CARGOTEC CORPORATION, STOCK EXCHANGE RELEASE, 22 MAY 2024 AT 2:30 P.M. (EEST)
The Finnish Financial Supervisory Authority has approved the prospectus
concerning the partial demerger of Cargotec and listing of Kalmar
Cargotec Corporation ("Cargotec") announced on 1 February 2024 the approval of a
demerger plan concerning the partial demerger of Cargotec (the "Demerger Plan")
according to which all assets, debts and liabilities of Cargotec relating to the
Kalmar business area or mainly serving the Kalmar business area shall be
transferred without a liquidation procedure to Kalmar Corporation ("Kalmar")
(the "Demerger"), a company to be incorporated in the Demerger. The Board of
Directors of Cargotec has proposed that the Annual General Meeting of Cargotec
to be held on 30 May 2024 (the "AGM") would approve the Demerger Plan and
resolve upon the Demerger as set forth in the Demerger Plan. The completion of
the Demerger, which is subject to, among other things, the approval by the AGM,
is expected to be registered in the Finnish Trade Register on or about 30 June
2024, and trading in Kalmar's class B shares on the official list of Nasdaq
Helsinki Ltd ("Nasdaq Helsinki") is expected to begin on 1 July 2024 or as soon
as reasonably possible thereafter.
The Finnish Financial Supervisory Authority has today, on 22 May 2024, approved
the Finnish language demerger and listing prospectus prepared by Cargotec on
behalf of Kalmar concerning the Demerger and applying the class B shares in
Kalmar to be admitted on trading on the official list of Nasdaq Helsinki
("Prospectus"). The Prospectus, the English language translation thereof and the
Swedish language translation of the summary will be available on or about 23 May
2024 on Cargotec's website at https://www.cargotec.com/demerger and registered
office at Porkkalankatu 5, FI-00180 Helsinki, Finland. In addition, the
Prospectus and its English translation will be available in print at Nasdaq
Helsinki at Fabianinkatu 14, FI-00100 Helsinki, Finland on or about 23 May 2024.
The Prospectus contains the following previously unpublished information in
relation to Kalmar:
Kalmar's performance targets
Cargotec's Board of Directors has set the following performance targets for
Kalmar for 2028:
Financial targets
* Sales growth of 5 percent p.a. over the cycle;
* Comparable operating profit margin of 15 percent;
* Return on capital employed (ROCE) above 25 percent;
Capital structure and sustainability framework
* Aligned with SBTi targets with 1.5 C commitment;(1)
* Leverage(2) (Net debt to EBITDA) under 2x;
* Dividend payout ratio of 30-50 percent per annum.
The financial targets constitute forward-looking statements that are not
guarantees of future financial performance. Kalmar's actual results could differ
materially from the results presented in or implied by such forward-looking
statements as a result of numerous factors.
Kalmar's strategy
Kalmar's vision is to be the forerunner in sustainable material handling
equipment and services, moving goods in critical supply chains around the world.
Through its portfolio of efficient and decarbonised equipment, extensive service
offering, and deep-rooted industry expertise, Kalmar focuses on helping
customers to meet their sustainability and productivity targets.
Kalmar's industry and customers are facing pressure from different megatrends,
which drive renewal across the whole industry. Kalmar is committed to answer to
this pressure by solving the challenges customers face, the most significant of
which are:
* Safety
* Productivity
* Decarbonisation and electrification
* Changing logistics landscape
* Labour shortage
* Intelligent operations
To address these challenges, Kalmar is focusing on the following three strategic
areas:
* Investing in sustainable innovations: Kalmar focuses on investing in
sustainable innovation in the area of decarbonised and electric equipment,
and equipment with driver assistance and autonomous functions, enabled by
data, digital and AI capabilities to maximise uptime and increase
productivity, which has a potential for lower total cost of ownership.
* Growing services: Kalmar is close to customers around the world, which
Kalmar sees as a clear competitive advantage. Kalmar sees a significant
potential to grow services sales, due to its large installed base, global
network of service technicians and unique industry experience from a
significant fleet of connected equipment globally.
* Driving excellence: Kalmar aims to improve profitability and cash flow
generation to fund further investments into R&D and organic growth,
inorganic growth and distributing profits to shareholders. The improved
profitability is planned to originate from commercial and operational
excellence actions that include active pricing management, supply chain and
process optimisation and continuous focus on competitive operational cost-
base.
Kalmar's key strengths
Cargotec's management believes that particularly the following factors are
Kalmar's key strengths and represent competitive advantages:
Global leader in an attractive market for mission-critical heavy material
handling
Kalmar has a leading position in the heavy material handling market.(3) In the
view of the management, Kalmar's strong position is based on Kalmar's presence
at the mission-critical heavy material handling operations of its customer, in
addition to a well-known brand, as well as on Kalmar's ability to address its
customers' need for efficiency, reliability, safety and sustainability. The
management believes that Kalmar will benefit from the industry transformation,
creating new customer demand in new use cases and market segments as well as in
electric and autonomous and operator assisted equipment.
Partnering long-term with our customers to deliver a stronger impact
Kalmar sees that its customers, which are operating in the industries focusing
on the heavy materials handling needs, are constantly looking for ways to
improve efficiency and productivity, optimise uptime, have safer working
environments and look for sustainability improvements and decarbonisation in
operations, together resulting in lowered total cost of ownership. Through its
advanced solutions and partnership approach, Kalmar helps its customers to
achieve these goals. Kalmar has not lost any of its top 20 customers since
2016(4) and has received repeat orders from its customers concerning its
electric offering. Through the close relationships with customers and leveraging
the network of more than 1,300 global service technicians and presence in over
120 countries(5), Kalmar is able to help and support its customers on optimising
the usage of their Kalmar equipment.
Geared to grow by making the industry more electrified, intelligent and
sustainable
The market shift towards electrification is expected to be highly beneficial for
Kalmar. Of Kalmar's customers, 63 percent say that they are planning to invest
in zero- or low-emission heavy material handling equipment by 2028. In the view
of the management, Kalmar is a leader in electric equipment, especially in
medium and heavy electric forklift trucks and straddle carriers, and in addition
Kalmar is well-positioned to benefit from the ongoing transition in the heavy
material handling industry towards electrification and sustainability.
Significant services growth upside from large installed base and innovation-
enabled offering
The management believes that focusing on the service offering will benefit
Kalmar due to the profitability and growth potential of the services business.
Kalmar has an active and growing installed base of 65,000 machines globally of
which more than 13,000 are connected machines, and a network of more than 1,300
service technicians, enabling Kalmar to maximise current potential from the
existing installed base while providing upside from new services and business
models, and new services linked to ongoing electrification.
Driving excellence to target best-in-class commercial performance and cost
efficiency
Kalmar is focused on increasing the efficiency of its operations through a
combination of continuous portfolio management and ongoing commercial and
operational excellence actions. These improvements are aimed to be achieved by
product cost optimisations, pricing management, supply chain development,
process improvement actions and cost-saving actions, for example.
Significant sales growth and profitability potential enabled by strong financial
profile
Kalmar is committed to sustainable and profitable growth. Kalmar has been able
to grow above the market in recent years, which has also supported higher
profitability. Kalmar's strong financial position is enabled by Kalmar's asset
light business model, as majority of the operations are assembly-only, with only
selected key components manufactured in-house.
Further information on Kalmar's strategy and key strengths is presented in the
Prospectus.
Future Outlook
This section, Future Outlook, contains forward-looking statements. These
statements are not guarantees of Kalmar's financial performance in the future.
Kalmar's actual result of operations and financial position could differ
materially from those expressed or implied by these forward-looking statements
as a result of many factors. Undue reliance should not be placed on these
forward-looking statements.
Kalmar's unaudited guidance set out below has been prepared on a basis which is
(i) comparable to Kalmar's historical carve-out financial information and (ii)
consistent with the principles applied in preparing Kalmar's carve-out financial
statements.
Kalmar's guidance set out below is based on, inter alia, the estimates and
assumptions made by the Board of Directors as regards the order intake outlook,
customer activity and margin estimates, the workload of the operations, the cost
estimations and other similar items. The key factors affecting the results of
operations that Kalmar can affect are, for example, pricing, efficiency and
scope of its own operations, product and service quality, research and
development operations, new products and services, personnel know-how, ability
and resources to create successful subcontractor and supplier relationships as
well as the ability to foresee and respond to changing demand. Factors beyond
Kalmar's control are, e.g., the timing of customers' purchase decisions,
customer activity and demand, inflation in raw material prices and
subcontracting, availability of components and raw materials, competitors'
actions, general economic development, confidence in Kalmar's products and
services as well as the quality, availability, delivery times and pricing of
subcontractors or suppliers. Kalmar's guidance includes the following
uncertainties that may materially change the outcome of the guidance:
development of order intake, changes in customer activity, customers' investment
decisions and delays thereof, changes in the size and margins of the backlog,
changes in cost estimations, development of service business and changes in
general economic situation.
Guidance for 2024
According to the guidance published by Cargotec on 1 February 2024, the
comparable operating profit margin of Cargotec's Kalmar business is estimated(6)
to be above 11 percent in 2024. Kalmar estimates that the costs incurred from
operating as an independent company after the Demerger will have a negative
effect of approximately 1-2 percentage points annually as compared to the result
of Cargotec's Kalmar business. The comparable operating profit margin of
Cargotec's Kalmar business was 13.5 percent during the first quarter of 2024.
Certain unaudited pro forma financial information of Kalmar
The unaudited pro forma financial information included in the Prospectus (the
"Unaudited Pro Forma Financial Information") illustrates the effects of the
Demerger to Kalmar's carve-out financial information had the Demerger been
consummated at an earlier point in time. The Unaudited Pro Forma Financial
Information is for illustrative purposes only. The Prospectus also includes an
independent practitioner's assurance report on the compilation of pro forma
financial information included in the Prospectus prepared in accordance with the
Annex 20 to the Commission Delegated Regulation (EC) N:o 2019/980.
The unaudited pro forma combined statement of income for the financial year
ended 31 December 2023 and the unaudited pro forma combined statement of income
for the three months ended 31 March 2024 give effect to the Demerger as if it
had occurred on 1 January 2023. The unaudited pro forma combined balance sheet
as at 31 March 2024 illustrates the impact of the Demerger as if it had occurred
on that date.
Because of its nature, the Unaudited Pro Forma Financial Information illustrates
what the hypothetical impact would have been if the Demerger had been
consummated at the date assumed in the Unaudited Pro Forma Financial
Information, and, therefore, does not represent the actual results of operations
or financial position of Kalmar. The Unaudited Pro Forma Financial Information
is not intended to project the results of operations or financial position of
Kalmar as of any future date and does not represent the results of operations or
financial position had Kalmar been an independent listed company for the periods
presented.
The pro forma business area information presented in the Unaudited Pro Forma
Financial Information has been prepared to illustrate Kalmar's two reportable
segments Equipment and Services and Other following to the completion of the
Demerger. Kalmar will report its business area results using operating profit
and comparable operating profit as the main operating measure.
The following table sets forth the unaudited key figures presented on a pro
forma basis for the periods indicated:
1
January
to
31
March For the
2024
or financial
as
at year
31
ended 31
March December
In EUR million, unless otherwise indicated 2024
2023
Sales, total..............................................................
439.1 2,049.6
Equipment sales.....................................................
303.1 1,441.5
Services sales.........................................................
136.0 567.1
EBITDA..................................................................
67.7 261.1
Operating profit.......................................................
54.0 203.8
Operating profit, % of sales.................................
12.3 % 9.9 %
Equipment operating profit.....................................
39.3 201.8
Services operating profit........................................
22.8 95.6
Comparable operating profit..................................
54.0 255.0
Comparable operating profit, % of sales.............
12.3 % 12.4 %
Equipment comparable operating profit.................
39.3 201.8
Equipment comparable operating profit, % of sales
13.0 % 14.0 %
Services comparable operating profit....................
22.8 95.6
Services comparable operating profit, % of
sales.....................................................................
16.7 % 16.9 %
Profit for the period.................................................
36.9 152.4
Profit for the period, % of sales...........................
8.4 % 7.4 %
Earnings per share, EUR.......................................
0.57 2.37
Comparable profit for the period............................
36.9 193.4
Comparable profit for the period, % of sales.......
8.4 % 9.4 %
Comparable earnings per share, EUR ..................
0.57 3.01
Total assets............................................................
1,704.0
Total equity.............................................................
526.1
Interest-bearing net debt........................................
145.0
Interest-bearing net debt / EBITDA.......................
1.79
Gearing, % .............................................................
27.6 %
The Unaudited Pro Forma Financial Information has been attached in full to this
release.
Certain carve-out financial information of Kalmar
The Prospectus includes audited Kalmar carve-out financial statements as at and
for the years ended 31 December 2023, 2022 and 2021, and the unaudited carve-out
financial information of Kalmar as at and for the three months ended 31 March
2024, including unaudited comparative financial information as at and for the
three months ended 31 March 2023. Kalmar's carve-out financial information has
been attached in full to this release.
The Kalmar carve-out financial statements as at and for the years ended 31
December 2023, 2022 and 2021 have been audited by Ernst & Young Oy, Authorised
Public Accountants, with Authorised Public Accountant Heikki Ilkka as the
auditor with the principal responsibility.
The Kalmar carve-out financial statements for the financial years ended 31
December 2023, 2022 and 2021 have been prepared on a carve-out basis from
Cargotec's audited consolidated financial statements and the carve-out financial
information for the three months ended 31 March 2024 on a carve-out basis from
Cargotec's unaudited consolidated interim financial information using the
historical income and expenses, assets and liabilities and cash flows
attributable to the Kalmar business. The carve-out financial statements also
include the allocation of income, expense, assets, liabilities and cash flows
which are based on management judgement, assumptions and estimates. The most
significant estimates, judgements and assumptions relate to the allocation of
the costs of certain centrally provided shared services, leasing arrangements
and shared assets, cash management and financing, determination of current and
deferred income taxes and invested equity.
The Kalmar carve-out financial statements have been prepared in accordance with
IFRS Accounting Standards as adopted by the European Union, under consideration
of the principles for determining which assets and liabilities, income and
expenses as well as cash flows are to be assigned to Kalmar as described in Note
1 under the section "Background and basis of preparation" of the audited carve-
out financial statements as at and for the years ended 31 December 2023, 2022
and 2021. The unaudited carve-out financial information of Kalmar as at and for
the three months ended 31 March 2024, including unaudited comparative carve-out
financial information as at and for the three months ended 31 March 2023 have
been prepared in accordance with "IAS 34 - Interim Financial Reporting" under
the same carve-out considerations as described above.
Accordingly, the carve-out financial information of Kalmar does not necessarily
reflect what Kalmar's results of operations, financial position or cash flows
would have been had Kalmar operated as an independent company and had it
presented stand-alone financial information during the periods presented.
Moreover, the carve-out financial information of Kalmar may not be indicative of
Kalmar's future results of operations, financial position or cash flows.
The following table details certain carve-out financial information for Kalmar
derived from the Prospectus:
As at 31 March
|As at and for the year
and 1 January
|ended
to 31 March
|31 December
|
In EUR million, unless otherwise indicated 2024 2023
|2023 2022 2021
|
(unaudited) |
(audited)
|
Combined statement of income |
|
Sales, total.................................. 439.1
485.3|2,049.6 1,942.8 1,512.2
|
Operating profit.......................... 45.8 55.9|
240.2 118.3 320.8
|
Operating profit, % of sales..... 10.4 11.5|
11.7 6.1 21.2
|
Comparable operating profit...... 53.9 56.3|
254.7 168.9 100.3
|
Comparable operating profit, % of |
sales........................................ 12.3 11.6|
12.4 8.7 6.6
|
Profit for the period..................... 33.4 44.9|
193.8 92.6 261.5
|
Profit for the period, % of |
sales................................................. 7.6 9.3|
9.5 4.8 17.3
|
Combined balance sheet |
|
Total assets................................ 1,866.9
1,965.2|1,846.1 1,904.5 1,759.7
|
Total invested equity.................. 868.0 923.3|
818.2 853.0 776.0
|
Combined statement of cash flows |
|
Cash flow from operating |
activities.................................................... 84.0 -11.5|
221.3 162.0 72.8
|
Cash flow from investing |
activities.................................................... -9.0 -9.9|
-43.3 -13.6 347.5
|
Cash flow from financing |
activities.................................................... -75.0 9.1|
-193.7 -150.8 -387.5
Definitions and Reasons for the Use of Financial Key Indicators
Key figure Definition Reason for the use
-------------------------------------------------------------------------------
Operating profit (MEUR Sales - cost of goods sold Operating profit is used
and % of sales) - selling and marketing to measure business
expenses - research and profitability. It
development expenses - describes the
administration expenses - profitability of the
restructuring costs + business before taking
other operating income - into account financial
other operating expenses + items and taxes.
share of associated
companies' net income
-------------------------------------------------------------------------------
Comparable operating Operating profit excluding Comparable operating
profit (MEUR and % of items affecting profit is used to monitor
sales) comparability and forecast profit
development and set
related targets. It is
calculated by excluding
items affecting
comparability from
operating profit and non-
core business, which
makes it easier to
compare the profitability
of the business at
different time periods.
-------------------------------------------------------------------------------
Restructuring costs and Items affecting Factor used to calculate
other items affecting comparability include Comparable operating
comparability (MEUR) restructuring costs and profit.
other items affecting
comparability such as
significant capital gains
and losses, gains and
losses related to
acquisitions and
disposals, acquisition and
integration costs, costs
related to the planned
partial demerger from
Cargotec and related
listing costs, impairments
and reversals of
impairments of assets, and
costs that are related to
aforementioned items.
Shareholders and prospective investors are instructed to acquaint themselves
with the entire Prospectus in addition to this stock exchange release.
Advisers to Cargotec and Kalmar
Goldman Sachs International, Danske Bank A/S, Finland Branch and BNP PARIBAS are
acting as the financial advisers to Cargotec, PricewaterhouseCoopers Oy is
acting as the separation, tax, legal structuring and financial reporting
adviser, Hannes Snellman Attorneys Ltd is acting as the legal adviser in
relation to Finnish law and Skadden, Arps, Slate, Meagher & Flom (UK) LLP in
relation to U.S. law, and Miltton Ltd is acting as a communications adviser in
relation to the Demerger and the listing of Kalmar.
Capital Markets Day
Cargotec will host a capital markets day focusing on Kalmar on 29 May 2024. More
information and registration are available on www.cargotec.com/cmd24
(http://www.cargotec.com/cmd24).
Cargotec Corporation
Board of Directors
For more information:
Carina Geber-Teir, Head of Investor Relations and Communications, Kalmar, tel.
+358 40 502 4697
Aki Vesikallio, Vice President, Investor Relations, Cargotec, tel.
+358 40 729 1670
Appendices:
* Unaudited Pro Forma Financial Information of Kalmar;
* Kalmar's audited carve-out financial statements as at and for the years
ended 31 December 2023, 2022 and 2021 and the auditor's report thereto;
* Kalmar's unaudited interim carve-out financial information as at and for the
three months ended 31 March 2024.
About Kalmar
Kalmar's vision is to be the forerunner in sustainable material handling
equipment and services, moving goods in critical supply chains around the world.
Kalmar offers a wide range of industry shaping heavy material handling equipment
and services to ports and terminals, distribution centres, manufacturing and
heavy logistics. Kalmar operates globally in over 120 countries, the company's
sales on a carve-out basis in 2023 totalled approximately EUR 2.1 billion and it
employed around 5,000 people on a carve-out basis as at 31 March 2024.
www.kalmarglobal.com
About Cargotec
Cargotec (Nasdaq Helsinki: CGCBV) enables smarter cargo flow for a better
everyday with its leading cargo handling solutions and services. Cargotec's
business areas Kalmar, Hiab and MacGregor are pioneers in their fields. Through
their unique position in ports, at sea and on roads, they optimise global cargo
flows and create sustainable customer value. Cargotec has signed the United
Nations Global Compact Business Ambition for 1.5C. The company's sales in 2023
totalled approximately EUR 4.6 billion and it employs around 11,300 people.
www.cargotec.com
Disclaimer
The securities referred to herein have not been and will not be registered under
the U.S. Securities Act of 1933 ("US Securities Act"), or any U.S. state
securities laws, and may not be offered or sold in the United States, unless
such securities are registered under the US Securities Act, or pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements under the US Securities Act and applicable state or local
securities laws.
TheKalmar shares have not been approved or disapproved by the US Securities and
Exchange Commission, any state securities commission or any other regulatory
authority in the United States, nor have any of the foregoing authorities passed
comment upon, or endorsed the merit of, the Demerger or the accuracy or the
adequacy of the information contained in this release or in the Prospectus. Any
representation to the contrary is a criminal offense under U.S. law. Neither
Cargotec nor Kalmar intend to register securities in the United States or to
conduct a public offering of securities in the United States.
The financial advisers are acting for Cargotec and no one else in connection
with the Demerger and will not be responsible to anyone other than Cargotec for
providing the protections afforded to clients of the financial advisers, or for
giving advice in connection with the Demerger or any other matter.
Forward-looking Statements
The release includes forward-looking statements within the meaning of Section
27A of the US Securities Act and Section 21E of the U.S. Securities Exchange Act
of 1934, including expected performance targets, and are based on present plans,
estimates, projections and expectations and are not guarantees of future
performance. These forward-looking statements are subject to numerous risks,
uncertainties and assumptions, including risks relating to the contemplated
Demerger and its completion, risks relating to Kalmar's industry, business, the
risk that Kalmar's actual results of operations in future periods may differ
materially from (and be more negative than) the expected results or performance
targets discussed, or suggested, herein. These forward-looking statements
reflect knowledge and information available at, and speak only as of, the date
they are made, which, even though they seem to be reasonable at present, may
turn out to be incorrect. Except as required by law, Cargotec undertakes no
obligation to update or revise publicly any forward-looking statements, whether
as a result of new information, future events or otherwise, after the date
hereof or to reflect the occurrence of unanticipated events. Readers are
cautioned not to place undue reliance on such forward-looking statements.
Readers should review the section entitled "Risk Factors" and the description of
Kalmar's business in the section entitled "Business of Kalmar", each in the
Prospectus, for a more complete discussion of the risks and factors that could
affect us, the Demerger and/or Kalmar.
--------------------------------------------------------------------------------
(1) Plan following criteria of the Science Based Targets initiative
(confirmation of the target will be sought).
(2) Including IFRS 16.
(3) Source: Market study by KPMG (in respect of equipment market). Kalmar is a
market leader across terminal tractors, straddle carriers, crane spreaders and
reachstackers and empty container handlers, and one of the leaders for medium
and heavy forklift trucks based on equipment volume (average in 2022-2023) and
spare parts capture rate of 29 percent in the first quarter of 2024.
(4) Kalmar's customers, who have placed at least one order per year since 2016
(annually recurring orders as a criterion).
(5) Including Kalmar's dealers.
(6) The 2024 profitability outlook for Cargotec's Kalmar business is presented
using the same principles which are applied by Cargotec in the 2023 external
financial reporting.
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