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Cargotec’s half-year financial report January–June 2022: Record quarter

CARGOTEC CORPORATION, 2022 HALF-YEAR FINANCIAL REPORT, 20 JULY 2022 AT 1:30 PM EEST

Cargotec’s half-year financial report January–June 2022: Record quarter
- All time high comparable operating profit
- Record quarter for services and Hiab
- Orders received and order book at a new record
- Supply chain challenges and market uncertainty are expected to continue

April–June 2022 in brief: Orders received and comparable operating profit at record level

  • Orders received increased by 9 percent and totalled EUR 1,390 (1,276) million.
  • Order book amounted to EUR 3,596 (31 Dec 2021: 2,847) million at the end of the period.
  • Sales increased by 12 percent and totalled EUR 959 (853) million.
  • Service sales increased by 13 percent and totalled EUR 303 (268) million.
  • Service sales represented 32 (31) percent of consolidated sales.
  • Eco portfolio sales increased by 25 percent and totalled EUR 217 (173) million.
  • Eco portfolio sales represented 23 (20) percent of consolidated sales.
  • Operating profit was EUR 47 (45) million, representing 5.0 (5.2) percent of sales. The operating profit includes items affecting comparability worth EUR -38 (-25) million.
  • Comparable operating profit increased by 23 percent and amounted to EUR 86 (70) million, representing 8.9 (8.2) percent of sales.
  • Cash flow from operations before financial items and taxes totalled EUR 38 (13) million.
  • Net income for the period amounted to EUR 41 (26) million.
  • Earnings per share was EUR 0.64 (0.40).

January–June 2022 in brief: Record-high order book

  • Orders received increased by 6 percent and totalled EUR 2,525 (2,392) million.
  • Order book amounted to EUR 3,596 (31 Dec 2021: 2,847) million at the end of the period.
  • Sales increased by 14 percent and totalled EUR 1,810 (1,583) million.
  • Service sales increased by 12 percent and totalled EUR 586 (523) million.
  • Service sales represented 32 (33) percent of consolidated sales.
  • Eco portfolio sales increased by 31 percent and totalled EUR 419 (320) million.
  • Eco portfolio sales represented 23 (20) percent of consolidated sales.
  • Operating profit was EUR 85 (69) million, representing 4.7 (4.4) percent of sales. The operating profit includes items affecting comparability worth EUR -66 (-52) million.
  • Comparable operating profit increased by 24 percent and amounted to EUR 151 (121) million, representing 8.3 (7.7) percent of sales.
  • Cash flow from operations before financial items and taxes totalled EUR -32 (64) million.
  • Net income for the period amounted to EUR 62 (35) million.
  • Earnings per share was EUR 0.97 (0.55).

Outlook for 2022 unchanged
Cargotec expects its comparable operating profit for 2022 to improve from 2021 (EUR 232 million).

Cargotec’s key figures

MEURQ2/22Q2/21ChangeQ1-Q2/22Q1-Q2/21Change2021
Orders received1,3901,2769%2,5252,3926%4,427
Service orders received3092849%6165836%1,162
Order book, end of period3,5962,60638%3,5962,60638%2,847
Sales95985312%1,8101,58314%3,315
Service sales30326813%58652312%1,076
Service sales, % of sales32%31% 32%33% 32%
Eco portfolio sales21717325%41932031%626
Eco portfolio sales, % of sales23%20% 23%20% 19%
Operating profit47.544.86%85.069.323%355.7
Operating profit, %5.0%5.2% 4.7%4.4% 10.7%
Comparable operating profit85.569.623%150.8121.224%231.5
Comparable operating profit, %8.9%8.2% 8.3%7.7% 7.0%
Income before taxes46.237.523%76.455.837%333.1
Cash flow from operations before financing items and taxes38.113.1> 100%-32.264.3< -100%169.3
Net income for the period40.825.858%61.935.475%246.7
Earnings per share, EUR0.640.4059%0.970.5576%3.82
Interest-bearing net debt, end of period605773-22%605773-22%414
Gearing, %39.0%60.0% 39.0%60.0% 26.8%
Interest-bearing net debt / EBITDA*1.23.0 1.23.0 0.9
Return on capital employed (ROCE), last 12 months, %15.2%5.3% 15.2%5.3% 14.5%
Personnel, end of period11,49211,4960%11,49211,4960%11,174

* 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’s CEO Mika Vehviläinen: Record quarter, progress in refocused strategy execution

The second quarter was successful for Cargotec. Our personnel did an excellent job in a challenging operating environment, making our good performance possible. Our orders received, order book and comparable operating profit reached all-time records. Also our sales grew significantly compared to the comparison period.

Despite the cost level increases, our margins have remained at a good level which demonstrates our business agility and effective pricing. We again made price increases required by the market situation during the second quarter and continue to monitor the situation. The success was particularly prominent at Hiab, which reached record high sales and comparable operating profit in the second quarter.

We published our refocused strategy during the previous quarter. We have progressed determinedly with the strategy, taking the first important steps on it. In May, we announced plans to combine the strategic business units Kalmar Mobile Solutions and Kalmar Automation Solutions. After the reporting period, we announced that Kalmar and Rainbow Industries Co. Ltd. (RIC) have entered into an agreement whereby Kalmar would transfer heavy cranes’ related intellectual properties and assets to RIC in China. The agreement would strengthen Kalmar’s strategic transfer to focus on offering industry shaping, eco-efficient cargo handling equipment. Further, Kalmar continues to offer crane automation and crane related services for its customers globally.

As part of our refocused strategy we also initiated the evaluation of strategic options of MacGregor including a potential sale of the business. MacGregor’s second quarter result was still burdened by the investments made to the offshore segment, low sales and delays in the service’s spare part deliveries as well as the weak profitability of the first offshore wind power projects. Despite low sales, MacGregor business has been profitable in the merchant sector and services. During the quarter, MacGregor’s orders received increased by 78 percent to EUR 301 million, reflecting the strong demand of the merchant vessels.

In accordance with our strategy, we continued to focus on R&D during the second quarter. Our R&D investments increased by over 10 percent compared to the comparison period. We launched several new eco-efficient products during the quarter and, in response to the logistics industry’s growing demand for electric solutions, invested in expanding the Kalmar manufacturing plant in Kansas, USA. Our eco portfolio sales increased by 25 percent from the comparison period.

The service business growth continued as well with sales up by 13 percent and orders received by 9 percent. In the second quarter service sales constituted 32 percent of our total sales.

Our starting position for the latter half of the year is good. Even though market forecasts have been cut during the quarter, our markets are still estimated to grow. Despite the surrounding uncertainty, we enter the second half of the year in a good position with a strong balance sheet and a record order backlog. The supply chain challenges are expected to continue also during the second half of the year. In Cargotec’s business the third quarter is typically less active than the second quarter. We also anticipate the third quarter sales mix to be slightly weaker than in the second quarter.

Reporting segments’ key figures


Orders received

MEURQ2/22Q2/21ChangeQ1-Q2/22Q1-Q2/21Change2021
Kalmar567600-5%1,0661,129-6%2,063
Hiab5235083%1,0059338%1,713
MacGregor30116978%45533137%652
Internal orders00 00 0
Total1,3901,2769%2,5252,3926%4,427

Order book

MEUR    30 Jun 202231 Dec 2021Change
Kalmar1,6001,30223%
Hiab1,25098527%
MacGregor74656033%
Internal order book00 
Total    3,5962,84726%

Sales

MEURQ2/22Q2/21ChangeQ1-Q2/22Q1-Q2/21Change2021
Kalmar42838212%80070513%1,512
Hiab40431628%74460323%1,250
MacGregor127156-19%267275-3%553
Internal sales00 -10 -1
Total95985312%1,8101,58314%3,315

Operating profit

MEURQ2/22Q2/21ChangeQ1-Q2/22Q1-Q2/21Change2021
Kalmar13.228.2-53%35.946.1-22%344.5
Hiab62.640.056%106.173.245%144.7
MacGregor-15.0-1.0< -100%-20.8-8.9< -100%-40.0
Corporate administration and support functions-13.3-22.541%-36.3-41.112%-93.5
Total47.544.86%85.069.323%355.7

Comparable operating profit

MEURQ2/22Q2/21ChangeQ1-Q2/22Q1-Q2/21Change2021
Kalmar41.433.424%69.953.630%120.1
Hiab63.245.439%111.884.133%166.3
MacGregor-7.43.1< -100%-7.26.4< -100%-14.7
Corporate administration and support functions-11.7-12.35%-23.7-22.9-3%-40.1
Total85.569.623%150.8121.224%231.5

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 3:00 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 latest 2:30 p.m. EEST.
The telephone conference, during which questions may be presented, can be accessed with code 914555 by calling one of the following numbers:

  • Finland +358 (0)9 7479 0572
  • France +33 (0)1 70 730 3 37
  • Germany +49 (0)69 22222 5195
  • Singapore +65 6703 6923
  • Sweden +46 (0)8 5664 2754
  • Switzerland +41 (0)22 567 5785
  • United Kingdom +44 (0)330 165 3641
  • United States +1 646-828-8082

The event can also be viewed as a live webcast at https://cargotec.videosync.fi/2022-q2. 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 into 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 2021 totalled approximately EUR 3.3 billion and it employs around 11,500 people. www.cargotec.com