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Cargotec’s interim report January–March 2021: Strong orders

Cargotec Corporation
·9-min read

CARGOTEC CORPORATION, Q1 2021 INTERIM REPORT, 28 APRIL 2021 AT 1:30 PM EEST

Cargotec’s interim report January–March 2021: Strong orders

  • Orders received increased by 43 percent

  • Profitability improved

  • Service orders received increased by 11 percent

  • Sale of Navis for EUR 380 million enterprise value was announced in March. Closing is expected by the end of Q3 2021

  • Cargotec aims to reduce the CO2 emissions of its value chain by 1 million tons by 2024

January–March 2021 in brief: Share of services in sales increased

  • Orders received increased by 43 percent and totalled EUR 1,115 (781) million.

  • Order book amounted to EUR 2,217 (31 Dec 2020: 1,824) million at the end of the period.

  • Sales decreased by 15 percent and totalled EUR 730 (858) million.

  • Service sales decreased by 2 percent and totalled EUR 254 (260) million.

  • Service and software sales represented 40 (35) percent of consolidated sales.

  • Operating profit was EUR 25 (26) million, representing 3.4 (3.1) percent of sales. Operating profit includes items affecting comparability worth EUR -27 (-19) million.

  • Comparable operating profit increased by 14 percent and amounted to EUR 52 (45) million, representing 7.1 (5.3) percent of sales.

  • Cash flow from operations before financial items and taxes totalled EUR 51 (23) million.

  • Net income for the period amounted to EUR 10 (11) million.

  • Earnings per share was EUR 0.15 (0.18).

Outlook for 2021
Cargotec reiterates its outlook published on 4 February 2021 and expects its comparable operating profit for 2021 to improve from 2020 (EUR 227* million).

* The comparable operating profit has been specified from EUR 228 million to EUR 227 million. Additional information about the comparable operating profit definition is presented in the stock exchange release published on 29 March 2021.

Cargotec’s key figures

MEUR

Q1/21

Q1/20

Change

2020

Orders received

1,115

781

43%

3,121

Service orders received

299

270

11%

987

Order book, end of period

2,217

1,938

14%

1,824

Sales

730

858

-15%

3,263

Service sales

254

260

-2%

1,005

Software sales*

36

40

-11%

166

Service and software sales, % of sales

40%

35%

36%

Eco portfolio sales

147

192

-23%

777

Eco portfolio sales, % of sales

20%

22%

24%

Operating profit

24.5

26.5

-7%

70.4

Operating profit, %

3.4%

3.1%

2.2%

Comparable operating profit

51.6

45.3

14%

226.7

Comparable operating profit, %

7.1%

5.3%

6.9%

Income before taxes

18.3

19.7

-7%

34.5

Cash flow from operations before financing items and taxes

51.2

22.8

> 100 %

296.4

Net income for the period

9.6

11.3

-15%

8.1

Earnings per share, EUR

0.15

0.18

-16%

0.13

Interest-bearing net debt, end of period

739

798

-7%

682

Gearing, %

58,6 %

57.4%

52.4%

Interest-bearing net debt / EBITDA**

3.5

2.7

3.2

Return on capital employed (ROCE), last 12 months, %***

2.9%

6.5%

2.8%

Personnel, end of period

11,449

12,473

-8%

11,552

*Software sales include the strategic business unit Navis and automation software
**Last 12 months’ EBITDA

In the calculation of the balance sheet related key figures the assets held for sale and liabilities related to assets held for sale are included in the applicable account groups, even though in the balance sheet they are presented on one row.

Cargotec changed the definition of the alternative performance measure comparable operating profit starting from 1 January 2021 to align it with the definition used in the merger prospectus. In addition to the items significantly affecting comparability, the restated comparable operating profit will also exclude the impacts of the purchase price allocation. 2020 comparison figures have been restated according to the new definition. As a result, the comparable operating profit increased by EUR 6 million in the first quarter of 2020 and EUR 23 million in the financial year 2020. Additional information regarding the changed definition is presented in the stock exchange release published on 29 March 2021.

Cargotec’s CEO Mika Vehviläinen: Strong development in orders received
The gradual market recovery from the difficult pandemic situation began in the second half of 2020 and continued in the first quarter of 2021. Our orders received increased by 43 percent compared to the comparison period as all business areas increased their orders. Strong demand continued in Kalmar mobile equipment and Hiab solutions, and Hiab’s orders received was once again its best ever. Interest in Kalmar's automation solutions also increased. MacGregor’s orders received increased by 7 percent, driven by a pick-up merchant ship market. Our order book increased by 22 percent compared to the end of 2020, which positions us well for 2021 onwards. Services orders received increased by 11 percent from the comparison period.

Our sales decreased by 15 percent from the comparison period, reflecting the expected low order intake during last year’s second quarter and the beginning of the third quarter. The availability of product components did not have a material impact on our operations but, if prolonged, the global shortage of components could pose challenges. We monitor closely our supply chain performance and are actively cooperating with our suppliers. Service and software sales constituted 40 percent of our total sales. Despite the difficult pandemic situation and restrictions caused by it, services sales only decreased by 2 percent.

Despite the decline in sales, our comparable operating profit increased by 14 percent. Comparable operating profit increased in Hiab and MacGregor while Kalmar's profitability weakened.

In March, we announced the agreement to sell Navis software business to the US investment firm Accel-KKR for an enterprise value of EUR 380 million. The final purchase price will be determined at closing. The agreement delivers a great home for Navis and secures the best possible growth and value creation for its next development phase. Closing is expected by the end of Q3 2021.

We have refined our strategy and vision. Sustainability and profitable growth are our breakthrough objectives and our vision is to become the global leader in sustainable cargo flow. The importance of sustainability has increased in our operations. In concrete terms, we aim to reduce the CO2 emissions of our value chain by 1 million tons by 2024.

On 1 October 2020, we announced the plan to combine Cargotec and Konecranes through a merger. Extraordinary meetings held on 18 December 2020 by each of the companies resolved the resolution to approve the merger. The implementation of the merger is subject to obtaining the necessary approvals from the competition authorities. More information about the merger is available from the web address www.sustainablematerialflow.com.

Reporting segments’ key figures

Orders received

MEUR

Q1/21

Q1/20

Change

2020

Kalmar

529

334

58%

1,401

Hiab

425

296

44%

1,210

MacGregor

161

151

7%

511

Internal orders

0

0

-1

Total

1,115

781

43%

3,121

Order book

MEUR

31 Mar 2021

31 Dec 2020

Muutos

Kalmar

1,051

842

25%

Hiab

642

503

28%

MacGregor

524

480

9%

Internal orders

0

0

Total

2,217

1,824

22%

Sales

MEUR

Q1/21

Q1/20

Change

2020

Kalmar

324

404

-20%

1,529

Hiab

287

302

-5%

1,094

MacGregor

119

153

-22%

642

Internal sales

0

0

-1

Total

730

858

-15%

3,263

Operating profit

MEUR

Q1/21

Q1/20

Change

2020

Kalmar

18.0

24.1

-25%

61.8

Hiab

33.1

28.4

17%

97.3

MacGregor

-7.9

-8.1

2%

-48.2

Corporate administration and support functions

-18.6

-17.9

-4%

-40.7

Total

24.5

26.5

-7%

70.4

Comparable operating profit

MEUR

Q1/21

Q1/20

Change

2020

Kalmar

20.2

27.8

-28%

126.1

Hiab

38.8

30.7

26%

128.8

MacGregor

3.3

-2.4

> 100%

6.6

Corporate administration and support functions

-10.7

-10.8

1%

-34.9

Total

51.6

45.3

14%

226.7

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 2:45 p.m. EEST. The event will be held in English. The report will be presented by CEO Mika Vehviläinen and CFO Mikko Puolakka. The presentation material will be available at www.cargotec.com by the latest 2:15 p.m. EEST.

The telephone conference, during which questions may be presented, can be accessed by registering here. The registration opens 15 minutes prior to the event. The event conferencing system will call the participant on the phone number provided and place the participant into the event.

The telephone conference can also be accessed without advance registration with code 240743 by calling to one of the following numbers:

  • Denmark +45 35 15 80 48

  • Finland +358 (0)9 7479 0360

  • Norway +47 2100 2613

  • Sweden +46 (0)8 5033 6573

  • United Kingdom +44 (0)330 336 9104

  • United States +1 323 794 2095

The event can also be viewed as a live webcast at https://cargotec.videosync.fi/2021-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 in 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, Executive Vice President and CFO, tel. +358 20 777 4105
Aki Vesikallio, Director, Investor Relations, tel. +358 40 729 1670

THE MERGER AND THE MERGER CONSIDERATION SECURITIES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT AND MAY NOT BE OFFERED, SOLD OR DELIVERED WITHIN OR INTO THE UNITED STATES, EXCEPT PURSUANT TO AN APPLICABLE EXEMPTION OF, OR IN A TRANSACTION NOT SUBJECT TO, THE U.S. SECURITIES ACT.

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 2020 totalled approximately EUR 3.3 billion and it employs around 11,500 people. www.cargotec.com

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