6 february 2020 cash flow increased - cargotec...cargotec’s financial statements review 2019...

Cash flow increased significantly

6 February 2020

6/2/2020Cargotec’s financial statements review 2019 1

Cargotec’s financial statements review 2019Mika Vehviläinen, CEO • Mikko Puolakka, CFO

• Excellent year in Kalmar and Hiab

• Good development in service business

• Strong order book

Contents1. Group level development2. Strategic options in Navis business3. Business areas4. Financials, dividend and outlook


Highlights of 2019 – Comparable operating profit and sales increased

Cargotec’s January–September 2019 interim reportMika Vehviläinen, CEO • Mikko Puolakka, CFO

149

231

250 259242

264

4.4%

6.2%

7.1%

8.0%7.3% 7.2%

2014 2015 2016 2017 2018 2019

Comparable operating profit EUR millionComparable operating profit margin

• Orders received decreased by 1%• Kalmar -7%• Hiab +4%• MacGregor +9%

• Sales increased by 11%• +10% in comparable FX

• Comparable operating profit increased by 9%• Kalmar’s increased by 13%, Hiab’s

by 27%• MacGregor’s comparable operating

profit was MEUR -28 EUR


Growth in number of containers handled at ports continued Customers are starting automation

projects mainly with phased investments

Construction activity increased in Europe and grew slightly in the US

In both merchant and offshore sector, orders and activity remained on a low level

Market environment 2019

Source: Clarkson Research (number of ships and offshore units)

Indicative historical average

936 851

0

500

1,000

1,500

2,000

2018 2019

91 600

100200300400500

2018 2019

752 754

0

200

400

600

800

2018 2019

726 746

0

200

400

600

800

2018 2019

784 802

0

200

400

600

800

2018 2019

Long term contracting – Key driver for MacGregor

Construction output – Key driver for Hiab

Global container throughput (MTEU) – Key driver for Kalmar

Merchant ships > 2,000 dwt/gt (excl. ofs & misc) Offshore mobile units

United States Europe

Source: Oxford Economics

Source: Drewry

+0.3% +2.8%

+2.3%

Historical averageHistorical average

-34%-9%


432550 486 450 516

417 396 446

307

301294 357

341340 307

322

124

131141

184 165

116 156193

863

981921

991 1,022

872 858962

0

200

400

600

800

1,000

1,200

Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019

Kalmar Hiab MacGregor

Orders received remained at a high level in 2019

MEUR

-19%(y/y)

-19%(y/y)

1,919 1,776

1,259 1,310

580 630

3,756 3,714

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

2018 2019


+5%(y/y)

-10%(y/y)

-1%(y/y)

-1%(y/y)


1,012 1,127 1,101 1,083 1,049

453483 453 458 406

530536 519 712

633

1,9952,145 2,072

2,2512,089

0200400600800

1,0001,2001,4001,6001,8002,0002,2002,400

Q4/18 Q1/19 Q2/19 Q3/19 Q4/19


Order book increased compared to 2018, driven byMacGregor and KalmarOrder bookMEUR

-11%(y/y)

Order book by reporting segment, Q4 2019

50%

20%

30%



SalesMEUR

Comparable operating profitMEUR

Sales increased in all business areas, comparable operating profit burdened by MacGregor’s weak result

58

70

5764

6874

-20

-10

0

10

20

30

40

50

60

70

80

Q3/18 Q4/18 Q1/19 Q2/19 Q3/19 Q4/19

Kalmar Hiab MacGregor Cargotec total EBIT*

*) Including Corporate admin and support

x

444 401 427 424 471

318316

358 307368

149139

127 170

176910

856911 901

1,015

0

250

500

750

1,000

1,250

Q4/18 Q1/19 Q2/19 Q3/19 Q4/19



Service and software* salesMEUR

257 249 259 269 285

4738 41 44

46

0

50

100

150

200

250

300

350

Q4/18 Q1/19 Q2/19 Q3/19 Q4/19

2019 service sales +8% Kalmar +3% Hiab +11% MacGregor +15% Total service sales 7% in

comparable FX

Software sales +15%

Service and software sales constituted 33% of total sales in 2019

Good development in service and software sales

*Software sales defined as strategic business unit Navis and automation software

Services Software

980 1,062

147168

0

300

600

900

1,200

1,500

2018 2019

1,1271,230

1,126

Cargotec will review alternative development paths including new ownership structures and a potential sale of Navis business

The aim of the strategic evaluation is to secure best possible growth and value creation for the next development phase for Navis

Cargotec’s investment since 2011 has enabled Navis to become the market leader in terminal operating systems (TOS), and more than doubled revenue to EUR 115 million in 2019

Cargotec’s other software business will not be part of the evaluation

Cargotec to evaluate strategic options forNavis business

Cargotec’s financial statements review 2019

Committed to become the leader in intelligent cargo handling – evaluating future options for value creation

Increased focus on intelligent solutions and system level optimisation.Availability and performance-based solutions and servicesAdvanced robotics


Evaluating ecosystem play

Continuous development of equipment, spare parts and maintenance services

3

2

1

BusinessareasCargotec’s financial statements review 2019


MEUR Q4/19 Q4/18 Change

Orders received

446 450 -1%

Order book 1,049 1,012 +4%

Sales 471 444 +6%

Comparable operating profit

44 51 -14%

Comparable operatingprofit margin

9.4% 11.5% -214bps

Kalmar Q4 – Strong order book, profitability declined

TO BE UPDATED

Orders received remained stable Growth in automation and projects,

decline in mobile equipment

Sales increased by 6% Services growth +6% in

comparable FX

Comparable operating profit decreased due to a less profitable sales mix



Orders received

322 357 -10%

Order book 406 453 -10%

Sales 368 318 +16%


52 35 +49%


14.1% 11.0% +310bps

Hiab Q4 – Strong improvement in operating profit

Order backlog lower as supply chain normalised 10% decline in orders received,

coming mainly from the US and UK

Sales increased by 16% Across all product lines

Comparable operating profit increased due to growth in sales



Orders received

193 184 +5%

Order book 633 530 +20%

Sales 176 149 +18%


-13 -7 -84%


-7.1% -4.6% -255bps

Orders received increased by 5% Orders received excl. TTS -8% Decline in merchant, increase in

offshore (+35%) and service orders(+36%)

Sales increased by 18% Sales excl. TTS -3% Service sales +26%

Comparable operating profitdeclined Cost overruns in certain offshore

projects, low capacity utilisation, lower sales margins

Productivity improvements ongoing

MacGregor Q4 – Loss making in Q4, service sales increased

The potential cost savings in 2020 are estimated to be around EUR 15 million

Potential cost savings from the TTS integration EUR ~12 million in 2020 EUR ~10 million in 2021 EUR ~5 million in 2022–2024

TTS integration cost synergy components Roles/Positions Facilities Supply chain

Planned MacGregor cost savings

Financials, dividendand outlookCargotec’s financial statements review 2019


Key figures – EPS burdened by restructuring costs10-12/19 10-12/18 Change 2019 2018 Change

Orders received, MEUR 962 991 -3% 3,714 3,756 -1%

Order book, MEUR 2,089 1,995 +5% 2,089 1,995 +5%

Sales, MEUR 1,015 910 +12% 3,683 3,304 +11%

Comparable operating profit, MEUR 74 70 +7% 264 242 +9%

Comparable operating profit, % 7.3% 7.7% 7.2% 7.3%

Items affecting comparability, MEUR -56 -9 < -100% -84 -52 -62%

Operating profit, MEUR 18 61 -70% 180 190 -5%

Operating profit, % 1.8% 6.7% 4.9% 5.8%

Net income, MEUR -0 34 <- 100% 89 108 -17%

Earnings per share, EUR -0.00 0.53 <- 100% 1.39 1.66 -16%

Earnings per share, EUR* 0.51 0.62 -16% 2.19 2.33 -6%

*) Excluding items affecting comparability and adjusted with related tax effect


Cash flow improved significantly

204

315

373

253

126

361

-4

27 17

86

31 41

81

208

-50

0

50

100

150

200

250

300

350

400

2014 2015 2016 2017 2018 2019 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 Q3/19 Q4/19

Cash flow from operations before financing items and taxesMEUR


Interest-bearing net debt EUR 774 million (31 Dec 2018: 625) Average interest rate* 1.8% (2.1%) Net debt/EBITDA 2.5 (2.3) Net debt/EBITDA 1.9 excluding IFRS 16

Net debt and gearing increasedmainly due to IFRS 16 Gearing without IFRS 16

approximately 41%

Total shareholders’ equity EUR 1,427 million (1,429) Equity/total assets 36.4% (40.9%)

Balanced maturity profile EUR 271 million maturing in 2020 Two bonds issued in September 2019

(aggregate amount EUR 250 million) to prepare for 2020 re-payments

Strong financial position

271

173 189

143113

135

200

0

50

100

150

200

250

300

2020 2021 2022 2023 2024 2025 Later

578719

622503 472

625 586

188

46.7%

59.2%

46.4%36.0%

43.8%54.2%

0%

20%

40%

60%

0200400600800

1,0001,200

2013 2014 2015 2016 2017 2018 2019

Net debt IFRS 16 Lease liability** Gearing-%

Repayment schedule of interest-bearing liabilities

Net debt and gearing

MEUR

MEUR

33.1%

*Excluding on-balance sheet lease liabilities**On-balance sheet lease liability on 31 Dec 2019. Cargotec adopted the IFRS 16 standard on 1 Jan 2019.

Cargotec’s financial statements review 2019 20

ROCE decreased compared to 2018, impacted byrestructuring costs

0

2

4

6

8

10

12

2013 2014 2015 2016 2017 2018 2019

ROCE-% Comparable operating profit margin %

7.2 7.3

6/2/2020

Cargotec has refined the treatment of the interest rate component of currency forward contracts in the calculation of return on capital employed. As a result, the return on capital employed increased by 0.4 percentage points in 2018, 0.5 percentage points in 2017, 0.3 percentage points in 2016, and 0.1 percentage points in 2015.The figures for earlier years have not been restated.

Dividend continues to increase**EUR 1.20 dividend per B share for 2019**Dividend to be paid in two EUR 0.60 instalments**Calculated from EPS excl. items affecting comparability, payout ratio for 2019 is 55%

6/2/2019Cargotec’s financial statements review 2019

Payout ratio

1.11

2.21

1.95 2.05

1.66

1.39

0.550.80

0.95 1.05 1.10 1.20

0.00

0.50

1.00

1.50

2.00

2.50

2014 2015 2016 2017* 2018 2019

EPS (reported) Dividend

50%36%

49%51%

* 2017 EPS figure has been restated according to IFRS 15** Board proposal to AGM

86%

21

**66%

Assumptions for 2020

MacGregor• MacGregor’s comparable operating profit is expected to

increase from 2019 • EUR 15 million cost savingsProductivity improvements in all business areas and corporateService business is expected to grow

Market visibility – uncertain demand• Kalmar mobile equipment• Hiab


Restructuring• Approximately EUR 60 million costs from ongoing programmes• Reviews have been started which may increase or decrease the

estimate


Outlook for 2020Cargotec expects its comparable operating profit for 2020 to improve from 2019(EUR 264 million).

Topic: Stefan Lampa, President of Kalmar Mobile Solutions, will give an update on the mobile solutions business.Date: 26 February, 2020Location: Helsinki, Finland

Please contact Tiina ([email protected]) if you are interested to participate in the event.


Our next event – Meet president Stefan Lampa,Kalmar Mobile Solutions

6 february 2020 cash flow increased - cargotec...cargotec’s financial statements review 2019...

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