© 2010 Konecranes Plc. All rights reserved.

Matti Malminen / Trade Finance

Sitra / December 2013 Matti Malminen

matti.malminen@konecranes.com

© 2011 Konecranes Plc. All rigths reserved. 5.12.2013 2 Corporate presentation 2013

OUR COMPANY IN NUMBERS

EQUIPMENT IS

61% OF TOTAL SALES

ACTIVE IN ALMOST

50 COUNTRIES

609 LOCATIONS WORLDWIDE

12,100 EMPLOYEES

€2,170 MILLION IN SALES

IN 2012

MAINTENANCE CONTRACTS

COVERING MORE THAN

418,000 EQUIPMENT OF DIFFERENT

MAKES

SERVICE IS

39% OF TOTAL SALES

1,73 MILLION ANNUAL

SERVICE CALLS

© 2010 Konecranes Plc. All rights reserved.

WORLD’S LARGEST GOLIATH CRANE

384 ft.

117 m

689 ft.

210 m

25.10.2012 Trade & Export Finance / Matti Malminen / Konecranes 3

© 2011 Konecranes Plc. All rigths reserved.

TWO KONECRANES STS CRANES ON THEIR WAY FROM CHINA TO MOZAMBIQUE (12.2.2013)

SHIPMENT ON

DECK NOT

ALLOWED!

© 2013 Konecranes Plc. All rights

reserved.

CONTAINER TRAFFIC

5

SOURCES: Drewry Container Port Insight (latest data point July 2013)

Annual container handling volume Monthly container handling volume

-25 %

-20 %

-15 %

-10 %

-5 %

0 %

5 %

10 %

15 %

20 %

25 %

Change Y/Y

0

100

200

300

400

500

600

700

19

90

19

91

19

92

19

93

19

94

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

Million teu

© 2010 Konecranes Plc. All rights reserved.

TRADE FINANCE

WHAT IS IT AT Konecranes?

Trade & Export Finance – sounds fancy…

• How to make sure that Konecranes is paid by the foreign Buyer!

• Advance Payments, Letter of Credits (D/C or SBLC)

• Bank Guarantees (bonds)

• Payment time to Buyer without any extra risk to Konecranes

– ECA:s, EBRD, NIB, IFC, banks

• Finance company products (rental, leasing)

• Trade policies

Matti Malminen / Trade Finance

© 2010 Konecranes Plc. All rights reserved.

HOW TO COVER CREDIT RISK OF THE BUYER

Know Your Customer!

Credit Policy!

1. 100 % Advance Payment

2. Confirmed Documentary Credit / Locally issued Bank Guarantee/

3. Confirmed Standby Letter of Credit

4. Unconfirmed Documentary Credit / Buyer’s direct Bank Guarantee

5. Documentary Collection

6. Payment on open account terms

(non payment risk of the Buyer can be covered by Credit Insurance)

Matti Malminen / Trade Finance

© 2013 Konecranes Plc. All rights reserved.

Export Finance

Main principle

Risk of the Buyer has to be covered

by “third parties”!

1. Export Credit Agency (ECA)

• Finnvera Plc in Finland, EKN in Sweden

2. Multilateral Finance Institution

• NIB (Nordic Investment Bank)

• EBRD (European Bank for Reconstruction &Development)

• IFC, Asian Development Bank, BNDES, etc etc

3. Credit Insurance Company

4. Buyer’s Bank

• Deferred Payment D/C, Bank Guarantee

Trade & Export Finance, Matti

Malminen 8

© 2013 Konecranes Plc. All rights reserved.

FINANCING – RELATIONSHIP WITH BUYER

• Loan from international Bank with Export Credit Agency (ECA) support

– ”Seller’s role is to be part of the Buyer’s procurement team”

• Key questions in the first meeting

– Which banks in Europe knows the Buyer?

– Has the Buyer concluded ECA –cases in the past (Finnvera, Finland, EKN,

Sweden)?

– Are the financials available?

• Open and explain all finance charges (Buyer will pay all charges)

• Agent Bank (Lender) should

– have experience with the relevant ECA

– be easy to access by the seller and the buyer

– be ready to to meet the buyer at an early stage (also ECA:s visit is appreciated)

Trade Finance / Matti Malminen

5 December 2013 9

© 2010 Konecranes Plc. All rights reserved.

Repayment

Supply Contract

(Delivery)

Credit

Agreement

Export credit guarantee

Interest equalisation

Refinancing

Agency agreement

BUYER BANK

BUYER’S CREDIT

Matti Malminen / Trade Finance

Loan proceeds

© 2010 Konecranes Plc. All rights reserved. Matti Malminen / Trade Finance

DEFERRED PAYMENT DOCUMENTARY CREDIT (D/C) 360

DAYS

11

5. SHIPMENT

1. CONTRACT $150,- (CRANEVALUE $100+ INTEREST

$50)

2. D/C

APPLICATION

$ 150,-

BUYER

ISSUING BANK

3. D/C ISSUANCE

8. SHIPPING DOCUMENTS

EXPORTER

ADVISING BANK /

CONFIRMING BANK

9. SHIPPING DOCUMENTS

DEBIT $ 150

after 360 d

4. ADVISING

(Confirmation)

6. Shipping documents

+ invoice $ 150,-

7. Payment of $150

(discounting)

./. interest for the

deferred payment

time apprx. $ 50

=> Net proceeds $100

© 2010 Konecranes Plc. All rights reserved. 12

Trade Finance => Exotic countries!