Cargotec refocuses its strategy for higher financial performance through sustainability and growth in profitable core businesses; plans to exit Kalmar’s heavy port cranes business and starts evaluating strategic options for MacGregor
CARGOTEC CORPORATION, INSIDE INFORMATION, 30 MARCH 2022 AT 9:00 AM (EEST)
Cargotec refocuses its strategy for higher financial performance through sustainability and growth in profitable core businesses; plans to exit Kalmar’s heavy cranes business and starts evaluating strategic options for MacGregor
Cargotec’s Board of Directors’ has decided to refocus the strategic direction of the company for higher financial performance. Cargotec will focus on sustainability and growth in profitable core businesses Hiab, Kalmar Mobile Solutions and Kalmar’s horizontal transportation business (“Core Businesses”). Cargotec’s vision and breakthrough objectives sustainability and profitable growth remain.
Cargotec will initiate an evaluation of strategic options of MacGregor including a potential sale of the business. The evaluation covers the whole business area inclusive of its merchant, offshore and services businesses. MacGregor is global leader in sustainable maritime cargo and load handling solutions.
Cargotec will also shift Kalmar’s focus towards mobile solutions and will start planning an exit from the heavy port cranes business. Going forward, Kalmar would offer industry shaping, eco-efficient cargo handling equipment and lifecycle services in the mobile equipment product categories, straddle and shuttle carriers as well as Bromma spreaders.
Hiab is the world's leading provider of on-road load handling equipment, intelligent services, smart and connected solutions and will be at the core of Cargotec’s strategy. Hiab’s business portfolio will remain the same, but Cargotec plans to further accelerate the development of Hiab’s M&A pipeline.
In addition to the planned actions above, Cargotec plans to review its operational model to support the refocused group. Cargotec’s capital allocation priorities for upcoming 12 months are planned to be acceleration of M&A, research and development investments in electrification, robotics and digitalisation as well as Cargotec’s climate programme Mission Climate.
These planned actions are subject to normal local legal requirements and works council consultations.
Cargotec’s Core Businesses will support customers with lifecycle services as well as with market leading equipment and technologies. Automated, robotized and zero emission equipment help Kalmar and Hiab customers to overcome sustainability challenges.
Based on 2021 figures* Core Businesses would have had sales of 2.6 billion euros representing approximately 80% of Cargotec’s total sales. Core Businesses comparable operating profit margin would have been 10.1% while Cargotec’s comparable operating profit margin was 7.0%. Service sales would have been 31% of Core Businesses total sales. Key financial indicators for the businesses in 2021 were following:
|MEUR in 2021||Hiab||Kalmar excluding heavy port cranes||Kalmar heavy port cranes||MacGregor|
|Comparable operating profit %||13.3%||10.1%||-20.8%||-2.7%|
|Order book, end of period||985||1,151||151||560|
*Hiab and MacGregor figures are based on Cargotec’s audited Financial Statement Review 2021. Kalmar and Core Businesses figures are management estimates and do not include divested software business Navis. Consolidation of Navis ended on 1 July 2021. Cargotec’s 2021 comparable operating profit includes Navis and corporate administration and support functions.
The Board’s decision doesn’t impact Cargotec’s outlook for 2022 published on 3 February 2022 in conjunction with the company’s Financial Statements review 2021. Cargotec expects its comparable operating profit for 2022 to improve from 2021 (EUR 232 million).
“This strategic direction and the refocusing of Cargotec demonstrate our commitment to profitable growth, sustainability and the excellence of our people adapting to new challenges. The board is convinced that it is the right time to ensure an accelerated but orderly transition to an even more profitable and futureproof business.”, says Cargotec's Chair of the Board Ilkka Herlin.
“Cargotec refined its strategy in April 2021 with sustainability and profitable growth as breakthrough objectives. Our vision remains, but we will further focus our businesses. That would enable us to accelerate M&A and R&D investments in our profitable core and I’m confident that with our refocused strategic direction we will be well positioned to capture growth in industry trends of electrification, automation and digitalisation”, says Cargotec's CEO Mika Vehviläinen.
“With this planned balanced portfolio we will support our customers with lifecycle services as well as market leading equipment and technology in our profitable Core Businesses Hiab and refocused Kalmar. These are recurring businesses with already above 10 percent comparable operating profit margins. The markets are structurally attractive and we hold leading market positions there. We are now planning to exit or evaluate strategic options for the project businesses where we have been less successful”, Mr Vehviläinen continues.
Cargotec invites analysts, investors and media to an update to be held online today on Wednesday, 30 March 2022 at 10.00 AM EEST to discuss today’s announcement. The event will consist of a presentation held by Cargotec’s CEO Mika Vehviläinen followed by a Q&A session hosted by CEO Mika Vehviläinen and CFO Mikko Puolakka. The language of the event and the presentation materials is English.
The event can be viewed as a live webcast at https://cargotec.videosync.fi/2022-march-webcast.
The event can also be accessed via telephone with code 33455391# by calling one of the following numbers:
Finland: +358 9 817 10310
France: +33 1707 50711
Germany +49 6913 803430
Sweden: +46 8 566 42651
Switzerland: +41 2258 09034
United Kingdom: +44 3333 000804
United States: +1 6319 131422
No advance registration is required and the presentation material will be made available at Cargotec’s website prior to the event. The event will be recorded and an on-demand version of the conference will be published at Cargotec’s website later during the day.
Board of Directors
For more information, please contact:
Mikael Laine, Senior Vice President, Strategy, tel. +358 20 777 4179
Carina Geber-Teir, Senior Vice President, Communications, tel. +358 20 777 4105
Information for investors:
Aki Vesikallio, Director, 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 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 11,000 people.