* Orders received grew by over 40 percent and were EUR 4,106
(1-12/2006: 2,910) million. During the fourth quarter, orders
received amounted to EUR 1,214 (10-12/2006: 716) million.
* The order book strengthened to EUR 2,865 (December 31, 2006:
1,621) million.
* Sales grew by 16 percent and was EUR 3,018 (1-12/2006: 2,597)
million. Sales for the final quarter totalled a record of EUR 868
(10-12/2006: 697) million. Growth was strongest in Asia Pacific.
* Services sales in 2007 grew by 32 percent representing 25 percent
of sales.
* Operating profit for 2007 excluding a one-off cost of EUR 18.0
million in Kalmar business area related to a container spreader
inspection programme was EUR 221.1(1-12/2006: 222.6) million with
EUR 64.3 (10-12/2006: 57.8) million attributable to the fourth
quarter.
* Operating profit for 2007 including the one-off was EUR 203.1
(1-12/2006: 240.4) million with EUR 46.3 (10-12/2006: 57.7)
million attributable to the fourth quarter.
* Cash flow from operating activities before financial items and
taxes totalled EUR 235.1 (1-12/2006: 249.8) million.
* Net income for the period was EUR 138.4 (1-12/2006: 166.1)
million.
* Earnings per share were EUR 2.17 (1-12/2006: 2.57) with EUR 0.45
(10-12/2006: 0.61) attributable to the fourth quarter.
* The number of personnel at the end of the reporting period was
11,187 (December 31, 2006: 8,516). Acquisitions during the year
increased the number of personnel by close to 1,850.
* Board of Directors will propose at the Annual General Meeting
that a dividend of EUR 1.04 per each class A class share and EUR
1.05 per each class B share be paid.
* Investments in the strategic development of Cargotec will
continue and growth in services is expected to remain strong.
Based on the record high order book at the beginning of the year
management estimates sales growth in 2008 to be at the year 2007
level. General market activity and Cargotec's orders received are
expected to continue healthy although in MacGREGOR the
achievement of the exceptionally high order intake level of 2007
is a stretch. Operating margin in 2008 is expected to improve
from the 2007 level. The U.S. market continues weak without yet
any signs of improvement.
The figures in this financial statements review are audited.
Cargotec's President and CEO Mikael Mäkinen:"The year 2007 provided both successes and challenges. Our sales
growth clearly exceeded our financial target. We were extremely
successful in two areas defined as key when sales in both services
and Asia grew significantly. Despite various acquisitions our balance
sheet remained strong. We are not satisfied with the profitability of
our operations although it is partly explained by investments into
Cargotec's strategic development. Nevertheless, we begin this year
with confidence, our persistent work continues."
Press Lunch
Cargotec will arrange a press lunch (in Finnish) on January 31, 2008
at 11.30 a.m. Finnish time at the Company's head office, Sörnäisten
rantatie 23, Helsinki with President and CEO Mikael Mäkinen. Please
inform your registration to Ms. Tiina Aaltonen, tel. +358 204 55
4284.
Analyst Conference
A presentation for investors and analysts at Cargotec's head office,
Sörnäisten rantatie 23, Helsinki, will be combined with a live
international telephone conference on the same day at 1:15 p.m.
Finnish time. The whole combined event will be in English. The
presentation material will be available on the Company's internet
pages by 1:15 p.m. Finnish time.
The conference call phone numbers are the following:
+1 866 966 5335 (if calling from the U.S.)
+44 20 3023 4412 (if calling from rest of world)
The conference can also be viewed as a live audio webcast through the
internet pages at www.cargotec.com starting at 1:15 p.m. Finnish
time. The archived webcast will be available on the internet pages
later the same day.
Sender:
Cargotec Corporation
Kari Heinistö
Senior Executive Vice President and CFO
Eeva Mäkelä
SVP, Investor Relations and Communications
For further information, please contact:
Kari Heinistö, Senior Executive Vice President and CFO, tel. +358 204
55 4256
Eeva Mäkelä, SVP, Investor Relations and Communications, tel. +358
204 55 4281
Cargotec improves the efficiency of cargo flows by offering handling
systems and the related services for the loading and unloading of
goods. Cargotec's brands, Hiab, Kalmar and MacGREGOR, are global
market leaders in their fields and their solutions are used on land
and at sea - wherever cargo is on the move. Extensive repair and
maintenance services close to customers ensure the continuous
usability of equipment. Cargotec is the technology leader in its
field, its R&D focusing on innovative solutions that take
environmental considerations into account. Cargotec's sales are EUR 3
billion and the Company employs over 11,000 people. Cargotec's class
B shares are quoted on the OMX Nordic Exchange Helsinki.
www.cargotec.com
Operating Environment
Demand for Hiab's load handling equipment was very buoyant during
2007 in Europe and Asia Pacific. Demand increased in various customer
segments, particularly in Eastern Europe, Russia and in many markets
of Asia Pacific. The lengthening of truck delivery times in Europe
during the year also lengthened the delivery times of loader cranes
and demountable systems. In the United States, demand for load
handling equipment was weak particularly for truck-mounted forklifts
and tail lifts, following the fall in construction market in late
spring. Demand for new trucks was also sluggish in the United States.
Demand for forestry cranes continued strong in forest machines.
Demand for Kalmar's container handling equipment was healthy
throughout 2007. In particular, demand for reachstackers grew
significantly whereas that for straddle carriers was lower than in
2006. The terminal tractor market slackened somewhat during the
fourth quarter but, considering the whole year, the markets remained
healthy. In the Middle East, market activity was lively. With respect
to heavy industrial forklifts, the markets continued to be very
strong in Europe.
Demand for MacGREGOR's marine cargo flow and offshore solutions was
record-high in 2007. The number of new vessel orders in shipyards
around the world increased. Demand for ship cranes reached a record
level, reflecting strong demand for bulk carriers and general cargo
vessels. The RoRo equipment market was very buoyant, particularly
with respect to PCTCs (pure car and truck carriers). Demand for
offshore solutions was very lively throughout the year with MacGREGOR
securing several major orders. With respect to bulk handling
equipment, markets were strong in Asia and healthy in the Middle East
and Europe.
Demand for Cargotec Services remained favourable throughout the year.
Demand for load handling equipment services was strong in Europe due
to higher levels of installed equipment whereas in the United States
demand fell due to the low usage rate of such equipment. Demand for
container handling equipment services remained high throughout the
year, particularly in Europe and Asia. The market for marine cargo
flow services remained strong, particularly in Europe and Asia. The
conversion of tankers into bulk ships is increasing demand for
conversion projects.
Orders Received
Orders received by Cargotec in 2007 totalled a record high of EUR
4,106 (1-12/2006: 2,910) million. The value of orders secured during
the fourth quarter amounted to EUR 1,214 (10-12/2006: 716) million.
Orders received, MEUR 1-12/2007 1-12/2006
Hiab 985 946
Kalmar 1,429 1,282
MacGREGOR 1,696 684
Internal orders received -4 -2
Total 4,106 2,910
Hiab
Of all orders received in January-December 2007, Hiab accounted for
EUR 985
(1-12/2006: 946) million. Orders received in October-December
totalled EUR 254 (10-12/2006: 241) million.
Hiab secured many large orders in 2007 in addition to numerous
smaller orders. During the fourth quarter the company agreed on the
delivery of 60 tail lifts to the construction industry in the UK. In
December, Hiab signed a contract on the delivery of 157 hooklifts to
the truck manufacturer, MAN Nutzfahrzeuge AG. These hooklifts will be
installed onto MAN trucks and supplied to the German defence forces
during 2008-2012.
Hiab is teamed with BAE Systems, which the Australian Government has
selected as its preferred bidder for an extensive equipment project
of the Australian defence forces. Hiab expects to get confirmed
significant order of cranes and hooklifts during 2008.
During the fourth quarter Hiab strengthened its presence in India
when its newly established sales company signed a contract on the
delivery of 43 load handling equipment for the commercial sector and
waste handling.
Despite weakened demand in the U.S. markets, Hiab received during the
fourth quarter an order for 132 truck-mounted forklifts from a
company specialising in interior decoration supplies and building
materials. Hiab also received significant loader cranes orders from
Mexico.
In July, Hiab and SAWO, Hiab's importer in Denmark, secured an order
for 133 hooklifts and 22 loader cranes from the truck manufacturer
MAN. SAWO installs the equipment on trucks for the Danish Army.
Deliveries started in 2007 and will continue in 2008.
During the second quarter, Hiab signed a contract on the delivery of
22 heavy loader cranes to China Railway Construction Corporation. The
cranes were delivered to a railroad under construction between Wuhan
and Guangzhou in China. In addition, 48 smaller loader cranes were
delivered for the same customer.
During the year, Hiab secured orders for 100 demountable systems from
Pakistan, and an order for 45 forestry cranes for vehicles that will
be delivered to Russia.
Kalmar
Of all orders received in January-December, Kalmar accounted for EUR
1,429
(1-12/2006: 1,282) million. Orders received in October-December
totalled EUR 346 (10-12/2006: 327) million.
In December, Kalmar received an order for more than 200 terminal
tractors from PSA Singapore Terminals. These terminal tractors will
be delivered in 2008 and they will be assembled in the Shanghai
assembly unit in China.
The fourth quarter also saw Kalmar secure an order for two
ship-to-shore cranes (STS) from MSC Home Terminals. These super
post-Panamax cranes will be delivered in 2008. Kalmar also received
an additional order for nine automatic stacking cranes (ASC) from
Hamburger Hafen und Logistik AG (HHLA) for the second phase of the
HHLA Container Terminal Burchardkai. Delivery of the ASCs, along with
their automation and control systems, will commence in 2008.
In August, Kalmar received an order for ten E-One RTGs from Saigon
Newport (SNP) of Vietnam. The environmentally friendly E-One RTGs
will be equipped with the Smartpath® container position verification
system developed by Kalmar and delivered during the autumn of 2008.
This order is a continuation of an order placed by SNP in May for ten
E-One RTGs. In August, Kalmar also received an order for 30 straddle
carriers from the Italian company, Medcenter Container Terminal SpA
(MCT). These straddle carriers will be delivered in 2007-2008 to
MCT's terminal in Gioia Tauro in Southern Italy.
Kalmar launched the E-One+ RTG crane in the summer and received an
order for two such cranes from Peru in August while Gemport, a
Turkish company, ordered five such cranes in October. All of these
RTGs will be fitted with the Smartrail® automatic steering and
container position verification system. The equipment ordered by
Gemport will be also equipped with Kalmar's Remote Machine Interface
(RMI).
In June, Kalmar received an order for ten straddle carriers from MSC
Bremerhaven of Germany and an order for 15 straddle carriers from
Patrick Corporation of Australia. The equipment will be delivered in
2007-2008. In June, Kalmar also agreed on the delivery of 11 E-One
RTGs to the port of Tangier Mediterranean in Morocco. The RTGs will
be fitted with twin-lift spreaders and the Smartrail® system.
During the first quarter, Kalmar signed a contract regarding the
delivery of 84 terminal tractors to the Jebel Ali port near the city
of Dubai. In January, Kalmar received an order for 12 E-One RTGs from
Brazil. The RTGs, fitted with the Smartrail® system, were delivered
to the port of Santos at the turn of 2007/2008.
MacGREGOR
Of all orders received in January-December, MacGREGOR accounted for
EUR 1,696 (1-12/2006: 684) million. Orders received in
October-December totalled a record high level of EUR 616 (10-12/2006:
149) million.
During the fourth quarter, MacGREGOR secured major offshore equipment
orders, including the order for 18 Hydramarine cranes to various ship
owners Europe and India received in December. All of the cranes will
be equipped with the Active Heave Compensation (AHC) system. The
offshore equipment will be delivered between 2008 and 2011.
The number of orders for ship cranes was also extremely high in the
fourth quarter. In December, MacGREGOR received orders for a total of
390 ship cranes that will be delivered for 101 vessels, mainly for
bulk carriers, to be built in Chinese and Korean ship yards. In
October and November, the company received orders for 179 ship
cranes, also from Chinese and Korean shipyards. The equipment will be
delivered during 2009-2011.
In November, MacGREGOR received significant hatch cover orders from
Korea. This equipment will be delivered during 2008-2010 for
container vessels ordered by different ship owners from China,
Greece, France and Germany.
In November, MacGREGOR signed a contract on the conversion of car
decks in six RoRo vessels. The vessels, which will be delivered for
Finnish shipowner Finnlines, will be built in Jinling shipyard in
China. After the vessels have been built, MacGREGOR will equip them
with electric car decks and access ramps.
In October MacGREGOR received an order to supply ten general cargo
vessels with complex twin hatch covers. The vessels will be built in
China.
Third quarter order intake was extremely lively for MacGREGOR ship
cranes. The Shanghai, Yangzijiang and Wenchong shipyards in China
ordered a total of 168 ship cranes that will be delivered during
2008-2012. Furthermore, the company will deliver 40 ship cranes and
hatch covers for ten general cargo ships ordered by the German
shipowner Herman Buss from a Chinese shipyard during 2009-2010.
In September, MacGREGOR secured a RoRo equipment order from the
Korean shipyard, Hyundai Mipo. This equipment, which includes
different kinds of ramps, hoistable cardecks and doors, will be
delivered during 2009-2011.
In August and September, MacGREGOR received significant offshore
equipment orders from China, Europe, the USA, Canada, Malaysia and
India. The equipment, which includes, for instance, mooring winches,
knuckle boom offshore cranes and deck machinery equipment, will be
delivered during 2008-2010.
In June, MacGREGOR received an order for hatch covers and 16 ship
cranes from the Chinese shipyard, COSCO Dalian. The equipment will be
delivered in 2008-2009. In May, MacGREGOR received an order for four
ship board twin cranes from the Polish-Chinese shipowner, Chipolbrok.
These units, the largest of their kind in the world, will be
delivered in 2008.
In June, MacGREGOR signed a contract on the delivery of RoRo
equipment for 15 vessels under construction in Korea. The equipment
will be delivered in 2008-2010. In March, the RoRo division also
secured contracts from several shipyards in Germany, Japan and
Croatia.
Demand for MacGREGOR's ship cranes was also lively during the first
half of the year. The company won significant orders from China,
Korea, Poland, Romania, Croatia, India and Taiwan. The equipment will
be delivered in 2007-2011.
In 2007, MacGREGOR received several orders for bulk handling systems
designed for the handling of cement and industrial minerals from, for
instance, Singapore, Malaysia, China and Qatar.
Cargotec Services
Cargotec strengthened its services operations during the reporting
period with a new Cargotec Services operating model. The aim is to
speed up services growth by focusing resources and service know-how
more effectively between Cargotec's business areas. The majority of
the services business within Hiab, Kalmar and MacGREGOR will
organisationally continue as earlier. Cargotec Services acts as an
internal centre of expertise where cooperation in service concept
development, spare parts sales and the training of service people
will be strengthened by a matrix organisation. A special focus on the
operating model will be introduced in the total maintenance of
container and bulk terminals as well as significant refurbishment and
conversion projects. Harald de Graaf, a member of Cargotec's
Executive Board, is President of Cargotec Services.
In the third quarter, the Norwegian company Fred Olsen Marine
Services contracted MacGREGOR to modernise the remote controlled
valve system of the world's largest tanker and to provide crew
training in its operation. In the second quarter, MacGREGOR signed a
three-year maintenance agreement with the Italian company, Grimaldi
Group. The agreement covers the maintenance of MacGREGOR RoRo
equipment on board 26 of Grimaldi's vessels. Also during 2007
MacGREGOR signed a contract in the Asian offshore service market for
the maintenance of a liquid cargo handling control system, with the
Malaysian operator Bumi Armada.
Kalmar signed a five-year maintenance contract during fourth quarter
with South African Transnet Port Terminals covering the maintenance
of 18 Kalmar RTGs and two reachstackers. In addition, the contract
covers the maintenance of other suppliers' equipment, including
terminal tractors, trailers and empty container handlers.
During autumn Kalmar started a five-year total equipment and
infrastructure maintenance contract in a consortium with Stork
Industrial Services at Euromax Terminal, Rotterdam, a
state-of-the-art highly automated container terminal under
construction for Europe Container Terminals (ECT), a member of the
HPH Group.
During the first quarter of 2007, Kalmar signed long-term agreements
covering the rental, servicing and customer financing of its
equipment in Sweden with Setra Group and Wallhamn AB. Kalmar rents,
maintains and finances 31 forklift trucks that were delivered to 12
of Setra's sawmills in the spring of 2007. The agreement with
Wallhamn AB consists of the lease of several units of Kalmar
container handling equipment as well as the maintenance of Kalmar and
other suppliers' equipment.
Order Book
Cargotec's order book totalled EUR 2,865 (December 31, 2006: 1,621)
million on December 31, 2007. Of the order book total, Hiab accounted
for EUR 260 (215) million, Kalmar EUR 660 (593) million, and
MacGREGOR EUR 1,946 (813) million. A considerable part of MacGREGOR's
record-high order book total is for delivery in 2008-2012.
Order book, MEUR 31.12.2007 31.12.2006
Hiab 260 215
Kalmar 660 593
MacGREGOR 1,946 813
Internal order book -1 0
Total 2,865 1,621
Sales
Cargotec's sales grew in January-December by 16 percent and totalled
EUR 3,018 (1-12/2006: 2,597) million. The sales impact of
acquisitions completed during 2007 was EUR 197 million.
Cargotec's sales for October-December 2007 amounted to EUR 868
(10-12/2006: 697) million. Hiab's sales in the fourth quarter
amounted to EUR 244 (10-12/2006: 239) million, Kalmar's sales were
EUR 364 (321) million and MacGREGOR's sales EUR 261 (138) million.
Sales, MEUR 1-12/2007 1-12/2006
Hiab 931 914
Kalmar 1,343 1,203
MacGREGOR 748 482
Internal sales -4 -2
Total 3,018 2,597
Sales for services increased by 32 percent year-on-year and amounted
to EUR 757
(1-12/2006: 572) million, or 25 (22) percent of total sales. Services
accounted for 17 (1-12/2006: 15) percent of sales at Hiab, 30 (26)
percent at Kalmar, and 25 (27) percent at MacGREGOR in
January-December 2007.
Financial Result
In the analysis of Cargotec's operating profit for 2007 it should be
noted that there are items affecting comparison. These items are the
EUR 18.0 million in Kalmar business area related to a container
spreader inspection and repair programme during the fourth quarter,
the EUR 3.3 million closure cost of a Hiab factory in the
Netherlands, and the EUR 9.9 (1-12/2006: 3.3) million cost impact
from the purchase price allocation treatment of acquisitions. When
analysing the operating profit before the beforementioned three items
the January-December operating profit was EUR 234,4 (1-12/2006:
225,9) million.
Cargotec's operating profit for January-December 2007 excluding the
one-off cost of EUR 18.0 million in Kalmar business area related to a
container spreader inspection and repair programme was EUR 221.1
(1-12/2006: 222.6) million, representing 7.3 (8.6) percent of sales.
The related operating profit for the fourth quarter was EUR 64.3
(10-12/2006: 57.8) million, equal to 7.4 (8.3) percent of sales. Hiab
accounted for EUR 19.1 (22.7) million of fourth quarter operating
profit, Kalmar for EUR 26.9 (28.3) million, and MacGREGOR for EUR
22.3 (9.7) million.
Operating profit for 2007 was EUR 203.1 (1-12/2006: 240.4) million.
The comparison period 2006 includes a capital gain of EUR 17.8
million from the divestment of property. Operating profit for the
fourth quarter 2007, including EUR 5.3 (10-12/2006: 1.5) million cost
impact from the purchase price allocation treatment of acquisitions,
totalled EUR 46.3 (10-12/2006: 57.7) million.
Net income for the period was EUR 138.4 (1-12/2006: 166.1) million
and earnings per share were EUR 2.17 (2.57).
Balance Sheet, Financing and Cash Flow
On December 31, 2007, Cargotec's net working capital amounted to EUR
253 (December 31, 2006: 220) million. Tangible assets on the balance
sheet were EUR 254 (218) million and intangible assets EUR 751 (581)
million.
Cash flow from operating activities before financial items and taxes
for January-December 2007 totalled EUR 235.1 (1-12/2006: 249.8)
million. In October-December cash flow strengthened to EUR 96.3
(10-12/2006: 71.0) million.
Net debt on December 31, 2007 was EUR 304 (December 31, 2006: 107)
million. Total equity/total assets ratio was 38.3 (47.6) percent
while gearing was 33.9 (12.3) percent. The purchase of own shares
during the second half, for close to EUR 47 million, raised gearing.
Return on equity for January-December 2007 was 15.6 (1-12/2006: 20.2)
percent and return on capital employed was 16.8 (23.1) percent.
Cargotec had EUR 585 million of committed credit facilities on
December 31, 2007. These facilities were unused. The EUR 225 million
(USD 300 million) Private Placement placed in December 2006 with U.S.
institutional investors was funded in February 2007. Some 14 U.S.
institutional investors participated in the transaction. The
placement has been hedged through Cross Currency and Interest Rate
Swaps into a fixed interest rate euro loan. Its interest rate varies
between 4.525 and 4.756 percent, depending on the maturity, which
varies between 7 and 12 years.
New Products and Product Development
In January-December 2007, Cargotec's research and product development
expenditure was EUR 46.4 (1-12/2006: 31.3) million, representing 1.5
(1.2) percent of sales. During the year special focus in R&D was
placed on environmental friendliness and utilisation of automation in
equipment.
During the year, Hiab launched two new loader cranes. The HIAB XS 211
loader crane complements the mid-sized loader crane range. The HIAB
XS 1055 launched in Q3 is the largest Hiab loader crane by capacity,
which provides users with the longest reach and highest lifting
capacity delivered by any HIAB crane on the marketplace today. The
most powerful of Hiab's hooklifts, the XR30, was launched in the
fourth quarter and was very well received by the market. Other
product launches included the XR 26 hooklift system, designed in
particular for the needs of the waste management and recycling
industry. Hiab continued development work on its truck-mounted
forklifts by introducing the MOFFETT M4 model, attracting orders from
short-range local transports and the gas industry in particular.
During the first quarter, Hiab launched a folding type tail lift
model for the UK and French markets that requires less loading space.
Kalmar continued to develop its automated solutions and
environmentally friendly equipment in 2007. Further development of
container position verification, and the control and monitoring
systems of automated stacking cranes continued. These systems are
being applied in, for instance, the automation project of the HHLA
Burchardkai container terminal in Hamburg. The first terminal
tractors featuring a remote control system (Remote Machine Interface,
RMI) developed by Kalmar were sold during the first quarter. This
system has been previously used in other Kalmar container handling
equipment. Product development work on hybrid solutions continued
through two-year terminal tractor R&D project which is a joint effort
by Kalmar, the ports of New York and New Jersey and the U.S.
Environmental Protection Agency. The new generation terminal tractors
with CAN-BUS monitoring system that speeds up their operation was
launched to the market during autumn. In the second quarter, Kalmar
introduced the remodelled E-One+ RTG crane which, similarly to its
predecessor, is fully electrically operated and does not have any
hydraulics. The new version brings improvements to the maintenance,
operating safety and assembly of the unit. At the end of 2007, Kalmar
launched a new automated product, Smartspot, designed to optimise
container handling between terminal tractors and ship-to-shore cranes
or RTG cranes. Also at the year end, Kalmar introduced a new spreader
model designed specifically for the U.S. and Canadian markets. In
November, the company rolled out a new F generation model for empty
container handling, enabling more rapid and efficient container
hoisting. The new model also features improved environmental
efficiency.
MacGREGOR continued to develop electronically operated cargo handling
solutions, including ship cranes, ramps, car decks and hatch covers.
In the third quarter, the company introduced a new lift-away,
multi-panel hatch cover model enabling the user to lift five hatch
covers at a time. The first electronically controlled ship crane
began operating during the second quarter. Furthermore, the company
presented fully automated container fittings that will be subjected
to field tests, and continued to develop a new generation monitoring
system for ship cranes. MacGREGOR delivered the first electric E-Roll
hatch covers for the first of altogether 12 vessels ordered by a
Japanese shipyard. These environmentally friendly, side-rolling hatch
covers are first raised from the ship deck using electrically powered
cylinders, after which they are opened by a geared electrical motor.
The Japanese Kawasaki shipyard ordered hatch covers of this type for
three of its vessels. In 2007, MacGREGOR also introduced a new bulk
cargo storage and handling system enabling vessels to take up to 50
percent more cargo. In addition, a new Hydramarine crane was launched
with a lifting capacity of 400 ton and active heave compensation.
Capital Expenditure
Cargotec's capital expenditure for January-December 2007, excluding
acquisitions and customer financing, totalled EUR 53.2 (1-12/2006:
46.6) million. Customer financing investments were EUR 37.5 (22.2)
million.
In the second quarter, Hiab decided to centralise its European
truck-mounted forklift production to the Dundalk production unit in
Ireland. The Oude Leije production unit in the Netherlands was
converted into a technical centre serving European customers. In the
first quarter, a new assembly unit was opened in Raisio, Finland,
enabling the simultaneous assembly of up to 12 truck superstructures.
The purpose of this investment is to cut delivery times and increase
the unit's efficiency.
In 2007, Hiab decided to combine its loader crane and forestry crane
product lines. The new Crane product line began operating on January
1, 2008. This organisational change will strengthen the use of shared
resources in crane product development, manufacturing and marketing.
The Crane product line comprises the manufacture of loader cranes,
forestry cranes and recycling cranes in five production units in
Europe and Asia. As of the beginning of 2008, Hiab also combined its
forestry crane sales operations in Finland into Hiab Oy's Finnish
sales. This change is part of the integration of Hiab's sales
companies, which began in Germany and Sweden in January 2007.
In the United States and Ireland, Hiab adapted the operations of its
load handling equipment production units to the weaker market demand
in the United States.
Hiab also invested in a new paintshop in its Korean assembly unit.
In May, Kalmar opened a new automation development centre in Tampere,
Finland. The centre tests smart solutions developed by Kalmar before
the equipment is delivered to the customer. Furthermore, the centre
provides training for machine operators on Kalmar's remote monitoring
systems. In 2007, the company also extended its reachstacker assembly
facilities in Lidhult, Sweden and the production facilities for rough
terrain container handlers in Texas, the United States.
In 2007, MacGREGOR invested in a new offshore equipment production
unit in Tianjin, China. In the fourth quarter, the company initiated
the extension of a production unit in Singapore that delivers
offshore cranes to the Asian markets. With respect to ship cranes,
MacGREGOR continued to seek new cooperation partners to meet the
ongoing major increase in order book more efficiently. Furthermore,
the number of partners in hatch covers, RoRo and ship cranes
production was increased.
Acquisitions
Cargotec completed 14 acquisitions in 2007. In February, a contract
was signed to acquire 95 percent of the Indian company, Indital
Construction Machinery Ltd. The acquisition was finalised in April
and gives Cargotec a manufacturing presence in India while supporting
the sales activities of Cargotec's business areas in the region.
Cargotec ownership was raised to 100 percent in December.
As part of strengthening Cargotec's presence in India, the remaining
shares (49 percent) in Kalmar India Pvt. Ltd were bought in September
2007.
In December, Cargotec signed a contract on the acquisition of a 30
percent minority holding in Mareiport and Prosa, the leading port
service providers in Spain's most important ports.
In December 2006, Cargotec agreed to acquire the Italian company, CVS
Ferrari. In August 2007, the German competition authority announced
that it will not allow the acquisition on the basis of it being
anticompetitive. Cargotec has appealed against this decision.
Hiab's Acquisitions
In July, Hiab signed an agreement to acquire a service company in
Florida, U.S.A. Bay Equipment Repairs Inc. is a long-term service
partner of Hiab, and most of its customers are Hiab customers. Bay
Equipment Repairs had sales of approximately EUR 1 million in 2006
and the company employs 13 persons.
In May, Hiab signed a contract to acquire the Estonian company, Balti
ES, which manufactures steel structures and components. Balti ES
employs approximately 600 people and posted sales of approximately
EUR 14 million in 2006. Finalised in June, the acquisition supports
both Hiab's and Kalmar's increasing demand for components.
In January, Hiab signed an agreement of intent to acquire the sales,
service and installation units of its distributor, Berger, in the
Czech Republic, Slovakia, Hungary and Croatia. The acquisition was
finalised in May. The annual sales of the acquired operations are
approximately EUR 16 million, and the units employ approximately 75
people.
In January, a contract was signed to acquire a majority holding in BG
Crane Pty. Ltd., the Australian importer of Hiab equipment,
previously an associated company. The deal was finalised in February.
The company employs approximately 100 people and had sales of
approximately EUR 20 million in 2006.
Kalmar's Acquisitions
In August, Kalmar made an agreement to acquire Advanced Cargo
Transshipment B.V. (ACT), an automation and software producer based
in the Netherlands. The acquisition will increase Kalmar's resources
in automated port terminal R&D. ACT specialises in developing and
marketing equipment navigation control and terminal operation control
hardware and software.
In April, Kalmar signed a contract to acquire the remaining minority
share in Kalmar Asia Pacific Ltd. Kalmar now fully owns the company.
In February, Kalmar acquired the U.S. based service company, Port
Equipment Service, Inc. (PES). PES employs 56 people and had sales of
approximately EUR 4 million in 2006. This acquisition strengthened
Kalmar's service business, particularly in ports and railroad
terminals on the U.S. East Coast.
In January, Kalmar acquired the Slovenian service company, Tagros
d.o.o. Tagros services container handling equipment and forklifts.
This acquisition enables Kalmar to build up its service and sales
activities in Slovenia and the Northern Balkan Peninsula. Tagros
employs approximately 35 people and had sales of approximately EUR 2
million in 2006.
In January, Kalmar also agreed to acquire Truck och Maskin i
Örnsköldsvik AB in Northern Sweden. The acquisition was finalised in
February and has strengthened Kalmar's sales and service network for
industrial customers in the wood handling segment. Truck och Maskin
employs approximately 100 people and had sales of approximately EUR
14 million in the accounting period that ended on April 30, 2006.
In December 2006, a contract was signed to acquire Kalmar's Spanishdistributor, Kalmar Espana SA. The acquisition was finalised in
April.
MacGREGOR's Acquisitions
During the first half of the year, MacGREGOR expanded its operations
into the offshore vessel segment. In March, MacGREGOR agreed to
acquire Norwegian Hydramarine AS and Singaporean Plimsoll Corporation
Pte Ltd. The acquisitions were finalised in April. Hydramarine
specialises in the development of sub sea load handling equipment
such as cranes. In 2006, Hydramarine had sales of EUR 63 million and
employed 150 people. Plimsoll Corporation Pte Ltd is the leading
company in producing hydraulic deck machinery equipment for offshore
oil and gas and marine industry in the Asia Pacific region. In 2006,
Plimsoll's sales totalled approximately EUR 43 million and the
company employed approximately 600 people. MacGREGOR acquired 90
percent of both Hydramarine and Plimsoll with the remaining shares
being owned by the employees.
In June, MacGREGOR established a new division, MacGREGOR Offshore.
The division consists of Hydramarine and Plimsoll and concentrates on
achieving synergy benefits between the acquired companies and
expanding the business. The new division employs close to 900 people.
In May, a contract was signed to acquire Vestnorsk Hydraulikkservice
AS (VNH) of Norway. VNH specialises in the maintenance of hydraulic
systems and turnkey deliveries of offshore solutions for offshore
support vessels and other types of ships. VNH's sales amount to
approximately EUR 5 million. The company employs 21 people. The
acquisition was finalised in June.
Employees
In 2007, the average number of employees at Cargotec was 10,276
(2006: 8,026) people. At the end of the reporting period, Cargotec
employed 11,187
(December 31, 2006: 8,516) people. Hiab employed 4,418 (3,647)
people, Kalmar 4,459 (3,705) and MacGREGOR 2,223 (1,117). Of
Cargotec's total employees, 14 percent were located in Finland, 22
percent in Sweden and 30 percent in the rest of Europe. North and
South American personnel represented 11 percent, Asia Pacific 22
percent and the rest of the world 1 percent of total employees. 15
percent of the personnel were female and 85 percent male. 3 percent
of Cargotec's total employees worked part time and 97 percent full
time.
During the financial period, salaries and remunerations to employees
totalled
EUR 356 (1-12/2006: 300) million.
Acquisitions concluded by Cargotec in 2007 significantly increased
the number of personnel in Europe and Asia, in addition to which new
personnel were recruited for various operations in Asia Pacific and
Europe. In the United States, the operations of the load handling
equipment production units were restructured and, consequently, the
number of personnel decreased in line with weaker market demand.
In 2007, Cargotec's HR management adopted a new, shared reporting
practice providing more extensive information on employees to support
its decision-making on a global level. Furthermore, Cargotec's people
strategy action plan focused on the planning and implementation of a
human resources development and training structure as well as the
development of uniform processes and tools supporting the activities
of the firm's HR management. Other focus areas included recruiting
and competence management.
Environment
Cargotec's environmental policy defines the Company's environmental
principles. The main environmental effects of Cargotec's operations
are related to the use of its products. Compared to these, the
environmental effects of Cargotec's own factories are insignificant,
relating mainly to energy and material use, recycling and waste. For
this reason, environmental life cycle assessments are increasingly
focused on product development and service operations.
The recyclability of most of Cargotec's products is high, due to
their substantial steel content. Other product benefits include a
long useful life and good serviceability. Careful and regular
servicing of equipment reduces its environmental effects and extends
its useful life. Improving the energy efficiency of products forms an
important part of product development.
The certified ISO 9001 and ISO 14001 quality and environmental
management systems form the basis of Cargotec's environmental
management. The Company's regular external audits and management
audits are aimed at monitoring the achievement of the related
objectives.
Cargotec seeks to create certified environmental management systems
for all of its production sites. Eight of Hiab's 16 production units
and two of its sales companies apply environmental management systems
certified under ISO 14001. These systems cover over two thirds of the
sales of Hiab's production units. Five of Kalmar's seven production
units apply certified environmental management systems, these systems
covering over half of the sales of Kalmar's production units.
Furthermore, two of Hiab's production units and two of Kalmar's
production units are planning to certify their environmental
management systems during 2008. MacGREGOR commissions most of its
products from selected partners independently responsible for their
production processes. Operational guidelines related to the
management of environmental issues are included in the quality
systems of most of MacGREGOR units.
The handling of environmental risks and responsibilities forms part
of continuous company processes. In the context of corporate
acquisitions and divestments, Cargotec analyses environmental issues
as part of the due diligence process and manages any identified
responsibilities according to standardised practices. An
environmental assessment was performed in connection with all
acquisitions completed in 2007. Furthermore, a programme has been
drawn up for carrying out an environmental assessment at all of
Cargotec's current production sites.
Risks and Risk Management
Cargotec's President and CEO and the Executive Board are responsible
for the Company's risk management activities and their implementation
and control, and report to the Board of Directors. The Company has an
internal auditing function which is responsible for internal control
and business risk auditing. The internal auditing reports to the
Board's Audit Committee. It is the task of the corporate Treasury
function to manage financial risks centrally, while business areas
and units are responsible for managing the risks involved in their
own operations. Matters related to risk management are systematically
evaluated during the various business units' quality and
environmental system audits and management reviews, and as part of
corporate restructuring.
Risk is defined as any internal or external threat or uncertainty
that may prevent or restrict it from carrying out its operations and
achieving its goals. Risks are classified into strategic and business
risks, financial risks, and operational risks and hazard risks.
Cargotec has launched a project aimed at developing its internal
controls. The purpose of this project is to create a system enabling
the management to evaluate whether the Company's activities are
efficient and in line with targets, whether its reporting is reliable
and whether it operates in accordance with the legislation, rules and
regulations in force. The system will be established in line with the
generally accepted COSO framework (Committee of Sponsoring
Organizations of the Treadway Commission). After the current status
of internal controls has been analysed, the various functions will
draw up plans regarding the development of the measures required. The
Audit Committee will monitor the progress of the development
projects.
Strategic and business risks are related to business cycles in the
global economy and Cargotec's customer industries, the availability
and price development of raw materials and components, acquisitions,
and dealers' and subcontractors' activities.
Cargotec's treasury operations and financial risk management
principles are defined in the Treasury Policy. The Company's
financial risks are centrally managed and administered by Cargotec
Treasury, which draws up financial risk reports for the management on
a regular basis. Financial risks arising from Cargotec's business
activities include currency, interest rate, refinancing and
liquidity, counterparty and operative credit risks. The Company seeks
to protect itself against these risks in order to ensure a
financially sound basis for developing its business operations.
Operational risks and hazard risks relate to persons, property,
processes, products and information technology. The materialisation
of such risks may lead to bodily injuries, property damage, business
interruption or product liability claims. Cargotec's main activities
related to the management of these risks are related first and
foremost to increasing product safety and information security and
assuring business continuity. With respect to key person risks,
succession plans for leadership and key assignments are updated on an
annual basis.
Responsibility for the management of key operational risks and hazard
risks lies with the Company's risk management function and business
area and unit management, in particular. Cargotec's main hazard risks
include risks related to property, business interruption, general and
product liability and logistics. In addition to preventive risk
management measures, the Company protects itself against these risks
by taking out insurance policies that cover all units.
Shares and Share Capital
Cargotec's class B shares are quoted on the OMX Nordic Exchange
Helsinki. Cargotec's share capital on December 31, 2007 was EUR
64,220,373
(December 31, 2006: 64,046,460). The share capital increased by EUR
173,913 during the report period as a result of the subscription for
class B shares under Cargotec option rights.
On December 31, 2007, Cargotec's share capital comprised 54,694,284
(December 31, 2006: 54,520,371) class B shares listed on the OMX
Nordic Exchange Helsinki and 9,526,089 (9,526,089) unlisted class A
shares. Class B shares accounted for 85.2 (85.1) percent of the total
number of shares and 36.5 (36.4) percent of votes. Class A shares
accounted for 14.8 (14.9) percent of the total number of shares and
63.5 (63.6) percent of votes. The total number of votes attached to
all shares was 14,994,620 (14,977,375) at the year end.
Market Capitalisation and Trading
The closing price for Cargotec's class B shares on December 31, 2007
was
EUR 31.65. The average share price for the financial period was EUR
40.55, the highest quotation being EUR 49.83 and the lowest EUR
29.78. The market value of Cargotec's class B share decreased by 27
percent during the financial period.
On December 31, 2007, the total market value of the Company's class B
shares was EUR 1,671 million, excluding treasury shares held by the
Company. The Company's year-end market capitalisation, in which the
unlisted class A shares are valued at the average closing price of
class B shares on the last trading day of the financial period, was
EUR 1,971 million, excluding treasury shares held by the Company. At
the year end, the Company held a total of 1,904,725 class B shares,
which corresponds to 3.0 percent of the total number of shares.
During the financial period, approximately 70.9 million Cargotec
class B shares were traded on the OMX Nordic Exchange in Helsinki,
corresponding to a turnover of approximately EUR 2,880 million. The
average daily trading volume was 283,780 shares or EUR 11,518,825
while the relative turnover for the period was 130.0 percent.
Shares Subscribed for under the Option Rights
At the beginning of the financial period, the number of series A and
series B option rights were 37,895 and 82,955, respectively. 173,913
class B shares were subscribed for during the period, increasing the
share capital by EUR 173,913.
The remaining Cargotec 2005A and 2005B option rights entitle the
holder to the subscription of a total of 188,637 class B shares in
Cargotec and an increase of EUR 188,637 in the share capital. The
said number of shares that can be subscribed for under the remaining
option rights constitutes 0.3 percent of Cargotec's total number of
shares and 0.13 percent of the total number of votes. With respect to
the series A option rights, the subscription period ends on March 31,
2008. The Company has not issued other option rights or convertible
bonds.
Cargotec's Financial Targets and Incentive Programme for Key Managers
In January 2007, Cargotec published its new financial targets and a
share-based incentive programme for the key managers for the years
2007-2011. The purpose of the programme encouraging share ownership
is to align the interests of key managers to Cargotec's strategy and
financial targets as well as contribute to making them long-term
shareholders of the Company. The incentive programme covers some 60
individuals. The programme offers key managers a possibility to earn
a reward in Cargotec class B shares based on accomplishment of set
targets.
Cargotec's financial targets are the following: annual sales growth
exceeding 10 percent (incl. acquisitions), raising the operating
profit margin to 10 percent, and maintaining the gearing below 50
percent. The targets have been set for the years 2007-2011.
The incentive programme consists of four earnings periods, of which
the first is two years and the following three periods one year each.
The Board of Directors decides on the target group of the earnings
period and their maximum reward at the beginning of each earnings
period.
Potential rewards from the incentive programme during 2007-2011 are
based on achievement of five-year sales and operating profit targets
as defined in Cargotec's strategy. The rewards will be paid during
2009-2012 in both class B shares and cash. The cash portion is
dedicated to cover possible taxes and tax-related payments resulting
from the reward. The shares distributed as reward will contain a
prohibition to hand over or sell the shares within one year of the
end of an earnings period with the exception of the final earnings
period when no prohibitions are included. The maximum amount to be
paid out as shares is 387,500 class B shares currently held by the
Company as treasury shares.
Changes in Cargotec's Executive Board
Pekka Vauramo, M.Sc. (Eng.) was appointed Kalmar's President as of
October 1, 2007. Vauramo started at Cargotec on September 1, 2007.
Kalmar's previous President, Christer Granskog, retired at the end of
2007 in accordance with his service contract.
Decisions Taken at Cargotec Corporation's Annual General Meeting
Cargotec Corporation's Annual General Meeting was held on February
26, 2007 in Helsinki. The meeting approved the financial statements
and consolidated financial statements. The meeting granted discharge
from liability to the President and CEO and the members of the Board
of Directors for the accounting period
January 1-December 31, 2006.
The Annual General Meeting approved the Board's proposal of a
dividend of EUR 0.99 for each of the 9,526,089 class A shares and EUR
1.00 for the 53,815,646 outstanding class B shares. The meeting also
approved the remuneration of the Board members as well as that of the
auditors.
The number of members of the Board of Directors was confirmed at six
according to the proposal of Cargotec's Nomination and Compensation
Committee. Carl-Gustaf Bergström, Henrik Ehrnrooth, Tapio Hakakari,
Ilkka Herlin, Peter Immonen and Karri Kaitue were re-elected as
members of the Board of Directors.
Authorised public accountants Johan Kronberg and
PricewaterhouseCoopers Oy were elected as auditors according to the
proposal of the Audit Committee of Cargotec Corporation's Board of
Directors.
Authorisations Granted by the Annual General Meeting
The Annual General Meeting authorised the Board of Directors of
Cargotec to decide to repurchase the Company's own shares with assets
distributable as profit. The shares may be repurchased in order to
develop the capital structure of the Company, finance or carry out
possible acquisitions, implement the Company's share-based incentive
plans, or to be transferred for other purposes or to be cancelled.
Altogether no more than 6,400,000 own shares may be repurchased, of
which no more than 952,000 are class A shares and 5,448,000 are class
B shares. The above-mentioned amounts include the 704,725 class B
shares at that time in the Company's possession. This authorisation
remains in effect for a period of 18 months from the date of decision
of the Annual General Meeting.
In addition, the Annual General Meeting authorised the Board of
Directors to decide on the distribution of any shares repurchased.
The Board of Directors is authorised to decide to whom and in which
order the shares will be distributed. The Board of Directors may
decide on the distribution of repurchased shares otherwise than in
proportion to the existing pre-emptive right of shareholders to
purchase the Company's own shares. The shares may be used as
compensation in acquisitions and in other arrangements as well as to
implement the Company's share-based incentive plans in the manner and
to the extent decided by the Board of Directors. The Board of
Directors has also the right to decide on the distribution of the
shares in public trading at the Helsinki Stock Exchange to be used as
compensation in possible acquisitions. This authorisation remains in
effect for a period of 18 months from the date of decision of the
Annual General Meeting.
Organisation of the Board of Directors
In its organising meeting Cargotec's Board of Directors elected Ilkka
Herlin to continue as Chairman of the Board and Henrik Ehrnrooth to
continue as Deputy Chairman. Cargotec's Senior Executive Vice
President and CFO Kari Heinistö continues to act as secretary to the
Board of Directors.
The Board of Directors re-elected among its members Ilkka Herlin,
Peter Immonen and Karri Kaitue as members of the Audit Committee.
Karri Kaitue was elected to continue as Chairman of the Audit
Committee. Board members Carl-Gustaf Bergström, Tapio Hakakari, Ilkka
Herlin and Peter Immonen were re-elected to the Nomination and
Compensation Committee. Ilkka Herlin was elected to continue as
chairman of the Nomination and Compensation Committee. Board members
Tapio Hakakari, Ilkka Herlin and Peter Immonen were elected to the
Working Committee. The Board elected Ilkka Herlin as chairman of the
Working Committee.
Share Repurchases
Cargotec's Board of Directors decided to exercise the authorisation
of the Annual General Meeting to repurchase the Company's own shares.
The maximum amount of repurchased own shares will be less than 10
percent of the Company's share capital and total voting rights.
Class B shares will be purchased at public trading in the Helsinki
Stock Exchange at the market price. Class A shares will be purchased
outside the Stock Exchange at the price equivalent to the average
price of class B shares paid in the Helsinki Stock Exchange on the
purchase date. Share repurchases will be published on the transaction
days through stock exchange announcements.
In the second half of the year, a total of 1,200,000 own class B
shares were repurchased. Altogether, Cargotec holds 1,904,725 class B
shares in treasury.
Short-term Risks and Uncertainties
Cargotec's principal short-term risks and uncertainties are related
to general economic development and the availability of components.
A major decline in construction activities in the United States has
been reflected in the demand for Cargotec's load handling equipment.
The generally higher uncertainty related to the global economic
development makes estimating short-term future more difficult. A more
general slackening of economic growth in the U.S. and its reflection
in other parts of the world might decrease Cargotec's customers'
willingness to invest.
Cargotec has outsourced a significant proportion of its component
production and part of its assembly operations. Cargotec strives to
anticipate its component needs so that subcontractors can flexibly
meet demand. Due to generally high demand for many of the components
used by Cargotec, their availability remains tight. Additionally,
high demand for trucks in Europe may have an adverse impact on the
delivery schedules of Hiab products during the first half of the
year.
Cargotec has made a significant number of acquisitions during the
past 12 months. Although these acquisitions are relatively small in
size and geographically dispersed, integrations always involve a
degree of uncertainty.
Board of Directors' Proposal on the Distribution of Profit
The parent company's distributable equity on December 31, 2007 is EUR
890,371,965.27 of which net income for the period is EUR
95,444,925.87. The Board of Directors will propose to the Annual
General meeting convening on February 29, 2008, that of the
distributable profit, a dividend of EUR 1.04 per each of the
9,526,089 class A shares and EUR 1.05 per each of 54,694,284 class B
shares in circulation be paid, totalling EUR 65,336,169.51. The rest
of the distributable equity, EUR 825,035,795.76, will be retained and
carried forward.
No significant changes have occurred in the Company's financial
position after the end of the financial year. The Company's liquidity
is good and, in the Board of Directors' view, the proposed
distribution of dividend does not pose a risk to the Company's
financial standing.
Outlook
Investments in the strategic development of Cargotec will continue
and growth in services is expected to remain strong. Based on the
record high order book at the beginning of the year management
estimates sales growth in 2008 to be at the year 2007 level. General
market activity and Cargotec's orders received are expected to
continue healthy although in MacGREGOR the achievement of the
exceptionally high order intake level of 2007 is a stretch. Operating
margin in 2008 is expected to improve from the 2007 level. The U.S.
market continues weak without yet any signs of improvement.
Annual General Meeting
Cargotec Corporation's Annual General Meeting will be held at the
Marina Congress Center in Helsinki on Friday, February 29, 2008 at 10
a.m.
Helsinki, January 31, 2008
Cargotec Corporation
Board of Directors
CARGOTEC FINANCIAL STATEMENTS REVIEW JANUARY-DECEMBER 2007
CONSOLIDATED INCOME STATEMENT
MEUR 10-12/2007 10-12/2006 1-12/2007 1-12/2006
Sales 867.5 697.2 3,018.2 2,597.1
Cost of goods
sold -689.3 -549.7 -2,376.8 -2,042.7
Non-recurring
items * -18.0 - -18.0 -
Gross profit 160.3 147.5 623.4 554.4
Gross profit, % 18.5 % 21.2 % 20.7 % 21.3 %
Gain on the sale
of property - -0.1 - 17.8
Other operating
income 6.7 7.8 26.8 22.7
Selling and
marketing
expenses -54.3 -45.5 -197.4 -168.1
Research and
development
expenses -10.4 -9.2 -38.9 -31.3
Administration
expenses -44.7 -37.6 -176.1 -136.6
Other operating
expenses -11.4 -5.3 -34.9 -19.4
Share of
associated
companies' and
joint ventures'
net income 0.1 0.1 0.3 0.9
Operating profit 46.3 57.7 203.1 240.4
Operating profit,
% 5.3 % 8.3 % 6.7 % 9.3 %
Financing income -3.6 -0.9 16.7 3.6
Financing
expenses -2.9 -1.0 -35.5 -12.0
Income before
taxes 39.7 55.8 184.4 232.0
Income before
taxes, % 4.6 % 8.0 % 6.1 % 8.9 %
Taxes -10.8 -16.5 -46.0 -65.9
Net income for
the period 28.9 39.3 138.4 166.1
Net income for
the period, % 3.3 % 5.6 % 4.6 % 6.4 %
Net income for
the period
attributable to:
Equity holders of
the Company 27.8 38.5 136.5 163.9
Minority interest 1.1 0.8 1.8 2.2
Total 28.9 39.3 138.4 166.1
Earnings per
share for profit
attributable to
the
equity holders of
the Company:
Basic earnings
per share, EUR 0.45 0.61 2.17 2.57
Diluted earnings
per share, EUR 0.44 0.60 2.16 2.56
Adjusted basic
earnings per
share,
EUR - 0.63 ** - 2.39 **
* Kalmar business area related container spreader inspection and
repair programme
** Excluding gain on the sale of property after taxes
CONSOLIDATED BALANCE SHEET
MEUR 31.12.2007 31.12.2006
ASSETS
Non-current assets
Goodwill 670.2 513.3
Other intangible assets 81.0 67.2
Property, plant and equipment 253.7 217.6
Investments in associated companies and joint
ventures 4.8 2.4
Available-for-sale investments 2.3 1.6
Loans receivable and other interest-bearing
assets 1) 5.5 0.1
Deferred tax assets 55.5 50.7
Derivative assets 8.9 5.1
Other non-interest-bearing assets 12.0 2.8
Total non-current assets 1,094.0 860.8
Current assets
Inventories 657.4 528.9
Loans receivable and other interest-bearing
assets 1) 0.4 0.3
Income tax receivables 18.3 7.0
Derivative assets 50.8 22.5
Accounts receivable and other
non-interest-bearing assets 582.8 444.2
Cash and cash equivalents 1) 179.0 124.3
Total current assets 1,488.7 1,127.2
Total assets 2,582.6 1,988.0
1) Included in interest-bearing net debt
MEUR 31.12.2007 31.12.2006
EQUITY AND LIABILITIES
Equity attributable to the equity holders of
the Company
Share capital 64.2 64.0
Share premium account 97.4 96.0
Treasury shares -70.0 -23.9
Translation differences -29.6 -12.0
Fair value reserves 19.9 10.5
Retained earnings 808.7 734.2
Total equity attributable to the equity
holders of the Company 890.6 868.8
Minority interest 6.1 8.0
Total equity 896.7 876.8
Non-current liabilities
Loans 1) 433.3 195.0
Deferred tax liabilities 38.5 30.5
Pension obligations 35.2 36.2
Provisions 38.4 30.3
Derivative liabilities 14.9 3.1
Other non-interest-bearing liabilities 53.2 15.9
Total non-current liabilities 613.6 311.0
Current liabilities
Current portion of long-term loans 1) 3.5 4.8
Other interest-bearing liabilities 1) 51.6 32.4
Provisions 70.8 42.6
Income tax payables 46.9 39.5
Derivative liabilities 17.6 15.7
Accounts payable and other
non-interest-bearing liabilities 882.0 665.2
Total current liabilities 1,072.4 800.2
Total equity and liabilities 2,582.6 1,988.0
1) Included in interest-bearing net debt
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Attributable to the equity holders of the Company
Sha- Share Trans- Fair Mino-
re pre- Trea- lation value Retai- rity
capi- mium sury diffe reser- ned inte- Total
MEUR tal account shares rences ves earnings Total rest equity
Equity on
31.12.
2005 63.9 95.1 -5.0 4.9 -10.3 611.4 760.0 7.2 767.2
Gain/
loss
on cash
flow
hedges
booked
to
equity* 32.1 32.1 0.0 32.1
Gain/
loss
on cash
flow
hedges
trans-
ferred
to IS -11.3 -11.3 -11.3
Translation
differences -16.9 -16.9 -0.8 -17.7
Net
income
recog-nized
directly
in
equity - - - -16.9 20.8 - 3.9 -0.8 3.1
Net
income
for the
period 163.9 163.9 2.2 166.1
Total
recog-nized
income
and
expenses
for the
period - - - -16.9 20.8 163.9 167.8 1.4 169.2
Divi-
dends
paid -41.3 -41.3 -41.3
Shares
subs-
cribed
with
options 0.1 0.9 1.1 1.1
Acqui-sition
of
trea-
sury
shares -18.9 -18.9 -18.9
Share-
based
incen-tives,
value of
recei-
ved
services 0.1 0.1 0.1
Other
changes - -0.6 -0.6
Equity
on
31.12.2006 64.0 96.0 -23.9 -12.0 10.5 734.2 868.8 8.0 876.8
Gain/
loss
on cash
flow
hedges
booked to
equity * 18.5 18.5 0.0 18.5
Gain/
loss
on cash
flow
hedges
trans-
ferred
to IS -9.1 -9.1 0.0 -9.1
Trans-lation
diffe-rences -17.6 -17.6 -0.7 -18.3
Net
income
recognised
directly
in
equity - - - -17.6 9.4 - -8.2 -0.7 -8.9
Net
income
for the
period 136.5 136.5 1.8 138.4
Total
recognised
income
and
expenses
for the
period - - - -17.6 9.4 136.5 128.4 1.1 129.5
Dividends
paid -63.2 -63.2 -0.5 -63.7
Shares
subs-
cribed
with
options 0.2 1.3 1.5 1.5
Acquisition
of treasury
shares -46.1 -46.1 -46.1
Sharebased
incentives,
value of
received
services * 1.2 1.2 1.2
Other
changes - -2.5 -2.5
Equity
on
31.12.2007 64.2 97.4 -70.0 -29.6 19.9 808.7 890.6 6.1 896.7
* Net of
tax
CONSOLIDATED CASH FLOW STATEMENT
MEUR 1-12/2007 1-12/2006
Net income for the period 138.4 166.1
Depreciation 59.8 40.5
Gain on sale of property - -17.8
Financing items and taxes 64.7 74.3
Change in receivables -118.4 18.0
Change in payables 198.5 18.2
Change in inventories -107.6 -48.9
Other adjustments -0.4 -0.6
Cash flow from operations 235.1 249.8
Interest received 5.6 5.4
Interest paid -12.0 -11.5
Dividends received 0.0 0.0
Other financial items -12.5 -1.7
Income taxes paid -43.6 -43.3
Cash flow from operating activities 172.6 198.7
Capital expenditure -90.8 -69.3
Proceeds from sales of fixed assets 12.5 41.7
Acquisitions, net of cash -172.5 -89.1
Proceeds from divested operations, net of
cash - 0.0
Cash flow from investment activities,
other items -13.5 0.9
Cash flow from investing activities -264.3 -115.8
Proceeds from share subscriptions 1.5 1.1
Acquisition of treasury shares -46.1 -18.9
Proceeds from long-term borrowings 274.5 0.1
Repayments of long-term borrowings -29.5 -25.9
Proceeds from short-term borrowings 40.8 15.9
Repayments of short-term borrowings -31.5 -7.6
Dividends paid -63.8 -41.3
Cash flow from financing activities 145.9 -76.6
Change in cash 54.2 6.3
Cash, cash equivalents and bank overdrafts at
the beginning of period 114.5 111.2
Effect of exchange rate changes -1.1 -3.0
Cash, cash equivalents and bank overdrafts at
the end of period 167.5 114.5
Bank overdrafts at the end of period 11.4 9.8
Cash and cash equivalents at the end of
period 179.0 124.3
KEY FIGURES
1-12/2007 1-12/2006
Equity/share EUR 14.29 13.72
Interest-bearing net debt MEUR 303.6 107.5
Total equity/total assets % 38.3 47.6
Gearing % 33.9 12.3
Return on equity % 15.6 20.2
Return on capital employed % 16.8 23.1
SEGMENT REPORTING
Sales by geographical segment, MEUR 1-12/2007 1-12/2006
EMEA 1,677 1,368
Americas 647 720
Asia Pacific 695 509
Total 3,018 2,597
Sales by geographical segment, % 1-12/2007 1-12/2006
EMEA 55.6 % 52.7 %
Americas 21.4 % 27.7 %
Asia Pacific 23.0 % 19.6 %
Total 100.0 % 100.0 %
Sales, MEUR 1-12/2007 1-12/2006
Hiab 931 914
Kalmar 1,343 1,203
MacGREGOR 748 482
Internal sales -4 -2
Total 3,018 2,597
Operating profit, MEUR 1-12/2007 1-12/2006
Hiab 73.8 86.6
Kalmar 105.5 * 111.8
MacGREGOR 59.4 36.1
Corporate administration and other -17.5 -11.9
Operating profit from operations 221.1 222.6
Gain on the sale of property -18.0 -
Non-recurring items - 17.8
Total 203.1 240.4
* Excluding the one-off cost of EUR 18.0 million related to a
container spreader inspection and repair programme
Operating profit, % 1-12/2007 1-12/2006
Hiab 7.9 % 9.5 %
Kalmar 7.9 % * 9.3 %
MacGREGOR 7.9 % 7.5 %
Cargotec, operating profit from
operations 7.3 % * 8.6 % **
Cargotec 6.7 % 9.3 %
* Excluding the one-off cost of EUR 18.0 million related to a
container spreader inspection and repair programme
** Excluding gain on the sale of property
Orders received, MEUR 1-12/2007 1-12/2006
Hiab 985 946
Kalmar 1,429 1,282
MacGREGOR 1,696 684
Internal orders received -4 -2
Total 4,106 2,910
Order book, MEUR 31.12.2007 31.12.2006
Hiab 260 215
Kalmar 660 593
MacGREGOR 1,946 813
Internal order book -1 0
Total 2,865 1,621
Capital expenditure, MEUR 1-12/2007 1-12/2006
In fixed assets (excluding acquisitions) 52.5 46.1
In leasing agreements 0.7 0.5
In customer financing 37.5 22.2
Total 90.7 68.8
Number of employees at the end of period 31.12.2007 31.12.2006
Hiab 4,418 3,647
Kalmar 4,459 3,705
MacGREGOR 2,223 1,117
Corporate administration 87 47
Total 11,187 8,516
Average number of employees 1-12/2007 1-12/2006
Hiab 4,091 3,571
Kalmar 4,233 3,415
MacGREGOR 1,880 994
Corporate administration 72 46
Total 10,276 8,026
NOTES
Taxes in income statement
MEUR 1-12/2007 1-12/2006
Current year tax expense 56.2 66.7
Deferred tax expense -3.9 -0.3
Tax expense for previous years -6.3 -0.5
Total 46.0 65.9
Commitments
MEUR 31.12.2007 31.12.2006
Guarantees 2.2 0.5
Dealer financing 8.4 8.5
End customer financing 7.5 6.7
Operating leases 47.7 38.1
Off balance sheet investment commitments 1.2 -
Other contingent liabilities 3.7 3.9
Total 70.6 57.7
Cargotec leases property, plant and equipment under non-cancellable
operating leases. The leases have varying terms and renewal rights.
It is not anticipated that any material liabilities will arise from
customer finance commitments.
The future minimum lease payments under non-cancellable operating
leases
MEUR 31.12.2007 31.12.2006
Less than 1 year 14.1 11.9
1-5 years 27.4 22.2
Over 5 years 6.3 4.0
Total 47.7 38.1
The aggregate operating lease expenses totaled EUR 13.6
(1.1.-31.12.2006: 11.1) million.
Fair values of
derivative financial
instruments
Positive fair Negative Net fair Net fair
value fair value value value
MEUR 31.12.2007 31.12.2007 31.12.2007 31.12.2006
FX forward contracts,
cash flow hedges 36.3 25.0 11.3 18.6
FX forward contracts,
non-hedge accounted 23.3 2.6 20.7 -9.1
Interest rate swaps,
non-hedge accounted - - - 0.0
Cross currency and
interest rate swaps,
cash flow
hedges - 4.9 -4.9 -0.7
Total 59.7 32.6 27.1 8.8
Non-current portion:
FX forward contracts,
cash flow hedges 8.9 10.0 -1.1 2.7
Cross currency and
interest rate swaps,
cash flow
hedges - 4.9 -4.9 -0.7
Non-current portion 8.9 14.9 -6.0 2.0
Current portion 50.8 17.6 33.2 6.8
Cross currency and interest rate swaps are hedging the US Private
Placement corporate bond, which was funded in February 2007.
Nominal values of derivative financial
instruments
MEUR 31.12.2007 31.12.2006
FX forward contracts 2,610.0 1,752.7
Interest rate swaps - 10.0
Cross currency and interest rate swaps 225.7 225.7
Total 2,835.7 1,988.4
Acquisitions 2007
In 2007 Cargotec made several acquisitions in line with its strategy.
These acquisitions were individually immaterial.
In February, a contract was signed to acquire 95 percent of the
Indian company, Indital Construction Machinery Ltd. The acquisition
was finalised in April. Cargotec ownership was raised to 100 percent
in December. In September Cargotec bought the remaining shares (49
percent) in Kalmar India Pvt. Ltd.
In January, Hiab signed a contract to acquire a majority holding of
its Australian importer, BG Crane Pty. Ltd. The acquisition was
finalised in February. In January, Hiab also signed an agreement of
intent to acquire the sales, service and installation units of its
distributor Berger in the Czech Republic, Slovakia, Hungary and
Croatia. The acquisition was finalised in May. In May, Hiab signed a
contract to acquire the Estonian company Balti ES. The acquisition
was finalised in June. In July, Hiab signed an agreement to acquire
Bay Equipment Repairs Inc., a service company based in Florida,
U.S.A.
In January, Kalmar acquired Tagros d.o.o., a Slovenia-based service
company. In January, Kalmar signed also an agreement to acquire Truck
och Maskin i Örnsköldsvik AB, a Swedish company. The acquisition was
finalised in February. In February, Kalmar acquired the assets and
business of Port Equipment Service, Inc. (PES), a U.S. based service
company. In April, Kalmar signed a contract to acquire the remaining
minority share in Kalmar Asia Pacific Ltd. Kalmar now fully owns the
company. In December 2006, a contract was signed to acquire Kalmar's
Spanish distributor, Kalmar Espana S.A. The acquisition was finalised
in April. In August, Kalmar made an agreement to acquire Advanced
Cargo Transshipment B.V. (ACT), an automation and software producer
based in the Netherlands.
In March, MacGREGOR agreed to acquire 90 percent of the Norwegian
Hydramarine AS and Singaporean Plimsoll Corporation Pte Ltd. The
acquisitions were finalised in April. The accounting of these two
business combinations includes also the minority share with the
redemption obligation. The debt-free acquisition price of these
business combinations was approximately EUR 136 million and the
goodwill recognised according to the calculations was EUR 123
million. In May, a contract was signed to acquire Vestnorsk
Hydraulikkservice AS (VNH) of Norway. The acquisition was finalised
in June.
Management estimates that the consolidated sales for January
1-December 31, 2007 would have been approximately EUR 3,057 million,
if the acquisitions had occurred on January 1, 2007.
The table below summarises the acquisitions in January 1-December 31,
2007 excluding acquisitions of minority interests. The business
combinations of Hydramarine AS, Indital Construction Machinery Ltd,
Bay Equipment Repairs Inc. and Balti ES were accounted as preliminary
as the determination of fair values to be assigned to the assets,
liabilities and contingent liabilities were not yet finalised.
Net fair values of Assets and
identifiable liabilities assets and immediately
liabilities of before the
the acquired business
businesses combination
MEUR
Other intangible assets 15.3 0.2
Property, plant and equipment 25.8 25.5
Inventories 54.0 53.0
Non-interest-bearing assets 43.3 43.3
Interest-bearing assets, cash and cash
equivalents 6.7 6.7
Interest-bearing liabilities -21.1 -21.1
Other non-interest-bearing liabilities -92.9 -89.0
Acquired net assets 31.2 18.7
Transaction price 194.3
Costs related to acquisitions 3.3
Goodwill 166.4
Transaction price paid in cash 155.4
Costs related to acquisitions 3.3
Cash and cash equivalents in acquired
businesses -3.0
Total cash outflow from acquisitions 155.6
A goodwill of EUR 10.2 million was recognised of the acquisition of
the minority shares of Kalmar India Pvt. Ltd and Kalmar Asia Pacific
Ltd. The cash outflow from these acquisitions was EUR 13.1 million.
The goodwill is attributable to the experienced and capable personnel
employed by the businesses and to the synergies. Management estimates
that synergies are gained from services' greater global presence,
utilisation of economies of scale and integration of sourcing and
sales network for new products. Synergies are also expected from the
possibility to expand operations to new market areas and to utilise
new product know-how and new technologies in developing current
business.
Accounting Principles
The financial statements review has been prepared according to the
International Accounting Standard 34: Interim Financial Reporting.
The accounting policies adopted are consistent with those of the
annual financial statements of 2007. All figures presented have been
rounded and consequently the sum of individual figures may deviate
from the presented sum figure.
Adoption of new or revised IFRS standards and interpretations
starting in January 1, 2007
Starting from January 1, 2007 Cargotec has adopted the following new
and amended standards and interpretations by the IASB published in
2006:
- IFRS 7, Financial Instruments: Disclosures
- IAS 1 Amendment, Capital Disclosures
- IFRIC 10, Interim Financial Reporting and Impairment
- IFRIC 11, IFRS 2 - Group and Treasury Share Transactions
The adoption of the new and revised standards and interpretations did
not have a material effect on the consolidated financial statements
except on the notes information.
Reclassification of income statement items
In annual financial statements of 2007 share of associated companies'
and joint ventures' net income is presented above operating profit if
they relate to Cargotec's business. The comparative figures of 2006
have been restated accordingly.
Share-based payments
The share-based incentive scheme for top management that was approved
by the Board of Directors in July 2005 has ended in March 2007. The
members of the scheme received 20,660 Cargotec 2005B-option rights
and in cash 65,000 synthetic option rights. Fair value of a synthetic
option was EUR 28.22 at payment day.
In January 2007, Cargotec published a new share-based incentive
scheme for the Company's key managers for the years 2007-2011. The
rewards will be paid during 2009-2012 in both class B shares and
cash. The cash portion is dedicated to cover possible taxes and
tax-related payments resulting from the total reward. Shares
distributed as reward will contain a prohibition to hand over or sell
the shares within one year of the end of an earnings period with the
exception of the final earnings period when no prohibitions are
included. The shares will be lost if the holder leaves the Company
before the prohibition period ends.
At the end of December 2007, the earnings period 2007-2008 involves
66 persons. If they were to receive the maximum number of shares in
accordance with the scheme, a total of 144,925 shares, their
shareholding obtained via the programme would amount to 0.1 percent
of the total voting rights of Company's class A and B shares. The
incentive scheme is booked and valued according to the Share-based
payments -accounting principle presented in the annual financial
statements of 2006.
Calculation of key figures
Total equity attributable to the shareholders
of the parent company
Equity / share = ____________________________________________
Share issue adjusted number of shares
at the end of period
(excluding treasury shares)
Interest-bearing
net debt = Interest-bearing debt - interest-bearing assets
Total equity
Total equity / 100
total assets (%) = x ______________________________________________________
Total assets - advances received
Interest-bearing debt - interest-bearing assets
100
Gearing (%) = x _____________________________________________________
Total equity
Net income for period
Return on equity 100
(%) = x _____________________________________________________
Total equity (average for period)
Income before taxes + interest and other financing
expenses
Return on
capital 100
employed (%) = x _________________________________________________
Total assets - non-interest-bearing debt (average for
period)
Net income for the period attributable
to the shareholders of the parent company
Basic earnings /
share = ______________________________________________________
Share issue adjusted weighted average number
of shares during period (excluding treasury shares)
Quarterly Figures
Cargotec Q4/2007 Q3/2007 Q2/2007 Q1/2007 Q4/2006
Orders received MEUR 1,214 1,028 949 915 716
Order book MEUR 2,865 2,552 2,244 1,811 1,621
Sales MEUR 868 713 743 694 697
Operating profit MEUR 64.3 * 52.5 46.3 58.0 57.8
Operating profit % 7.4 * 7.4 6.2 8.4 8.3
Basic earnings/share EUR 0.45 0.55 0.55 0.62 0.61
Hiab Q4/2007 Q3/2007 Q2/2007 Q1/2007 Q4/2006
Orders received MEUR 254 223 244 264 241
Order book MEUR 260 255 238 237 215
Sales MEUR 244 202 245 240 239
Operating profit MEUR 19.1 13.7 16.6 24.4 22.7
Operating profit % 7.8 6.8 6.8 10.2 9.5
Kalmar Q4/2007 Q3/2007 Q2/2007 Q1/2007 Q4/2006
Orders received MEUR 346 324 367 393 327
Order book MEUR 660 684 693 651 593
Sales MEUR 364 326 330 324 321
Operating profit MEUR 26.9 * 27.8 24.1 26.7 28.3
Operating profit % 7.4 * 8.5 7.3 8.3 8.8
MacGREGOR Q4/2007 Q3/2007 Q2/2007 Q1/2007 Q4/2006
Orders received MEUR 616 483 338 259 149
Order book MEUR 1,946 1,614 1,314 923 813
Sales MEUR 261 187 169 131 138
Operating profit MEUR 22.3 15.0 11.3 10.7 9.7
Operating profit % 8.6 8.0 6.7 8.2 7.0
* Excluding the one-off cost of EUR 18.0 million in Kalmar business
area related to a container spreader inspection and repair programme
