CARGOTEC CORPORATION, INITIAL INFORMATION, MARCH 30, 2022 AT 9:00 AM (EEST)
Cargotec refocuses its strategy for better financial performance through sustainability and growth in profitable core businesses; plans to exit Kalmar’s heavy crane business and begins to assess strategic options for MacGregor
Cargotec’s Board of Directors has decided to refocus the company’s strategic direction for better financial performance. Cargotec will focus on the sustainability and growth of the profitable core businesses Hiab, Kalmar Mobile Solutions and Kalmar’s horizontal transport business (“Core Businesses”). Cargotec’s groundbreaking vision and goals of sustainability and profitable growth remain.
Cargotec will initiate an assessment of MacGregor’s strategic options, including a potential sale of the business. The assessment covers the entire industry, including its trading, offshore and service activities. MacGregor is the global leader in sustainable ocean freight and load handling solutions.
Cargotec will also shift Kalmar’s focus to mobile solutions and begin planning an exit from the heavy duty harbor crane business. Going forward, Kalmar will offer eco-efficient cargo handling equipment and life cycle services in the product categories of mobile equipment, straddle carriers and shuttles as well as Bromma spreaders.
Hiab is the world’s leading provider of on-road load handling equipment, smart services, smart and connected solutions and will be at the heart 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 actions planned above, Cargotec plans to review its operating model to support the refocused group. Cargotec’s capital allocation priorities for the next 12 months are expected to be the acceleration of mergers and acquisitions, research and development investments in electrification, robotics and digitalization, as well as Cargotec’s Mission Climate program. .
These planned actions are subject to normal local legal requirements and works council consultation.
Cargotec’s core business will support customers with life cycle services as well as market leading equipment and technology. Automated, robotic and zero-emission equipment helps Kalmar and Hiab customers overcome sustainability challenges.
Based on 2021 figures*, the core businesses would have achieved sales of €2.6 billion, or approximately 80% of Cargotec’s total sales. Core business comparable operating profit margin would have been 10.1%, while Cargotec comparable operating profit margin was 7.0%. Service sales would have accounted for 31% of total core business sales. The main financial indicators for companies in 2021 were as follows:
|EUR in 2021||Hiab||Kalmar excluding heavy harbor cranes||Kalmar Heavy Port Cranes||MacGregor|
|Comparable operating profit %||13.3%||10.1%||-20.8%||-2.7%|
|Backlog, end of period||985||1,151||151||560|
*Hiab and MacGregor figures are based on review of Cargotec’s audited financial statements for 2021. Kalmar and core business figures are management estimates and do not include the Navis divested software business. The consolidation of Navis ended on July 1, 2021. Cargotec’s comparable operating profit for 2021 includes Navis and corporate administration and support functions.
The decision of the Board of Directors does not impact Cargotec’s outlook for 2022 published on February 3, 2022 in conjunction with the review of the company’s 2021 financial statements. Cargotec expects its comparable operating profit for 2022 to improve compared to 2021 (232 million euros).
“This strategic direction and the refocusing of Cargotec demonstrates our commitment to profitable growth, sustainability and the excellence of our people who adapt to new challenges. The Board of Directors is convinced that the time has come to ensure an accelerated but orderly transition towards an even more profitable and sustainable activity. says Ilkka Herlin, Chairman of the Board of Cargotec.
“Cargotec refined its strategy in April 2021 with sustainability and profitable growth as decisive objectives. Our vision remains, but we will focus our activities more. This would enable us to accelerate M&A and R&D investments in our profitable core business and I am confident that with our refocused strategic focus, we will be well positioned to capture the growth of industry trends in ‘electrification, automation and digitization,’ said Mika Vehviläinen, CEO of Cargotec.
“With this planned balanced portfolio, we will support our customers with lifecycle services as well as advanced equipment and technology in our profitable core businesses Hiab and refocused Kalmar. These are recurring activities with already more than 10% comparable operating profit margins. The markets are structurally attractive and we hold leading positions there. We now plan to exit or evaluate strategic options for project activities where we have been less successful,” continues Vehviläinen.
Cargotec invites analysts, investors and the media to an update to be held online today Wednesday, March 30, 2022 at 10:00 a.m. EEST to discuss today’s announcement. The event will consist of a presentation given by Cargotec CEO Mika Vehviläinen, followed by a Q&A session moderated by CEO Mika Vehviläinen and CFO Mikko Puolakka. The language of the event and presentation material is English.
The event can be viewed live on the web at https://cargotec.videosync.fi/2022-march-webcast.
The event is also accessible by phone 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
UK: +44 3333 000804
USA: +1 6319 131422
No pre-registration is required and presentation material will be made available on the Cargotec website prior to the event. The event will be recorded and an on-demand version of the call will be posted on Cargotec’s website later today.
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 life through its leading cargo handling solutions and services. Cargotec’s business areas Kalmar, Hiab and MacGregor are pioneers in their fields. With their unique position in ports, at sea and on the road, they optimize global freight flows and create lasting customer value. Cargotec has signed the United Nations Global Compact Business Ambition for 1.5°C. The company’s sales in 2021 totaled around 3.3 billion euros and it employs around 11,000 people.