₋ Good level of orders received at Kalmar and Hiab
₋ Service orders received increased by 16 percent
₋ Restructuring costs weakened the result
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.
April–June 2018 in brief: Strong development in Kalmar’s orders
● Orders received increased by 23 percent and totalled EUR 981 (800) million. Orders received grew strongly especially at Kalmar.
● Order book amounted to EUR 1,786 (31 Dec 2017: 1,566) million at the end of the period.
● Sales decreased by 2 percent and totalled EUR 816 (836) million.
● Service sales increased by 5 percent and totalled EUR 235 (223) million.
● Service and software sales represented 32 (32) percent of consolidated sales.
● Operating profit was EUR 21.3 (58.9) million, representing 2.6 (7.0) percent of sales. Operating profit includes EUR 34.9 (11.7) million restructuring costs.
● Operating profit excluding restructuring costs decreased by 20 percent and amounted to EUR 56.3 (70.6) million, representing 6.9 (8.4) percent of sales. Kalmar’s operating profit decreased due to a less favorable business mix, and especially weaker US dollar compared to the euro had a negative impact on Hiab’s profitability.
● Cash flow from operations before financial items and taxes totalled EUR 26.5 (40.2) million.
● Net income for the period amounted to EUR 2.3 (36.4) million.
● Earnings per share was EUR 0.03 (0.56).
January–June 2018 in brief: Growth in orders received
● Orders received increased by 11 percent and totalled EUR 1,844 (1,657) million.
● Sales decreased by 2 percent and totalled EUR 1,589 (1,628) million.
● Service sales increased by 3 percent and totalled EUR 460 (446) million.
● Service and software sales represented 33 (32) percent of consolidated sales.
● Operating profit was EUR 74.5 (114.9) million, representing 4.7 (7.1) percent of sales.
● Operating profit excluding restructuring costs decreased by 13 percent and amounted to EUR 113.2 (129.5) million, representing 7.1 (8.0) percent of sales.
● Cash flow from operations before financial items and taxes totalled EUR 22.8 (52.6) million.
● Net income for the period amounted to EUR 36.0 (72.6) million.
● Earnings per share was EUR 0.55 (1.13).
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
Cargotec’s CEO Mika Vehviläinen: Strong development in orders received
Cargotec’s second quarter of 2018 was strong with regard to orders received. Orders received grew in Kalmar and Hiab in the second quarter and were 23 percent higher than in the comparison period. Our sales were almost at the previous year’s level, but restructuring costs had a significant negative impact on earnings per share. We proceeded according to our strategy in shaping our portfolio by divesting Kalmar Rough Terrain Center and Siwertell, both of which are outside Kalmar’s core areas.
We continued to implement our strategy with determination. I am particularly pleased with the service business development in the second quarter, as we were able to increase the orders received there by 16 percent. The performance supports our key strategic goal of achieving EUR 1.5 billion service and software sales in 3–5 years. We also progressed with digitalisation and leadership, our two other strategic focus areas. During the second quarter, we developed a number of solutions that utilise artificial intelligence, as well as advanced analytics to improve eco-efficiency, preventive maintenance and crane balancing, for example. In leadership, we took steps to continuously improving team climates.
One of the highlights during this quarter was Kalmar’s agreement to deliver an advanced automation solution to Sydney, Australia, valued at approximately 80 million euros. The order is particularly significant as it is the world’s first fully automated intermodal solution for an inland terminal. In addition, Kalmar will deliver a unique digitalised container handling solution with fully autonomous equipment, software and services to Yara’s Porsgrunn facility in Norway. The solution enables autonomous, cost-efficient and emissions-free operations of the Yara Birkeland container ship. These orders highlight the technical advancement of Kalmar’s solutions and tell about the success of our investments in the automation development.
During the quarter, we took major steps also in sustainability. In May, we announced Kalmar’s commitment to reduce emissions in cargo and material handling operations by fostering eco-efficient technologies. According to the commitment, Kalmar’s full offering will be available as electrically powered versions by 2021. We believe that our strong investments in eco-efficient technologies will give us a significant competitive advantage in the future, when both our customers and legislation increasingly require low-emission solutions.