Cash flow increased Excellent year in Kalmar and Hiab - - PowerPoint PPT Presentation

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Cash flow increased Excellent year in Kalmar and Hiab - - PowerPoint PPT Presentation

Oct 04, 2022 33 likes •285 views

6 February 2020 Cash flow increased Excellent year in Kalmar and Hiab significantly Good development in service business Strong order book Cargotecs financial statements review 2019 Mika Vehvilinen, CEO Mikko

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SLIDE 1

Cash flow increased significantly

6 February 2020

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

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

  • Excellent year in Kalmar

and Hiab

  • Good development in

service business

  • Strong order book
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SLIDE 2

Contents

1. Group level development 2. Strategic options in Navis business 3. Business areas 4. Financials, dividend and outlook

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SLIDE 3

6/2/2020 Cargotec’s financial statements review 2019 3

Highlights of 2019 – Comparable operating profit and sales increased

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

149 231 250 259 242 264 4.4% 6.2% 7.1% 8.0% 7.3% 7.2% 2014 2015 2016 2017 2018 2019 Comparable operating profit EUR million Comparable 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

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SLIDE 4

6/2/2020 Cargotec’s financial statements review 2019 4

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

500 1,000 1,500 2,000 2018 2019

91 60

100 200 300 400 500 2018 2019

752 754

200 400 600 800 2018 2019

726 746

200 400 600 800 2018 2019

784 802

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 average Historical average

  • 34%
  • 9%
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SLIDE 5

6/2/2020 Cargotec’s financial statements review 2019 5

432 550 486 450 516 417 396 446 307 301 294 357 341 340 307 322 124 131 141 184 165 116 156 193 863 981 921 991 1,022 872 858 962 200 400 600 800 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 3,714 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 2018 2019 Kalmar Hiab MacGregor

+5% (y/y)

  • 10%

(y/y)

  • 1%

(y/y)

  • 1%

(y/y)

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

1,012 1,127 1,101 1,083 1,049 453 483 453 458 406 530 536 519 712 633 1,995 2,145 2,072 2,251 2,089 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 2,200 2,400 Q4/18 Q1/19 Q2/19 Q3/19 Q4/19 Kalmar Hiab MacGregor

Order book increased compared to 2018, driven by MacGregor and Kalmar

Order book

MEUR

  • 11%

(y/y)

Order book by reporting segment, Q4 2019

50% 20% 30%

Kalmar Hiab MacGregor

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SLIDE 7

6/2/2020 Cargotec’s financial statements review 2019 7

Sales

MEUR

Comparable operating profit

MEUR

Sales increased in all business areas, comparable

  • perating profit burdened by MacGregor’s weak result

58 70 57 64 68 74

  • 20
  • 10

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

444 401 427 424 471 318 316 358 307 368 149 139 127 170 176 910 856 911 901 1,015 250 500 750 1,000 1,250 Q4/18 Q1/19 Q2/19 Q3/19 Q4/19 Kalmar Hiab MacGregor

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6/2/2020 Cargotec’s financial statements review 2019 8

Service and software* sales

MEUR 257 249 259 269 285 47 38 41 44 46 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 1,062 147 168 300 600 900 1,200 1,500 2018 2019

1,127 1,230 1,126

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  • 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

  • perating systems (TOS), and more than doubled

revenue to EUR 115 million in 2019

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

Cargotec to evaluate strategic options for Navis business

Cargotec’s financial statements review 2019

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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 services Advanced robotics

Cargotec’s financial statements review 2019

Evaluating ecosystem play Continuous development of equipment, spare parts and maintenance services

3 2 1

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Business areas

Cargotec’s financial statements review 2019

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SLIDE 12

Cargotec’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

  • perating

profit 44 51

  • 14%

Comparable

  • perating

profit 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

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SLIDE 13

Cargotec’s financial statements review 2019

MEUR Q4/19 Q4/18 Change

Orders received 322 357

  • 10%

Order book 406 453

  • 10%

Sales 368 318 +16% Comparable

  • perating

profit 52 35 +49% Comparable

  • perating

profit margin 14.1% 11.0% +310bps

Hiab Q4 – Strong improvement in

  • perating 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

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SLIDE 14

Cargotec’s financial statements review 2019

MEUR Q4/19 Q4/18 Change

Orders received 193 184 +5% Order book 633 530 +20% Sales 176 149 +18% Comparable

  • perating

profit

  • 13
  • 7
  • 84%

Comparable

  • perating

profit margin

  • 7.1%
  • 4.6%
  • 255bps

Orders received increased by 5%

  • Orders received excl. TTS -8%
  • Decline in merchant, increase in
  • ffshore (+35%) and service orders

(+36%)

Sales increased by 18%

  • Sales excl. TTS -3%
  • Service sales +26%

Comparable operating profit declined

  • Cost overruns in certain offshore

projects, low capacity utilisation, lower sales margins

  • Productivity improvements ongoing

MacGregor Q4 – Loss making in Q4, service sales increased

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SLIDE 15

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

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Financials, dividend and outlook

Cargotec’s financial statements review 2019

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6/2/2020 Cargotec’s financial statements review 2019 17

Key figures – EPS burdened by restructuring costs

10-12/19 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

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

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SLIDE 18

6/2/2020 Cargotec’s financial statements review 2019 18

Cash flow improved significantly

204 315 373 253 126 361

  • 4

27 17 86 31 41 81 208

  • 50

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 taxes

MEUR

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6/2/2020 Cargotec’s financial statements review 2019 19

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 increased mainly 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

271 173 189 143 113 135 200 50 100 150 200 250 300 2020 2021 2022 2023 2024 2025 Later 578 719 622 503 472 625 586 188 46.7% 59.2% 46.4% 36.0% 43.8% 54.2% 0% 20% 40% 60% 200 400 600 800 1,000 1,200 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.

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Cargotec’s financial statements review 2019 20

ROCE decreased compared to 2018, impacted by restructuring costs

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.

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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%

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

 Payout ratio 1.11 2.21 1.95 2.05 1.66 1.39 0.55 0.80 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%

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Assumptions for 2020

MacGregor

  • MacGregor’s comparable operating profit is expected to

increase from 2019

  • EUR 15 million cost savings

Productivity improvements in all business areas and corporate Service business is expected to grow Market visibility – uncertain demand

  • Kalmar mobile equipment
  • Hiab

  

Cargotec’s financial statements review 2019

Restructuring

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

estimate

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6/2/2020 Cargotec’s financial statements review 2019 23

Outlook for 2020

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

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Topic: Stefan Lampa, President of Kalmar Mobile Solutions, will give an update on the mobile solutions business. Date: 26 February, 2020 Location: Helsinki, Finland Please contact Tiina (tiina.aaltonen@cargotec.com) if you are interested to participate in the event.

6/2/2020 Cargotec’s financial statements review 2019 24

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

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