Cargotec's interim report January–March 2024: Comparable operating
profit margin improved in all business areas
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 estimates2 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 4105Aki 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 create
sustainable customer value. Cargotec has signed the United Nations
Global Compact Business Ambition for 1.5°C. 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.
- Cargotec's interim report January–March 2024
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