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Cargotec’s interim report January–March 2023: Record-high comparable operating profit
CARGOTEC CORPORATION, INTERIM REPORT JANUARY–MARCH 2023, 27 APRIL 2023 AT 9:00 AM EEST
Cargotec’s interim report January–March 2023: Record-high comparable operating profit
₋ Demand remained at a good level
₋ Strong sales development, increase by 26 percent
₋ Comparable operating profit improved in core businesses by 62 percent
January–March 2023 in brief: Comparable operating profit margin above 10 percent
Orders received decreased by 7 percent and totalled EUR 1,059 (1,135) million.
Order book amounted to EUR 3,467 (31 Dec 2022: 3,541) million at the end of the period.
Sales increased by 26 percent and totalled EUR 1,074 (851) million.
Service sales increased by 22 percent and totalled EUR 346 (284) million.
Service sales represented 32 (33) percent of consolidated sales.
Eco portfolio sales increased by 21 percent and totalled EUR 346 (285) million.
Eco portfolio sales represented 32 (34) percent of consolidated sales.
Operating profit was EUR 104 (37) million, representing 9.7 (4.4) percent of sales. The operating profit includes items affecting comparability worth EUR -8 (-23) million.
Comparable operating profit increased by 85 percent and amounted to EUR 112 (61) million, representing 10.5 (7.2) percent of sales.
Cash flow from operations before finance items and taxes totalled EUR 26 (-70) million.
Profit for the period amounted to EUR 73 (21) million.
Basic earnings per share was EUR 1.13 (0.33).
Outlook for 2023 unchanged
Cargotec estimates its core businesses’1 2023 comparable operating profit to improve from 2022 (EUR 3842 million) and MacGregor’s comparable operating profit in 2023 to be positive (EUR -472 million).3
1) Hiab and Kalmar excluding heavy cranes and including corporate administration and support functions
2) Cargotec has changed the definition of the alternative performance measure comparable operating profit starting from 1 January 2023. Comparison figures have been calculated based on the new definition. Additional information about the definition is presented in the stock exchange release published on 4 April 2023.
3) The outlook for 2023 does not include the comparable operating profit of Kalmar's heavy crane business which will be discontinued.
Cargotec’s key figures
MEUR | Q1/23 | Q1/22 | Change | 2022 |
Orders received | 1,059 | 1,135 | -7% | 4,862 |
Service orders received | 362 | 307 | 18% | 1,286 |
Order book, end of period | 3,467 | 3,151 | 10% | 3,541 |
Sales | 1,074 | 851 | 26% | 4,089 |
Service sales | 346 | 284 | 22% | 1,264 |
Service sales, % of sales | 32% | 33% |
| 31% |
Eco portfolio sales | 346 | 285 | 21% | 1,288 |
Eco portfolio sales, % of sales | 32% | 34% |
| 31% |
Operating profit | 104.0 | 37.5 | > 100% | 106.1 |
Operating profit, % | 9.7% | 4.4% |
| 2.6% |
Comparable operating profit | 112.4 | 60.9 | 85% | 316.4 |
Comparable operating profit, % | 10.5% | 7.2% |
| 7.7% |
Profit before taxes | 95.7 | 30.2 | > 100% | 79.0 |
Cash flow from operations before finance items and taxes | 26.5 | -70.3 | > 100% | 231.2 |
Profit for the period | 72.6 | 21.1 | > 100% | 23.2 |
Basic earnings per share, EUR | 1.13 | 0.33 | > 100% | 0.37 |
Interest-bearing net debt, end of period | 393 | 573 | -31% | 378 |
Gearing, % | 26.4% | 37.8% |
| 24.8% |
Interest-bearing net debt / EBITDA* | 1.0 | 1.2 |
| 1.2 |
Return on capital employed (ROCE), last 12 months, % | 7.5% | 15.3% |
| 4.6% |
Personnel, end of period | 11,640 | 11,282 | 3% | 11,526 |
* Last 12 months’ EBITDA
Cargotec changed the definition of the alternative performance measure comparable operating profit starting from 1 January 2023. The restated comparable operating profit will also include the impacts of the purchase price allocation, which amounted to EUR 16 million in 2022. Of these items, EUR 1 million were related to Kalmar, EUR 3 million to Hiab, and EUR 12 million to MacGregor. Additional information regarding the changed definition is presented in the stock exchange release published on 4 April 2023.
Cargotec’s eco portfolio criteria has been revised and the 2022 eco portfolio sales has been restated accordingly.
Cargotec’s President and CEO Casimir Lindholm: Core businesses drove strong development in sales and comparable operating profit
The first quarter provided a strong start to the year 2023 and a solid base for me to enter as Cargotec’s new CEO as of 1 April. Despite a 7 percent decrease in orders received, demand remained at a good level. Service orders continued to grow significantly and increased by 18 percent. Stemming from our solid order book, our sales increased by 26 percent to EUR 1,074 million. Driven by our core businesses Kalmar and Hiab, we reached a record-high comparable operating profit of EUR 112 million and a comparable operating profit margin of 10.5 percent.
In Kalmar, demand was steady. We saw some delays in purchase decisions in larger projects whereas demand for services and eco portfolio solutions remained strong. Sales increased by 31 percent to EUR 485 million. Sales growth was supported by successful supply chain management despite persisting tightness and volatility of the component availability. Service sales increased, driven by improved spare parts capture rates. Kalmar’s comparable operating profit margin improved to a record level of 13 percent, driven by higher sales, improved management of supply chain and lower losses related to heavy cranes business.
In Hiab, underlying demand drivers remained at a good level. Orders received declined from the comparison period, which was partly due to large orders received in the first quarter of 2022. Order intake was also affected by inflation, high interest rates, and extended truck lead times. Bottlenecks in truck chassis supply also limited Hiab’s sales growth. However, the operational execution was strong and Hiab’s sales grew by 27 percent to EUR 432 million and comparable operating profit by 29 percent to EUR 61 million.
In MacGregor, orders received improved, driven by strong container vessel and car carrier markets. Going forward, the order pipeline looks healthy but, due to limited shipyard capacity, container vessel contracting is estimated to be slower. MacGregor’s orders received increased also in offshore and service businesses. Sales in MacGregor were still at a relatively low level of EUR 157 million with 56 percent of sales coming from services. MacGregor’s comparable operating profit improved to EUR 1 million stemming from higher service sales. As announced earlier, we will continue to focus on a turnaround of the business and to look for a solution for MacGregor in 2024.
To conclude, the first quarter was a robust start to the year. Despite elevated market uncertainty, many of our customers and partners are performing well. We have a solid order book covering almost the entire 2023 equipment sales and we are tracking well against our outlook for 2023 as well as performance targets for core businesses. The MacGregor restructuring is progressing and the business is on path to deliver a positive comparable operating profit in 2023. Our core businesses' comparable operating profit increased by 62 percent and posted a comparable operating profit margin of 12.4 percent. Share of eco portfolio orders in our core business continued to increase and core businesses’ sales grew clearly faster than the global GDP.
Reporting segments’ key figures
Orders received
MEUR | Q1/23 | Q1/22 | Change | 2022 |
Kalmar | 471 | 499 | -6% | 2,081 |
Hiab | 380 | 482 | -21% | 1,807 |
MacGregor | 208 | 154 | 35% | 976 |
Internal orders | 0 | 0 |
| 0 |
Total | 1,059 | 1,135 | -7% | 4,862 |
Order book
MEUR |
| 31 Mar 2023 | 31 Dec 2022 | Change |
Kalmar | 1,390 | 1,428 | -3% | |
Hiab | 1,121 | 1,185 | -5% | |
MacGregor | 956 | 927 | 3% | |
Internal order book | 1 | 1 |
| |
Total |
| 3,467 | 3,541 | -2% |
Sales
MEUR | Q1/23 | Q1/22 | Change | 2022 |
Kalmar | 485 | 372 | 31% | 1,943 |
Hiab | 432 | 340 | 27% | 1,578 |
MacGregor | 157 | 140 | 12% | 569 |
Internal sales | 0 | 0 |
| -1 |
Total | 1,074 | 851 | 26% | 4,089 |
Operating profit
MEUR | Q1/23 | Q1/22 | Change | 2022 |
Kalmar | 62.8 | 22.7 | > 100% | 142.1 |
Hiab | 61.4 | 43.5 | 41% | 217.1 |
MacGregor | -7.4 | -5.7 | -28% | -190.2 |
Corporate administration and support functions | -12.8 | -23.0 | 44% | -62.9 |
Total | 104.0 | 37.5 | > 100% | 106.1 |
Comparable operating profit*
MEUR | Q1/23 | Q1/22 | Change | 2022 |
Kalmar | 63.2 | 28.2 | > 100% | 189.2 |
Hiab | 61.4 | 47.4 | 29% | 220.9 |
MacGregor | 0.7 | -2.8 | > 100% | -47.5 |
Corporate administration and support functions | -12.8 | -12.0 | -7% | -46.3 |
Total | 112.4 | 60.9 | 85% | 316.4 |
*Cargotec changed the definition of the alternative performance measure comparable operating profit starting from 1 January 2023. The restated comparable operating profit will also include the impacts of the purchase price allocation, which amounted to EUR 16 million in 2022. Of these items, EUR 1 million were related to Kalmar, EUR 3 million to Hiab, and EUR 12 million to MacGregor. Additional information regarding the changed definition is presented in the stock exchange release published on 4 April 2023.
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 Casimir Lindholm, CFO Mikko Puolakka, Kalmar’s President Michel van Roozendaal, and Hiab’s President Scott Phillips. 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=1009460. 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. For questions, please press *5 on your telephone keypad to join the queue.
The event can also be viewed as a live webcast at https://cargotec.videosync.fi/2023-q1. 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.
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 create sustainable customer value. Cargotec has signed the United Nations Global Compact Business Ambition for 1.5°C. The company's sales in 2022 totalled approximately EUR 4.1 billion and it employs around 11,500 people. www.cargotec.com
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