CARGOTEC CORPORATION, Q3 2018 INTERIM REPORT, 26 OCTOBER 2018 AT 2.00 PM EEST
Good development in all Kalmar's key figures
Strong orders in Hiab, operating profit declined
MacGregor's orders increased slightly
Orders received increased by 23 percent and totalled EUR 921 (749) million. Orders received grew in all business areas.
Order book amounted to EUR 1,887 (31 Dec 2017: 1,566) million at the end of the period.
Sales increased by 9 percent and totalled EUR 805 (736) million.
Service sales increased by 3 percent and totalled EUR 229 (223) million.
Service and software sales represented 33 (34) percent of consolidated sales.
Operating profit was EUR 54.5 (52.5) million, representing 6.8 (7.1) percent of sales.
Operating profit excluding restructuring costs remained at the comparison period's level and amounted to EUR 57.1 (57.2) million, representing 7.1 (7.8) percent of sales.
Cash flow from operations before financial items and taxes totalled EUR 17.0 (88.5) million.
Net income for the period amounted to EUR 37.9 (32.4) million.
Earnings per share was EUR 0.58 (0.50).
Orders received increased by 15 percent and totalled EUR 2,766 (2,406) million.
Sales increased by 1 percent and totalled EUR 2,394 (2,364) million.
Service sales increased by 3 percent and totalled EUR 690 (669) million.
Service and software sales represented 33 (33) percent of consolidated sales.
Operating profit was EUR 129.1 (167.4) million, representing 5.4 (7.1) percent of sales. Operating profit includes EUR 41.3 (19.2) million in restructuring costs.
Operating profit excluding restructuring costs decreased by 9 percent and amounted to EUR 170.4 (186.6) million, representing 7.1 (7.9) percent of sales.
Cash flow from operations before financial items and taxes totalled EUR 39.8 (141.1) million.
Net income for the period amounted to EUR 73.9 (105.0) million.
Earnings per share was EUR 1.13 (1.63).
Cargotec reiterates its outlook published on 8 February 2018 and expects its operating profit excluding restructuring costs for 2018 to improve from 2017 (EUR 258.6 million, IFRS 15 restated).
From the beginning of 2018, Cargotec applies the new IFRS 15 and IFRS 9 accounting standards as well as the amendments to the IFRS 2 standard. More information on the new standards is available in Note 2, Accounting principles and new accounting standards. Cargotec has also aligned the definitions of the equipment, service and software businesses from the beginning of 2018. The data for the comparison period 2017 has been restated accordingly. Cargotec has published a stock exchange release on 28 March 2018 regarding the changes.
|Service orders received||242||225||7%||730||675||8%||896|
|Order book, end of period||1,887||1,699||11%||1,887||1,699||11%||1,566|
| Service and software sales, |
% of Cargotec's sales
|Operating profit, %||6.8%||7.1%||5.4%||7.1%||6.8%|
|Operating profit**, %||7.1%||7.8%||7.1%||7.9%||8.0%|
|Income before taxes||47.0||44.6||5%||108.9||142.2||-23%||189.2|
|Cash flow from operations before financing items and taxes||17.0||88.5||-81%||39.8||141.1||-72%||253.5|
|Net income for the period||37.9||32.4||17%||73.9||105.0||-30%||132.7|
|Earnings per share, EUR||0.58||0.50||16%||1.13||1.63||-31%||2.05|
|Interest-bearing net debt, end of period||639||535||19%||639||535||19%||472|
|Interest-bearing net debt / EBITDA***||2.5||2.0||2.5||2.0||1.6|
| Return on capital employed |
(ROCE), annualised, %
|Personnel, end of period||11,652||11,133||5%||11,652||11,133||5%||11,251|
*Software sales include Navis business unit and automation software
**Excluding restructuring costs
***Last four quarters' EBITDA
Our development continued to be strong in terms of orders received during the third quarter of 2018. Orders received grew in all of our business areas. The development was especially favourable in Kalmar, where the orders received were 38 percent higher than in the comparison period. Also our sales grew in all business areas, supported by the good order intake. Cargotec's third quarter operating profit excluding restructuring costs remained at the comparison period's level despite Hiab's operating profit declining by almost one third. The decline in Hiab's operating profit was mainly caused by the weakening of the US dollar compared to the euro, product mix, additional costs related to supply chain, as well as investments in sales and service capabilities and digitalisation.
During the third quarter, Hiab entered into an agreement to acquire the Effer loader cranes business. Founded in 1965, Effer has over 50 years' experience in developing and manufacturing knuckle-boom cranes. With the acquisition of Effer, Hiab will complement its loader cranes portfolio and expand its range of heavy cranes, in particular in the over 100 metric tonne segment, in which Effer is recognised as a global leader.
During the third quarter, Scott Phillips was appointed President of Hiab and a member of the Cargotec Executive Board. He has extensive experience in various global leadership positions in the construction and mining industries. Roland Sundén, who had been managing Hiab successfully since 2014, took up a corporate development role in Cargotec as of 1 October 2018, continuing as a member of the Cargotec Executive Board until the end of 2018. I would like to thank Roland warmly for the excellent work in lifting Hiab's sales and profitability to a new level.
In September, we announced our refined strategy for 2019-2021. Together with our business areas, we will continue to work towards our vision "Becoming the global leader in intelligent cargo handling". As customer needs change, we will focus even more on the total lifecycle and comprehensive solutions. Our strategy will ensure profitable growth by focusing on customer centricity, services, digitalisation and productivity. Kalmar, Hiab and MacGregor share Cargotec's must-win battles, while also having their own specific focus areas. Leadership - a must-win battle during the strategy period 2015-2018 - is still fundamentally important to the company, and it is a cornerstone for all our operations also in the future. We are committed to achieving our financial targets announced in 2017.
|MEUR||30 Sep 2018||31 Dec 2017||Change|
|Corporate administration and support functions||-8.2||-12.1||33%||-64.5||-36.2||-78%||-56.3|
|Corporate administration and support functions||-6.0||-9.5||37%||-24.9||-30.2||18%||-42.2|
A press conference for analysts and media, combined with a live international telephone conference, will be arranged on 26 October at 3.00 p.m. EEST at Cargotec's head office, Porkkalankatu 5, Helsinki. The event will be held in English. The report will be presented by CEO Mika Vehviläinen and Executive Vice President, 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 access code 274010 using the following numbers:
FI: +358 (0)9 7479 0360
SE: +46 (0)8 5033 6573
UK: +44 (0)330 336 9104
US: +1 323-794-2558
The event can also be viewed as a live webcast at www.cargotec.com. An on-demand version of the conference will be published at Cargotec's website later during the day.
For further information, please contact:
Mikko Puolakka, Executive Vice President and CFO, tel. +358 20 777 4105
Hanna-Maria Heikkinen, Vice President, Investor Relations, tel. +358 20 777 4084
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's sales in 2017 totalled approximately EUR 3.2 billion and it employs over 11,000 people. www.cargotec.com