CARGOTEC CORPORATION, INTERIM REPORT JANUARY-MARCH 2024, 30 APRIL 2024 AT 9:00
AM (EEST)
Cargotec's interim report January-March 2024: Comparable operating profit margin
improved in all business areas
* Sequentially stable demand in Hiab and Kalmar, Hiab's orders amounted to EUR

    386 million and Kalmar's EUR 402 million
  * MacGregor's merchant and services businesses' good performance continued,
    challenges remain in offshore projects
  * Hiab's comparable operating profit margin was 16.6 (14.2), Kalmar's 13.5
    (13.0) and MacGregor's 6.0 (0.4) percent
  * All business areas improved their cash flow, combined cash flow from
    operations before finance items and taxes totalled EUR 174 (26) million
  * Demerger is progressing according to the plan

Continuing operations' January-March 2024 in brief: Comparable operating profit
increased

  * Orders received increased by 11 percent and totalled EUR 653 (588) million.
  * Order book amounted to EUR 1,799 (31 Dec 2023: 1,788) million at the end of
    the period.
  * Sales increased by 5 percent and totalled EUR 617 (589) million.
  * Service sales increased by 3 percent and totalled EUR 207 (200) million.
  * Service sales represented 33 (34) percent of consolidated sales.
  * Eco portfolio sales decreased by 6 percent and totalled EUR 174 (186)
    million.
  * Eco portfolio sales represented 28 (32) percent of consolidated sales.

* Operating profit was EUR 70 (42) million, representing 11.3 (7.1) percent of sales. The operating profit includes items affecting comparability worth EUR

    -2 (-8) million.
  * Comparable operating profit increased by 43 percent and amounted to EUR 71
    (50) million, representing 11.5 (8.4) percent of sales.
  * Profit for the period amounted to EUR 47 (24) million.
  * Basic earnings per share was EUR 0.73 (0.37).
  * Cash flow from operations before finance items and taxes totalled EUR 174
    (26) million.(1)

Outlook for 2024 unchanged
Cargotec estimates(2) Hiab's comparable operating profit margin in 2024 to be
above 12 percent, Kalmar's comparable operating profit margin in 2024 to be
above 11 percent, and
MacGregor's comparable operating profit in 2024 to improve from 2023 (EUR 33
million).
Kalmar is presented as discontinued operations due to the proposed demerger
As announced in a stock exchange release on 1 February 2024, the Board of
Directors of Cargotec Corporation ("Cargotec") has approved a demerger plan
concerning the separation of the Kalmar business area into an independent listed
company (the "Demerger"). The planned completion date of the Demerger is 30 June
2024. The Demerger is subject to approval by the Annual General Meeting of
Cargotec to be held on 30 May 2024. Certain major shareholders of Cargotec,
including Wipunen varainhallinta oy, Mariatorp Oy, Pivosto Oy and Kone
Foundation, holding in the aggregate approximately 41 percent of the shares and
approximately 75 percent of the votes in Cargotec, have indicated their support
for the proposed Demerger.
Due to the proposed Demerger, Cargotec presents the Kalmar business area as
discontinued operations under IFRS 5 Non-current Assets held for Sale and
Discontinued operations starting from the first quarter of 2024 and published
restated quarterly financial information on its 2023 financials on 8 April
2024. These restated financials constitute comparative information for Cargotec
when the Kalmar business area is presented as discontinued operations.
Under IFRS 5, the result from discontinued operations is reported separately
from continuing operations' income and expenses in the consolidated statement of
income. Comparative periods are restated accordingly. The consolidated balance
sheet is not restated. The presented discontinued operations include revenue and
operating expenses directly related to the Kalmar business area and other income
and costs related to continuing operations that are not expected to continue
after the Demerger, or would have been avoided without the Demerger. As a
result, financial information presented for Cargotec as continuing and Kalmar
business area as discontinued operations do not reflect the past or future
profitability of either business on a stand-alone basis before the Demerger or
after it.
Contrary to the presentation method according to IFRS 5, in the presented
segment information, Kalmar's profit is still reported according to the normal
calculation method, taking depreciation and amortisation into account.
The restated financial information included in this release is unaudited.
Continuing operations' key figures
+-------------------------+-------------+------------+------------+------------+
|MEUR | Q1/24| Q1/23| Change| 2023| +-------------------------+-------------+------------+------------+------------+
|Orders received | 653| 588| 11%| 2,282| +-------------------------+-------------+------------+------------+------------+
|Service orders received | 205| 219| -6%| 787| +-------------------------+-------------+------------+------------+------------+
|Order book, end of period| 1,799| 2,078| -13%| 1,788| +-------------------------+-------------+------------+------------+------------+
|Sales | 617| 589| 5%| 2,519| +-------------------------+-------------+------------+------------+------------+
|Service sales | 207| 200| 3%| 806| +-------------------------+-------------+------------+------------+------------+
|Service sales, % of sales| 33%| 34%| | 32%| +-------------------------+-------------+------------+------------+------------+
|Eco portfolio sales | 174| 186| -6%| 797| +-------------------------+-------------+------------+------------+------------+
|Eco portfolio sales, % of| | | | | |sales | 28%| 32%| | 32%| +-------------------------+-------------+------------+------------+------------+
|Operating profit | 69.7| 41.7| 67%| 236.0| +-------------------------+-------------+------------+------------+------------+
|Operating profit, % | 11.3%| 7.1%| | 9.4%| +-------------------------+-------------+------------+------------+------------+
|Comparable operating | | | | | |profit | 71.2| 49.7| 43%| 236.7| +-------------------------+-------------+------------+------------+------------+
|Comparable operating | | | | | |profit, % | 11.5%| 8.4%| | 9.4%| +-------------------------+-------------+------------+------------+------------+
|Profit before taxes | 68.2| 35.4| 93%| 219.5| +-------------------------+-------------+------------+------------+------------+
|Profit for the period | 47.1| 23.7| 98%| 162.4| +-------------------------+-------------+------------+------------+------------+
|Basic earnings per share,| | | | | |EUR | 0.73| 0.37| 98%| 2.49| +-------------------------+-------------+------------+------------+------------+
Discontinued operations' key figures*
+-----------------------+-------------+-------------+------------+-------------+
|MEUR | Q1/24| Q1/23| Change| 2023| +-----------------------+-------------+-------------+------------+-------------+
|Orders received | 402| 471| -15%| 1,705| +-----------------------+-------------+-------------+------------+-------------+
|Service orders received| 156| 143| 9%| 545| +-----------------------+-------------+-------------+------------+-------------+
|Order book, end of | | | | | |period | 972| 1,389| -30%| 1,024| +-----------------------+-------------+-------------+------------+-------------+
|Sales | 439| 485| -10%| 2,049| +-----------------------+-------------+-------------+------------+-------------+
|Service sales | 137| 146| -7%| 574| +-----------------------+-------------+-------------+------------+-------------+
|Service sales, % of | | | | | |sales | 31%| 30%| | 28%| +-----------------------+-------------+-------------+------------+-------------+
|Eco portfolio sales | 176| 160| 10%| 718| +-----------------------+-------------+-------------+------------+-------------+
|Eco portfolio sales, % | | | | | |of sales | 40%| 33%| | 35%| +-----------------------+-------------+-------------+------------+-------------+
|Operating profit | 49.9| 62.3| -20%| 247.8| +-----------------------+-------------+-------------+------------+-------------+
|Operating profit, % | 11.4%| 12.8%| | 12.1%| +-----------------------+-------------+-------------+------------+-------------+
|Comparable operating | | | | | |profit | 65.6| 62.7| 5%| 276.7| +-----------------------+-------------+-------------+------------+-------------+
|Comparable operating | | | | | |profit, % | 14.9%| 12.9%| | 13.5%| +-----------------------+-------------+-------------+------------+-------------+
|Profit before taxes | 47.0| 60.3| -22%| 233.5| +-----------------------+-------------+-------------+------------+-------------+
|Profit for the period | 34.2| 48.9| -30%| 186.2| +-----------------------+-------------+-------------+------------+-------------+
|Basic earnings per | | | | | |share, EUR | 0.53| 0.76| -30%| 2.89| +-----------------------+-------------+-------------+------------+-------------+
*Due to Kalmar business area's classification as discontinued operations,
suspended depreciation and amortisation starting from 1 February 2024 had a
positive EUR 6.6 million impact on the presented result figures before taxes and
EUR 4.9 million positive impact on the result after taxes. Comparative
information is not restated accordingly.
Cargotec's key figures*
+-----------------------+-------------+-------------+------------+-------------+
|MEUR | Q1/24| Q1/23| Change| 2023| +-----------------------+-------------+-------------+------------+-------------+
|Orders received | 1,054| 1,059| 0%| 3,987| +-----------------------+-------------+-------------+------------+-------------+
|Service orders received| 361| 362| 0%| 1,331| +-----------------------+-------------+-------------+------------+-------------+
|Order book, end of | | | | | |period | 2,770| 3,467| -20%| 2,812| +-----------------------+-------------+-------------+------------+-------------+
|Sales | 1,056| 1,074| -2%| 4,569| +-----------------------+-------------+-------------+------------+-------------+
|Service sales | 343| 346| -1%| 1,379| +-----------------------+-------------+-------------+------------+-------------+
|Service sales, % of | | | | | |sales | 32%| 32%| | 30%| +-----------------------+-------------+-------------+------------+-------------+
|Eco portfolio sales | 350| 346| 1%| 1,515| +-----------------------+-------------+-------------+------------+-------------+
|Eco portfolio sales, % | | | | | |of sales | 33%| 32%| | 33%| +-----------------------+-------------+-------------+------------+-------------+
|Operating profit | 119.6| 104.0| 15%| 483.8| +-----------------------+-------------+-------------+------------+-------------+
|Operating profit, % | 11.3%| 9.7%| | 10.6%| +-----------------------+-------------+-------------+------------+-------------+
|Comparable operating | | | | | |profit | 136.8| 112.4| 22%| 513.3| +-----------------------+-------------+-------------+------------+-------------+
|Comparable operating | | | | | |profit, % | 13.0%| 10.5%| | 11.2%| +-----------------------+-------------+-------------+------------+-------------+
|Profit before taxes | 115.3| 95.7| 20%| 453.0| +-----------------------+-------------+-------------+------------+-------------+
|Cash flow from | | | | | |operations before | | | | | |finance items and taxes| 173.9| 26.5| > 100%| 544.2| +-----------------------+-------------+-------------+------------+-------------+
|Profit for the period | 81.2| 72.6| 12%| 348.7| +-----------------------+-------------+-------------+------------+-------------+
|Basic earnings per | | | | | |share, EUR | 1.26| 1.13| 12%| 5.38| +-----------------------+-------------+-------------+------------+-------------+
|Interest-bearing net | | | | | |debt, end of period | 57| 393| -86%| 179| +-----------------------+-------------+-------------+------------+-------------+
|Gearing, % | 3.1%| 26.4%| | 10.2%| +-----------------------+-------------+-------------+------------+-------------+
|Interest-bearing net | | | | | |debt / EBITDA** | 0.1| 1.0| | 0.3| +-----------------------+-------------+-------------+------------+-------------+
|Return on capital | | | | | |employed (ROCE), last | | | | | |12 months, % | 21.1%| 7.5%| | 19.9%| +-----------------------+-------------+-------------+------------+-------------+
|Personnel, end of | | | | | |period | 11,266| 11,640| -3%| 11,391| +-----------------------+-------------+-------------+------------+-------------+
*Due to Kalmar business area's classification as discontinued operations,
suspended depreciation and amortisation starting from 1 February 2024 had a
positive EUR 6.6 million impact on the presented result figures before taxes and
EUR 4.9 million positive impact on the result after taxes. Comparative
information is not restated accordingly.
** Last 12 months' EBITDA
Cargotec's President and CEO Casimir Lindholm: Fifth consecutive quarter with
good results, demerger progressing according to the plan
The first quarter of 2024 provided a strong start for the year. Hiab, Kalmar and
MacGregor all improved their comparable operating profit margins. All businesses
combined our comparable operating profit amounted to EUR 137 million, and we
delivered the best first quarter in Cargotec's history. This was the fifth
consecutive quarter with good results, despite complex business environment.
Solid execution continued across business areas and the results were also
supported by cost saving actions we launched in October last year. The actions
are now to a large extent implemented and we foresee EUR 60 million annual
savings for Cargotec in total in 2024 instead of the original estimate of EUR
50 million.
In Kalmar, strong profitability continued and demand was stable for the third
quarter in a row. Kalmar's orders received amounted to EUR 402 million. Demand
for mobile equipment used in industrial operations and small- and mid-sized
terminals remained good and we continue to see delayed decision making in larger
orders and destocking in the distribution customer segment. Kalmar's sales
declined by 10 percent from the previous year and amounted to EUR 439 million,
impacted by lower order intake in the second half of last year. However,
Kalmar's comparable operating profit margin increased to 13.5 percent as cost
saving actions announced in October last year offset the decline in sales.
Kalmar's comparable operating profit amounted to EUR 59 million.
In Hiab, the quarter was the sixth quarter in a row with a stable level of
demand and orders received amounted to EUR 386 million. Hiab's sales decreased
slightly to EUR 415 million while service sales continued to grow. Despite lower
sales, Hiab's comparable operating profit increased by 12 percent and amounted
to EUR 69 million, corresponding 16.6 percent of sales, driven by successful
management of inflationary pressures and tight cost control.
MacGregor's merchant and services businesses continued to perform well. Orders
received increased by 29 percent to EUR 267 million. Orders included a sizable
order with a value of almost EUR 50 million. MacGregor's order book continued to
increase and now exceeds EUR 1 billion. MacGregor's sales increased by 29
percent to EUR 203 million, driven by increased deliveries to merchant vessels,
leading the comparable operating profit to improve to EUR 12 million,
representing 6.0 percent of sales.
MacGregor's core businesses merchant and services performed well and, excluding
the offshore business, MacGregor's comparable operating profit margin in the
first quarter would have been around 11 percent. However, we still have
challenges in approximately 10 loss making offshore pilot projects containing
advanced technologies. In addition, MacGregor has an ongoing dispute related to
one monopile installation vessel project. We have not been committing to any new
pilot projects in the past quarters and we have been executing a restructuring
programme to turn around the offshore business. At the end of the first quarter,
MacGregor's offshore equipment related order book has been reduced to EUR 87
(134) million.
All segments combined, we generated a strong operative cash flow of EUR 174
million, leading to a reduction of our net debt to EUR 57 million. Hence, our
gearing is only 3 percent, giving an excellent foundation for our businesses in
their planned standalone future.
The planned separation of our core businesses Kalmar and Hiab into two world-
leading standalone companies is progressing according to the plan, and we are
expecting to reach major milestones this year. The completion date of the
demerger is expected to be 30 June 2024. Alongside the separate listing of
Kalmar, we will focus on finding a solution for MacGregor and preparing Hiab to
become a standalone company.
Cargotec's Board of Directors approved the demerger plan on 1 February. Since
the approval of the plan, we have proceeded steadily. On the first day of April,
Sami Niiranen started as President of Kalmar. We have also published notice to
our Annual General Meeting to be held on 30 May where the formal decision on the
transaction will be taken. Certain shareholders, representing approximately 41
percent of the shares and approximately 75 percent of the votes in Cargotec,
have already indicated their support for the proposed demerger.
The AGM will also elect both Cargotec's and Kalmar's Boards of Directors. There
would be no overlap between the Boards of Cargotec and Kalmar. Furthermore, a
Shareholders' Nomination Board would be established for Kalmar.
Due to the high certainty of the transaction, Kalmar is reported as discontinued
operations since the beginning of the year. Hence, the combined financial
targets set in November 2022 for Kalmar and Hiab are no longer valid. Cargotec's
climate target to reduce greenhouse gas emissions in all three emission scopes
by at least 50 percent by 2030 compared to a 2019 baseline remains valid. The
target is validated by the Science Based Targets initiative. We plan to publish
new long term performance targets for Hiab and Kalmar in May. The prospectus,
which discloses more details on the standalone Kalmar, is also planned to be
published in May ahead of the AGM.
Hiab's and Kalmar's Capital Market Days will be held on 28 and 29 May and I
warmly welcome you to follow the events virtually.
Reporting segments' key figures
Orders received
+------------------------------------------------+-----+-----+-----------+-----+
|MEUR |Q1/24|Q1/23| Change| 2023| +------------------------------------------------+-----+-----+-----------+-----+
|Kalmar | 402| 471| -15%|1,705| +------------------------------------------------+-----+-----+-----------+-----+
|Hiab | 386| 380| 1%|1,466| +------------------------------------------------+-----+-----+-----------+-----+
|MacGregor | 267| 208| 29%| 816| +------------------------------------------------+-----+-----+-----------+-----+
|Internal orders | 0| 0| | 0| +------------------------------------------------+-----+-----+-----------+-----+
|Cargotec, total |1,054|1,059| 0%|3,987| +------------------------------------------------+-----+-----+-----------+-----+
|Adjustment items related to discontinued | | | | | |operations | 402| 471| -15%|1,705| +------------------------------------------------+-----+-----+-----------+-----+
|Continuing operations, total | 653| 588| 11%|2,282| +------------------------------------------------+-----+-----+-----------+-----+
Order book
+-----------------------------------------------+-----------+-----------+------+
|MEUR |31 Mar 2024|31 Dec 2023|Change| +-----------------------------------------------+-----------+-----------+------+
|Kalmar | 971| 1,024| -5%| +-----------------------------------------------+-----------+-----------+------+
|Hiab | 770| 799| -4%| +-----------------------------------------------+-----------+-----------+------+
|MacGregor | 1,028| 988| 4%| +-----------------------------------------------+-----------+-----------+------+
|Internal order book | 1| 1| | +-----------------------------------------------+-----------+-----------+------+
|Cargotec, total | 2,770| 2,812| -1%| +-----------------------------------------------+-----------+-----------+------+
|Adjustment items related to discontinued | | | | |operations | 972| 1,024| -5%| +-----------------------------------------------+-----------+-----------+------+
|Continuing operations, total | 1,799| 1,788| 1%| +-----------------------------------------------+-----------+-----------+------+
Sales
+---------------------------------------------------+-----+-----+------+-----+
|MEUR |Q1/24|Q1/23|Change| 2023|
+---------------------------------------------------+-----+-----+------+-----+
|Kalmar | 439| 485| -10%|2,050|
+---------------------------------------------------+-----+-----+------+-----+
|Hiab | 415| 432| -4%|1,787|
+---------------------------------------------------+-----+-----+------+-----+
|MacGregor | 203| 157| 29%| 733|
+---------------------------------------------------+-----+-----+------+-----+
|Internal sales | 0| 0| | 0|
+---------------------------------------------------+-----+-----+------+-----+
|Cargotec, total |1,056|1,074| -2%|4,569|
+---------------------------------------------------+-----+-----+------+-----+
|Adjustment items related to discontinued operations| 439| 485| -10%|2,049|
+---------------------------------------------------+-----+-----+------+-----+
|Continuing operations, total | 617| 589| 5%|2,519|
+---------------------------------------------------+-----+-----+------+-----+
Operating profit
+---------------------------------------------------+-----+-----+------+-----+
|MEUR |Q1/24|Q1/23|Change| 2023|
+---------------------------------------------------+-----+-----+------+-----+
|Kalmar | 51.0| 62.8| -19%|264.2|
+---------------------------------------------------+-----+-----+------+-----+
|Hiab | 68.7| 61.4| 12%|252.1|
+---------------------------------------------------+-----+-----+------+-----+
|MacGregor | 10.7| -7.4|> 100%| 31.8|
+---------------------------------------------------+-----+-----+------+-----+
|Corporate administration and support functions |-10.7|-12.8| 16%|-64.4|
+---------------------------------------------------+-----+-----+------+-----+
|Cargotec, total |119.6|104.0| 15%|483.8|
+---------------------------------------------------+-----+-----+------+-----+
|Adjustment items related to discontinued operations| 49.9| 62.3| -20%|247.8|
+---------------------------------------------------+-----+-----+------+-----+
|Continuing operations, total | 69.7| 41.7| 67%|236.0|
+---------------------------------------------------+-----+-----+------+-----+
Comparable operating profit
+------------------------------------------------+-----+-----+-----------+-----+
|MEUR |Q1/24|Q1/23| Change| 2023| +------------------------------------------------+-----+-----+-----------+-----+
|Kalmar | 59.5| 63.2| -6%|279.4| +------------------------------------------------+-----+-----+-----------+-----+
|Hiab | 68.7| 61.4| 12% |252.1| +------------------------------------------------+-----+-----+-----------+-----+
|MacGregor | 12.1| 0.7| > 100%| 32.6| +------------------------------------------------+-----+-----+-----------+-----+
|Corporate administration and support functions | -3.5|-12.8| 73%|-50.8| +------------------------------------------------+-----+-----+-----------+-----+
|Cargotec, total |136.8|112.4| 22%|513.3| +------------------------------------------------+-----+-----+-----------+-----+
|Adjustment items related to discontinued | | | | | |operations | 65.6| 62.7| 5%|276.7| +------------------------------------------------+-----+-----+-----------+-----+
|Continuing operations, total | 71.2| 49.7| 43%|236.7| +------------------------------------------------+-----+-----+-----------+-----+
Telephone conference for analysts, investors and media
A live international telephone conference for analysts, investors and media will
be arranged on the publishing day at 10:00 a.m. EEST. The event will be held in
English. The report will be presented by President and CEO of Cargotec Casimir
Lindholm, CFO Mikko Puolakka, President of Hiab Scott Phillips and President of
Kalmar Sami Niiranen. The presentation material will be available at
www.cargotec.com by the latest 9:30 a.m. EEST.
To ask questions, please join the teleconference by registering via the
following link:
https://palvelu.flik.fi/teleconference/?id=50049131. After the registration, the
conference phone numbers and a conference ID to access the conference will be
provided. Questions can be presented during the conference.
The event can also be viewed as a live webcast at
https://cargotec.videosync.fi/q1-2024. The conference call will be recorded and
an on-demand version of the conference will be published at Cargotec's website
later during the day.
Please note that by dialling to the conference call, the participant agrees that
personal information such as name and company name will be collected.
For further information, please contact:
Mikko Puolakka, CFO, tel. +358 20 777 4105
Aki Vesikallio, Vice President, Investor Relations, tel. +358 40 729 1670
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 createsustainable 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
--------------------------------------------------------------------------------
(1) Includes discontinued operations.
(2) The business area 2024 profitability outlook is presented using the same
principles which are applied in the 2023 external financial reporting.
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