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Cargotec's January-March 2018 interim report: Good demand in Hiab continued

CARGOTEC CORPORATION, Q1 2018 INTERIM REPORT, 24 APRIL 2018 AT 2.00 PM EEST

Cargotec's January-March 2018 interim report: Good demand in Hiab continued

  • Kalmar's operating profit increased

  • Good demand for Hiab's solutions continued

  • MacGregor is recovering slowly

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.

January-March 2018 in brief: Orders received at last year's level

  • Orders received increased by 1 percent and totalled EUR 863 (857) million.

  • Order book amounted to EUR 1,684 (31 Dec 2017: 1,566) million at the end of the period.

  • Sales decreased by 2 percent and totalled EUR 773 (792) million.

  • Service sales totalled EUR 226 (224) million.

  • Service and software sales represented 33 (33) percent of consolidated sales.

  • Operating profit was EUR 53.2 (56.0) million, representing 6.9 (7.1) percent of sales.

  • Operating profit excluding restructuring costs decreased by 3 percent and amounted to EUR 57.0 (58.9) million, representing 7.4 (7.4) percent of sales.

  • Cash flow from operations before financial items and taxes totalled EUR -3.7 (12.5) million.

  • Net income for the period amounted to EUR 33.7 (36.2) million.

  • Earnings per share was EUR 0.52 (0.56).

Outlook for 2018 unchanged

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).

 

Cargotec's key figures

MEUR Q1/18 Q1/17 Change 2017
Orders received 863 857 1% 3,190
Service orders received 239 235 2% 896
Order book, end of period 1,684 1,821 -8% 1,566
Sales 773 792 -2% 3,250
Service sales 226 224 1% 907
Software sales* 32 35 -10% 152
Service and software sales,
% of Cargotec's sales
33% 33%   33%
Operating profit 53.2 56.0 -5% 222.1
Operating profit, % 6.9% 7.1%   6.8%
Operating profit** 57.0 58.9 -3% 258.6
Operating profit**, % 7.4% 7.4%   8.0%
Income before taxes 46.4 47.7 -3% 189.2
Cash flow from operations before financing items and taxes -3.7 12.5 -130% 253.5
Net income for the period 33.7 36.2 -7% 132.7
Earnings per share, EUR 0.52 0.56 -7% 2.05
Interest-bearing net debt, end of period 575 631 -9% 472
Gearing, % 41.5 % 45.3%   33.1%
Interest-bearing net debt / EBITDA*** 2.0 2.2   1.6
Return on capital employed
(ROCE, annualised), %
9.4 % 9.4%   9.6%
Personnel, end of period 11,498 11,055 4% 11,251

*Software sales include Navis business unit and automation software
**Excluding restructuring costs
***Last four quarters' EBITDA

Cargotec's CEO Mika Vehviläinen: Good demand continued in Hiab, good development in service business

Our total orders received during the first quarter of 2018 were at last year's level. In comparable foreign exchange rates, our order intake grew seven percent. The difference is particularly related to the weakening of the US dollar compared to euro. Orders received grew in Hiab and MacGregor, and were close to last year's level in Kalmar.

Our first quarter's operating profit declined slightly compared to the comparison period. Kalmar's operating profit grew. Hiab's operating profit declined, but mainly due to the weakening of the US dollar. MacGregor's operating profit declined because of lower sales resulting from the difficult market situation.

Our software business developed well during the first quarter from a strategic viewpoint, even though sales remained at last year's level in comparable foreign exchange rates. In recent years, we have invested in the development of the XVELA software which markedly increases the efficiency of the container handling chain. XVELA is a digital collaboration platform, which enables various parties in the chain to streamline the increasingly complex ocean supply chain, improve collaboration and deliver goods more efficiently. The commercialisation of XVELA is proceeding well and six carriers already use the software. A good example of the positive development in the software business was the agreement with Cosco Shipping Ports Ltd. for the Navis N4 terminal operating system. We proceeded well also in the service business: our service sales grew seven percent in comparable foreign exchange rates.

Reporting segments' key figures


Orders received

MEUR Q1/18 Q1/17 Change 2017
Kalmar 432 448 -3% 1,555
Hiab 307 288 7% 1,116
MacGregor 124 121 2% 521
Internal orders 0 0   -2
Total 863 857 1% 3,190

Order book

MEUR 31 Mar 2018 31 Dec 2017 Change
Kalmar 837 786 6% %
Hiab 329 300 10% %
MacGregor 519 481 8%
Internal orders -1 -1  
Total 1,684 1,566 8%


Sales

MEUR Q1/18 Q1/17 Change 2017
Kalmar 371 364 2% 1,598
Hiab 276 270 2% 1,084
MacGregor 126 158 -20% 571
Internal sales 0 0   -2
Total 773 792 -2% 3,250


Operating profit

MEUR Q1/18 Q1/17 Change 2017
Kalmar 27.9 26.6 5% 126.6
Hiab 36.1 39.5 -9% 157.0
MacGregor 0.1 1.6 -92% -5.2
Corporate administration and support functions -10.9 -11.7 7% -56.3
Total 53.2 56.0 -5% 222.1


Operating profit excluding restructuring costs

MEUR Q1/18 Q1/17 Change 2017
Kalmar 28.7 27.9 3% 133.1
Hiab 36.1 39.5 -9% 157.2
MacGregor 0.2 2.2 -91% 10.6
Corporate administration and support functions -8.0 -10.7 25% -42.2
Total 57.0 58.9 -3% 258.6

 

Press conference for analysts and media

A press conference for analysts and media, combined with a live international telephone conference, will be arranged on 24 April 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 using the following numbers with access code 247024 and PIN code 000000:

FI: +358 (0)9 7479 0360
SE: +46 (0)8 5033 6573
UK: +44 (0)330 336 9104
US: +1 929-477-0443

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