Strategy Jarmo Juntunen

20. © 2009 Konecranes Plc. All rights reserved. Key strategies Modernizations and New Equipment supporting each other : 1.Giving customer alternative –Solution to the need can be new equipment or modernization 2.Customer is getting solution to new and old crane needs from the same company –Package solutions 3.One component and technology platform –Customer can harmonize component and spare parts base –Scale benefit for supply 4.Resource sharing possibility in engineering and project mgmt 20 Modernizations Strategy Jarmo Juntunen

21. © 2009 Konecranes Plc. All rights reserved. Key strategies 21Modernizations Strategy Jarmo Juntunen CUSTOMER KNOWLEDGEELECTRICAL & MACHINERY KNOWLEDGE Service historyComponent Supply Crane usage data Mainman IV MODERNIZATION COMPETENCE CRANE ENGINEERING Crane building know how

22. © 2009 Konecranes Plc. All rights reserved. Modernization Units Operational structure 2009 Modernizations Strategy Jarmo Juntunen 22 Modernizations in the regions within Crane Service Americas WEMEA NEA SEA Global Mods Support P&H Mods Mods US Global Mods Export Mods Nordic Mods UK Mods SEA Customers

23. © 2009 Konecranes Plc. All rights reserved. Modernizations Operational Structure 2010 Modernizations Strategy Jarmo Juntunen23 Global Modernizations Global BU responsibility Global strategy and guidelines Promotion and development of modernization solutions & technology Sales support Engineering solutions Component packages Technical, product and sales training Business UnitRegions

24. © 2009 Konecranes Plc. All rights reserved. Key strategies and roadmap Geographical footprint 1.Get the business running in established areas where new organization has been but in place New organization in US after unification of KC and P&H New structure in UK starting after combining KC and Morris operations New set up in Finland as a new platform for East Europe mods Growth Other WEMEA and NEI countries activating ; France, Benelux, Austria 2.Get started in areas where service has been operating but modernizations not been actively done so far Indian basic organization has been put n place October 2009 In China training of local engineers have started, first projects in pipeline SEA having couple of interesting steel mill projects Plan for Australia 3.New markets following set up of service presence. Middle East Latin America Africa 24Modernizations Strategy Jarmo Juntunen

25. © 2009 Konecranes Plc. All rights reserved. NOT JUST LIFTING THINGS, BUT ENTIRE BUSINESSES 25 Modernizations Strategy Jarmo Juntunen