CARGOTEC CORPORATION, FINANCIAL STATEMENTS REVIEW 2023, 1 FEBRUARY 2024 AT 9:00 AM (EET)
Cargotec's financial statements review 2023: Record year in sales and profitability
- Orders received in Q4 improved from Q3 and amounted to 1,015 MEUR
- Sales increased by 12 percent to EUR 4,569 million and comparable operating profit by 62 percent to EUR 513 million in 2023
- Record-high operative cash flow of 544 MEUR in 2023
- MacGregor turnaround progressing according to the plan
The figures in this financial statements review are based on Cargotec Corporation’s audited 2023 financial statements.
October–December 2023 in brief: Record cash flow
- Orders received decreased by 15 percent and totalled EUR 1,015 (1,190) million.
- Order book amounted to EUR 2,812 (31 Dec 2022: 3,541) million at the end of the period.
- Sales decreased by 4 percent and totalled EUR 1,193 (1,239) million.
- Service sales increased by less than 1 percent and totalled EUR 355 (354) million.
- Service sales represented 30 (29) percent of consolidated sales.
- Eco portfolio sales increased by 3 percent and totalled EUR 404 (392) million.
- Eco portfolio sales represented 34 (32) percent of consolidated sales.
- Operating profit was EUR 89 (-29) million, representing 7.5 (-2.3) percent of sales. The operating profit includes items affecting comparability worth EUR -22 (-114) million.
- Comparable operating profit increased by 31 percent and amounted to EUR 111 (85) million, representing 9.3 (6.8) percent of sales.
- Cash flow from operations before finance items and taxes totalled EUR 292 (147) million.
- Profit for the period amounted to EUR 61 (-68) million.
- Basic earnings per share was EUR 0.92 (-1.04).
January–December 2023 in brief: Record sales, profitability and cash flow
- Orders received decreased by 18 percent and totalled EUR 3,987 (4,862) million.
- Order book amounted to EUR 2,812 (31 Dec 2022: 3,541) million at the end of the period.
- Sales increased by 12 percent and totalled EUR 4,569 (4,089) million.
- Service sales increased by 9 percent and totalled EUR 1,379 (1,264) million.
- Service sales represented 30 (31) percent of consolidated sales.
- Eco portfolio sales increased by 18 percent and totalled EUR 1,515 (1,288) million.
- Eco portfolio sales represented 33 (31) percent of consolidated sales.
- Operating profit was EUR 484 (106) million, representing 10.6 (2.6) percent of sales. The operating profit includes items affecting comparability worth EUR -30 (-210) million.
- Comparable operating profit increased by 62 percent and amounted to EUR 513 (316) million, representing 11.2 (7.7) percent of sales.
- Cash flow from operations before finance items and taxes totalled EUR 544 (231) million.
- Profit for the period amounted to EUR 349 (23) million.
- Basic earnings per share was EUR 5.38 (0.37).
Outlook for 2024
Cargotec estimates1 Hiab’s comparable operating profit margin in 2024 to be above 12 percent, Kalmar’s comparable operating profit margin in 2024 to be above 11 percent, and MacGregor’s comparable operating profit in 2024 to improve from 2023 (EUR 33 million).
Cargotec’s key figures
| MEUR | Q4/23 | Q4/22 | Change | 2023 | 2022 | Change |
| Orders received | 1,015 | 1,190 | -15% | 3,987 | 4,862 | -18% |
| Service orders received | 331 | 345 | -4% | 1,331 | 1,286 | 3% |
| Order book, end of period | 2,812 | 3,541 | -21% | 2,812 | 3,541 | -21% |
| Sales | 1,193 | 1,239 | -4% | 4,569 | 4,089 | 12% |
| Service sales | 355 | 354 | 0% | 1,379 | 1,264 | 9% |
| Service sales, % of sales | 30 % | 29% | 30% | 31% | ||
| Eco portfolio sales | 404 | 392 | 3% | 1,515 | 1,288 | 18% |
| Eco portfolio sales, % of sales | 34% | 32% | 33% | 31% | ||
| Operating profit | 89.0 | -28.8 | > 100% | 483.8 | 106.1 | > 100% |
| Operating profit, % | 7.5% | -2.3% | 10.6% | 2.6% | ||
| Comparable operating profit | 111.2 | 84.8 | 31% | 513.3 | 316.4 | 62% |
| Comparable operating profit, % | 9.3% | 6.8% | 11.2% | 7.7% | ||
| Profit before taxes | 81.9 | -40.6 | > 100% | 453.0 | 79.0 | > 100% |
| Cash flow from operations before finance items and taxes | 292.1 | 147.2 | 98% | 544.2 | 231.2 | > 100% |
| Profit for the period | 61.3 | -67.6 | > 100% | 348.7 | 23.2 | > 100% |
| Basic earnings per share, EUR | 0.92 | -1.04 | > 100% | 5.38 | 0.37 | > 100% |
| Interest-bearing net debt, end of period | 179 | 378 | -53% | 179 | 378 | -53% |
| Gearing, % | 10.2% | 24.8% | 10.2% | 24.8% | ||
| Interest-bearing net debt / EBITDA* | 0.3 | 1.2 | 0.3 | 1.2 | ||
| Return on capital employed (ROCE), last 12 months, % | 19.9% | 4.6% | 19.9% | 4.6% | ||
| Personnel, end of period | 11,391 | 11,526 | -1% | 11,391 | 11,526 | -1% |
* Last 12 months’ EBITDA
Cargotec changed the definition of the alternative performance measure comparable operating profit starting from 1 January 2023. The restated comparable operating profit will also include the impacts of the purchase price allocation, which amounted to EUR 16 million in 2022. Of these items, EUR 1 million were related to Kalmar, EUR 3 million to Hiab, and EUR 12 million to MacGregor. Additional information regarding the changed definition is presented in the stock exchange release published on 4 April 2023.
Cargotec’s eco portfolio criteria has been revised and the 2022 eco portfolio sales has been restated accordingly.
Cargotec has revised its second quarter 2023 eco portfolio sales. Initially reported EUR 362 million has been revised to EUR 397 million which represented 33 percent of Cargotec's consolidated sales in the second quarter.
Cargotec’s President and CEO Casimir Lindholm: Momentous year for the company
The year 2023 was a step change for Cargotec in many ways, with good results for four consecutive quarters. As a result we reached record-high sales, comparable operating profit and cash flow for the full year. In April we announced our plan to separate our core businesses Kalmar and Hiab into two world-leading standalone companies.
Business environment in 2023 was complex due to e.g. geopolitical tensions, high interest rates, and low consumer confidence. On one hand we harvested on our high order book, which was collected in 2021 and 2022. Hence, our sales in 2023 increased by 12 percent to EUR 4,569 million. Also service sales and eco portfolio sales reached all-time high levels. Driven by higher sales, successful management of inflationary pressures as well as MacGregor turnaround, our comparable operating profit improved by 62 percent to EUR 513 million, representing 11.2 percent of the consolidated sales.
On the other hand, orders received were on a lower level than in the exceptional years of 2021 and 2022. We addressed the lower order intake with cost saving actions announced in October, aiming for EUR 50 million annual fixed cost savings in 2024. The actions have progressed according to our expectations. We reduced approximately 300 roles globally in the fourth quarter related to the cost savings and we are confident reaching the target.
In the fourth quarter, demand for our solutions stabilised and improved by 11 percent from the seasonally somewhat lower third quarter. Our sales amounted to EUR 1,193 million and comparable operating profit to EUR 111 million in the quarter.
In Kalmar, the fourth quarter was a strong finish for a record year. Demand was stabilising and orders received improved from the third quarter. Successful delivery of the order book and management of inflationary pressures resulted in continued high profitability. Kalmar’s comparable operating profit in the fourth quarter was EUR 67 million, representing 13.1 percent of Kalmar’s sales. One-off costs related to cost saving actions announced in October had a EUR 5 million negative impact.
In Hiab, the quarter was the fifth quarter in a row with a stable level of orders received. Hiab’s sales decreased slightly. Hiab’s comparable operating profit declined to EUR 48 million, representing 10.6 percent of Hiab’s sales, impacted by EUR 16 million one-off costs related to cost saving actions announced in October as well as investments supporting growth. The full year comparable operating profit of EUR 252 million was record-high for Hiab.
Amid all the other actions, MacGregor is undergoing a successful turnaround according to the plan. Demand for its merchant and service solutions in the fourth quarter continued at a healthy level, resulting in a 7 percent increase in MacGregor’s order book compared to the end of 2022. Sales growth in merchant and services businesses, combined with reduced losses in the offshore business, resulted in the highest quarterly comparable operating profit, EUR 13 million, in nine years. However, there are still challenges related to a few offshore projects we have committed to in the past. Without the loss-making offshore business, MacGregor’s comparable operating profit margin would have been around 10 percent.
2024 will be another exciting year for Cargotec. We will continue to focus on executing the planned partial demerger and continue to look for a solution for MacGregor. In addition, we are well-prepared to respond to the prevailing market conditions as we progress on our journey towards two world-leading listed companies. To increase transparency, and in line with the intended separation of our three businesses, we publish our outlook for 2024 separately for our business areas. We estimate that Hiab’s comparable operating margin would be above 12 percent, Kalmar’s above 11 percent and that MacGregor’s comparable operating profit would improve from 2023 as part of Cargotec Group.
Our operative cash flow in 2023 was all-time high and our balance sheet is very strong. Our gearing is only 10.2 percent. Hence, the Board of Directors proposes to the Annual General Meeting that a record dividend of EUR 2.14 for each class A share and EUR 2.15 for each outstanding class B share be paid, corresponding to a 40 percent payout ratio. The balance sheet position gives an excellent foundation for our businesses in their planned standalone future.
I want to thank our employees for the hard work in a successful year 2023 as well as our customers and shareholders for their trust.
Reporting segments’ key figures
Orders received
| MEUR | Q4/23 | Q4/22 | Change | 2023 | 2022 | Change |
| Kalmar | 405 | 544 | -26% | 1,705 | 2,081 | -18% |
| Hiab | 401 | 377 | 6% | 1,466 | 1,807 | -19% |
| MacGregor | 209 | 269 | -22% | 816 | 976 | -16% |
| Internal orders | 0 | 0 | 0 | 0 | ||
| Total | 1,015 | 1,190 | -15% | 3,987 | 4,862 | -18% |
Order book
| MEUR | 31 Dec 2023 | 31 Dec 2022 | Change |
| Kalmar | 1,024 | 1,428 | -28% |
| Hiab | 799 | 1,185 | -33% |
| MacGregor | 988 | 927 | 7% |
| Internal order book | 1 | 1 | |
| Total | 2,812 | 3,541 | -21% |
Sales
| MEUR | Q4/23 | Q4/22 | Change | 2023 | 2022 | Change |
| Kalmar | 509 | 618 | -18% | 2,050 | 1,943 | 5% |
| Hiab | 450 | 456 | -1% | 1,787 | 1,578 | 13% |
| MacGregor | 234 | 165 | 42% | 733 | 569 | 29% |
| Internal sales | 0 | 0 | 0 | -1 | ||
| Total | 1,193 | 1,239 | -4% | 4,569 | 4,089 | 12 % |
Operating profit
| MEUR | Q4/23 | Q4/22 | Change | 2023 | 2022 | Change |
| Kalmar | 58.9 | 67.0 | -12% | 264.2 | 142.1 | 86% |
| Hiab | 47.8 | 61.3 | -22% | 252.1 | 217.1 | 16% |
| MacGregor | 6.7 | -143.6 | > 100% | 31.8 | -190.2 | > 100% |
| Corporate administration and support functions | -24.3 | -13.5 | -80% | -64.4 | -62.9 | -2% |
| Total | 89.0 | -28.8 | > 100% | 483.8 | 106.1 | > 100% |
Comparable operating profit*
| MEUR | Q4/23 | Q4/22 | Change | 2023 | 2022 | Change |
| Kalmar | 66.6 | 69.2 | -4% | 279.4 | 189.2 | 48% |
| Hiab | 47.8 | 61.6 | -22% | 252.1 | 220.9 | 14% |
| MacGregor | 13.1 | -34.2 | > 100% | 32.6 | -47.5 | > 100% |
| Corporate administration and support functions | -16.4 | -11.8 | -39% | -50.8 | -46.3 | -10% |
| Total | 111.2 | 84.8 | 31 % | 513.3 | 316.4 | 62 % |
*Cargotec changed the definition of the alternative performance measure comparable operating profit starting from 1 January 2023. The restated comparable operating profit will also include the impacts of the purchase price allocation, which amounted to EUR 16 million in 2022. Of these items, EUR 1 million were related to Kalmar, EUR 3 million to Hiab, and EUR 12 million to MacGregor. Additional information regarding the changed definition is presented in the stock exchange release published on 4 April 2023.
Telephone conference for analysts, investors and media
A live international telephone conference for analysts, investors and media will be arranged on the publishing day at 10:00 a.m. EET. The event will be held in English. The report will be presented by President and CEO of Cargotec, Interim President of Kalmar Casimir Lindholm, CFO Mikko Puolakka, and President of Hiab Scott Phillips. The presentation material will be available at www.cargotec.com by the latest 9:30 a.m. EET.
To ask questions, please join the teleconference by registering via the following link:
https://palvelu.flik.fi/teleconference/?id=10011168. After the registration, the conference phone numbers and a conference ID to access the conference will be provided. Questions can be presented during the conference.
The event can also be viewed as a live webcast at https://cargotec.videosync.fi/2023-q4. The conference call will be recorded and an on-demand version of the conference will be published at Cargotec’s website later during the day.
Please note that by dialling to the conference call, the participant agrees that personal information such as name and company name will be collected.
For further information, please contact:
Mikko Puolakka, CFO, tel. +358 20 777 4105
Aki Vesikallio, Vice President, Investor Relations, tel. +358 40 729 1670
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 has signed the United Nations Global Compact Business Ambition for 1.5°C. The company's sales in 2023 totalled approximately EUR 4.6 billion and it employs around 11,400 people. www.cargotec.com
1 The business area 2024 profitability outlook is presented using the same principles which are applied in the 2023 external financial reporting.