2006 Financial Statements Review President and CEO Mikael Mkinen - - PowerPoint PPT Presentation

January 30, 2007

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2006 Financial Statements Review President and CEO Mikael Mäkinen

January 30, 2007 2

Key financials for 2006

• Orders received grew significantly and reached MEUR 2,910 (pro

forma 2005: 2,385). Q4 order intake was MEUR 716

• Net sales grew by 10% and totaled MEUR 2,597 (2 358)
• Operating income from operations rose markedly to MEUR 221.7

(179.4), representing 8.5 (7.6)% of net sales

• Operating income including MEUR 17.8 capital gain recorded in July

from the divestment of property totaled MEUR 239.5 (MEUR 194.8

• incl. MEUR 15.4 milj. capital gain from Consolis)
• Board’s dividend proposal to AGM on Feb 26, 2007 is EUR 1.00 per

class B and EUR 0.99 per class A share

January 30, 2007 3

Strategic development during 2006

• Cargotec’s vision and strategic priorities were defined during autumn

– Cargotec’s strategy is based on profitable growth in developing and consolidating markets – Focus is on expanding the business especially in Asia Pacific and Americas – Within services the target is a leading position – Utilization of know-how and scale benefits in technology development and global network – More investment in personnel development

• Executive Board was strengthened
• Global sales and service network was expanded
• Hiab and Kalmar invested in increasing flexibility of operations in

production units

January 30, 2007 4

Acquisitions during 2006

• Tail lift manufacturer AMA in Poland
• Port services company ECC in U.S. East Coast and Gulf
• BMH Marine dry bulk handling equipment on ships and at

port terminals

• Service company Grampian Hydraulics for support vessels
• Kalmar distributor and service company ANE in South Africa
• Distribution and service company Catracom in Belgium

Total 2006 effect on sales approx. MEUR 50 and on personnel 465

• Distribution and service company Kalmar España in Spain*
• Container handling equipment and service company CVS

Ferrari in Italy*

*Require competition authority approval

January 30, 2007 5

Business environment was favourable…

• Global economy and world trade developed strongly
• Container traffic volumes continued to grow
• Shipbuilding on high level at ship yards
• Demand for load handling equipment strong despite levelling
• ff in U.S. building materials supply
• Healthy demand for services

January 30, 2007 6

… influencing Cargotec’s orders received

• Hiab

– Demand for load handling equipment was buyoant, especially for loader cranes in Europe

• Kalmar

– Record demand for reach stackers, while markets for yard cranes, straddle carriers and terminal tractors were also very good – Healthy demand for heavy industrial handling equipment

• MacGREGOR

– Markets for hatch covers, ship cranes and cargo securing equipment buoyant – High demand for RoRo systems – Bulk handling equipment markets strong

January 30, 2007 7

Growth in orders received continued in Q4

MEUR +22% +21% 716 591 1,848 2,337 2,910 2,385 500 1,000 1,500 2,000 2,500 3,000 2003 Pro forma 2004 Pro forma 2005 Pro forma 2006 10-12/05 10-12/06

January 30, 2007 8

Order book at record level

MEUR

*Pro forma

1,621 1,594 1,544 1,439 1,257 1,281 1,287 1,345 1,219 1,173 1,123 897 807 300 600 900 1,200 1,500 1,800 3 1 . 1 2 . 3 * 3 1 . 3 . 4 * 3 . 6 . 4 * 3 . 9 . 4 * 3 1 . 1 2 . 4 * 3 1 . 3 . 5 * 3 . 6 . 5 3 . 9 . 5 3 1 . 1 2 . 5 3 1 . 3 . 6 3 . 6 . 6 3 . 9 . 6 3 1 . 1 2 . 6

January 30, 2007 9

Net sales growth continued - Q4 sales record high

MEUR +12% +10% 697 2,597 1,658 2,358 1,900 622 400 800 1,200 1,600 2,000 2,400 2,800 2003 Pro forma 2004 Pro forma 2005 Pro forma 2006 10-12/05 10-12/06

January 30, 2007 10

Geographical development of net sales

Americas Asia Pacific EMEA MEUR +26% +16% +2%

*Pro forma 1,072 1,368 476 620 1,335 720 509 403 352

300 600 900 1,200 1,500

2004* 2005* 2006 2004* 2005* 2006 2004* 2005* 2006

January 30, 2007 11

Services grew by 16% y-on-y representing 22% of net sales

95 109 223 267 110 134 311 116 128

50 100 150 200 250 300 350

2004* 2005* 2006 2004* 2005* 2006 2004* 2005* 2006

10 20 30 40 50 Hiab MacGREGOR Kalmar % of net sales MEUR

% *Pro forma

January 30, 2007 12

Operating income improved markedly

58 53 222 179 85 15 124 15 18

50 100 150 200 250 2003 Pro forma 2004 Pro forma 2005 Pro forma 2006 10-12/05 10-12/06 MEUR 240 68

Capital gain on Consolis

195

Capital gain on property

January 30, 2007 13

86.0 9.4% 111.7 9.3% 35.9 7.5% 221.7 8.5% 22.7 9.5% 28.2 8.8% 9.7 7.0% 57.7 8.3%

Operating income from operations by business area

MEUR Hiab % Kalmar % MacGREGOR % Cargotec total % Pro forma 2005 10-12/2006 2006 Pro forma 2004 44.6 6.4% 66.4 7.7% 20.9 6.2% 123.9 6.5% 20.1 8.7% 27.0 9.4% 8.5* 8.2%* 52.7* 8.5%* 10-12/2005 66.6 7.9% 97.6 8.5% 27.5 7.5% 179.4 7.6%

*Excluding impact of the final accounting of MacGREGOR acquisition

January 30, 2007 14

1.00 2.57 2.11 1.20 0.00 0.50 1.00 1.50 2.00 2.50 3.00 2003 Pro forma 2004 Pro forma 2005 Pro forma 2006 Dividend proposal for class B share EUR

Earnings per share (basic)

39% of earnings 0.81

January 30, 2007 15

Cash flow from operating activities before financial items and taxes

MEUR 250 147 194 158

50 100 150 200 250 300 2003 Pro forma 2004 Pro forma 2005 Pro forma 2006

January 30, 2007 16

Key figures

Pro forma Pro forma 2006 2005 2004 Earnings per share EUR 2.57 2.11 1.20 Equity per share EUR 13.72 11.93 10.17 Interest-bearing net debt MEUR 107.5 120.5 281.4 Total equity/total assets % 47.6 46.2 42.2 Gearing % 12.3 15.7 43.0 Return on equity % 20.2 19.2 12.6 Return on capital employed % 23.1 20.9 12.9

January 30, 2007 17

New financial targets published on Jan 17, 2007

Annual net sales growth exceeding 10 percent (incl. acquisitions) Raising the operating income margin to 10 percent

Gearing below 50% Dividend 30-50% of earnings per share

January 30, 2007 18

Strategy implementation continues in 2007

Focus areas are:

• Development and expansion of services
• R&D investments
• Personnel development
• Improving efficiency of sourcing
• Continued growth of global network

Acquisitions have continued:

• Service company Tagros in Slovenia
• Berger sales and distribution network in Eastern Europe*
• Sales and service company Truck och Maskin i Örnsköldsvik in Northern

Sweden**

• Increased equity stake in distribution and service company BG Crane in

Australia

*Requires completion of due diligence ** Requires competition authority approval

January 30, 2007 19

Outlook

• Cargotec’s market outlook for 2007 is positive.
• The high market activity and strong order book in all

business areas give a good start for the year.

• Completed and targeted acquisitions will support further

sales growth.

• Operating income from operations in 2007 is expected to

continue to increase although the operating margin development will be slightly affected by planned investments in future growth.