Cargotec Corporation, Stock Exchange Release, April 18, 2008 at 12:00
p.m. Finnish time
* Orders received during the first quarter totalled EUR 1,155
(1-3/2007: 915) million.
* The order book continued to strengthen during the first quarter
reaching EUR 3,287 million (December 31, 2007: 2,865 million).
* Sales grew by 5 percent, amounting to EUR 727 (1-3/2007: 694)
million. The share of Services sales grew to 26 (25) percent of
total sales.
* Operating profit was EUR 44.2 (1-3/2007: 58.0) million. The
operating margin was 6.1 (8.4) percent of sales. Kalmar booked a
EUR 4 million project cost provision during the quarter.
* Cash flow from operating activities before financial items and
taxes totalled EUR 50.1 (1-3/2007: 52.1) million.
* Net income for the period amounted to EUR 31.5 (1-3/2007: 39.4)
million.
* Earnings per share were EUR 0.50 (1-3/2007: 0.62).
* The number of personnel totalled 11,524 (December 31, 2007:
11,187).
* Cargotec expects full year sales growth in 2008 to be at the
previous year's growth level as a result of the strong order
intake and record-high order book. Order intake in 2008 is
expected to continue healthy but lower compared to the very
strong first quarter. Cargotec expects operating margin to
improve from the 2007 level and to be approximately 8 percent for
the full year.
Cargotec's President and CEO Mikael Mäkinen:"Our strong order intake demonstrates that demand for cargo handling
solutions has continued healthy, and gives us a confidence on
reaching our sales growth target for 2008. The quarterly result is
weak, especially in Kalmar where we are now taking actions with
Kalmar's new management to improve the underlying performance of the
business. Focus in Cargotec this year is on strengthening organic
growth and executing the On the Move change programme. The change
programme is essential for our aim to achieve a 10 percent operating
margin target."
Analyst and Press Conference
An analyst and press conference will be combined with a live
international telephone conference and arranged today at 1.00 p.m.
Finnish time at Cargotec's head office, Sörnäisten rantatie 23,
Helsinki. The whole combined event will be held in English. The
interim report will be presented by Cargotec's President and CEO
Mikael Mäkinen. The presentation material will be available on the
Company's internet pages by 1.00 p.m. Finnish time.
The conference call phone numbers are the following:
+1 646 843 4608 (US callers)
+44 20 3023 4412 (non-US callers)
Access code: Cargotec Corporation
The telephone conference can also be viewed as a live audio webcast
through the internet pages at www.cargotec.com. The archived webcast
will be available on the internet pages later during the day.
Sender:
Cargotec Corporation
Eeva Mäkelä
CFO
For further information, please contact:
Eeva Mäkelä, CFO, tel. +358 204 55 4281
Paula Liimatta, IR Manager, tel. +358 204 55 4634
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 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
The markets for Hiab's load handling equipment were strong in Europe
and Asia Pacific and increased in various customer segments,
particularly in Eastern Europe and Russia. Within Europe demand in
Spain and Italy was clearly weaker than in 2007. Truck delivery times
have lengthened considerably in Europe, thus leading to postponed
loader crane and demountable system deliveries. In the United States,
the major fall in demand which took place in the construction market
last year continued to be reflected in poor demand for load handling
equipment.
The markets for Kalmar's container handling equipment were lively and
Kalmar received a high number of new orders. Demand was liveliest in
Europe and Asia. Heavy industrial forklift markets were healthy
although there were indications of slackening demand in some European
countries. The US terminal tractor market clearly exceeded
expectations, when viewed against a background of slackening economic
growth.
Demand for MacGREGOR's marine cargo flow systems and offshore
solutions continued extremely lively. Demand for ship cranes, hatch
covers and cargo securing systems was high, reflecting strong demand
for bulk carriers and general cargo vessels. Demand for offshore
solutions also continued buoyant, and markets for this equipment
grew. The RoRo equipment market was very active, both in Europe and
Asia, while demand for bulk handling equipment continued to be
healthy in Europe, the Middle East and Asia.
Demand for Cargotec Services remained favourable during the first
quarter. That for services for load handling equipment was strong in
Europe due to higher levels of installed equipment and high usage
rates whereas, in the United States, demand fell due to the very low
usage rate of such equipment. Demand for container handling equipment
services remained high both in Europe and Asia. Also several new
orders for marine cargo flow services were secured. In particular,
demand for conversion projects grew.
Orders Received
Orders received by Cargotec in January-March 2008 totalled EUR 1,155
(1-3/2007: 915) million.
Orders received, MEUR 1-3/2008 1-3/2007 1-12/2007
Hiab 228 264 985
Kalmar 490 393 1,429
MacGREGOR 439 259 1,696
Internal orders received -2 -1 -4
Total 1,155 915 4,106
Hiab
Of all orders received in January-March 2008, Hiab accounted for EUR
228 (1-3/2007: 264) million.
Hiab's order intake in the first quarter was lower than a year ago.
Hiab secured individual orders, which is typical of its operations.
In particular, orders received grew in Eastern Europe and Russia.
Hiab also received orders from the Middle East, China and India.
Demand for XS 1055, Hiab's largest loader crane launched in the
autumn of 2007, was strong.
Kalmar
Of all orders received in January-March 2008, Kalmar accounted for
EUR 490 (1-3/2007: 393) million. Several orders include navigation,
container position verification and remote monitoring systems
developed by Kalmar.
In February, Kalmar received an order for 22 E-One+ rubber-tyred
gantry (RTG) cranes from South African Transnet Limited. The
equipment will be delivered in 2008-2009 for the new Port of Ngqura.
In February, Kalmar also secured an order from the Port of Tacoma on
the US West Coast for the supply of seven straddle carriers. The
straddle carriers will be used in container handling in on-dock rail
facilities and they will be equipped with Kalmar's CAN-BUS monitoring
system, speeding up their operation. Delivery of the machines is
scheduled for October 2008.
In March, Kalmar received an order for 48 EDRIVE® straddle carriers
for Eurogate's operations in Germany. 22 units have been ordered for
Eurogate's CTB Bremerhaven container terminal, and 13 units will go
to Eurogate's CTH Hamburg. Another 13 units will be deployed at the
MSC Gate Bremerhaven terminal, a joint venture between Eurogate and
Mediterranean Shipping Company. The equipment deliveries will start
in autumn 2008 with the last units arriving at the beginning of 2009.
In addition, Kalmar secured a contract with Steveco Oy for ten Kalmar
EDRIVE® straddle carriers for the Mussalo container terminal in
Kotka, Finland. Delivery will commence in the summer and end in
October 2008.
In March, Kalmar received E-One+ RTG orders from, for example,
Thailand, Vietnam and Brazil. Kalmar will deliver 17 of these cranes
to Vietnam International Container Terminals' Ho Chi Minh City
facility between 2008 and 2010. LCMT Company Ltd. from Thailand
ordered six RTGs for its terminal at the Port of Laem Chabang. The
cranes are due to be delivered by March 2009. Furthermore, South
America's largest container terminal operator, Santos Brasil S/A,
ordered 12 RTGs that will be delivered by March 2009.
MacGREGOR
Of all orders received in January-March 2008, MacGREGOR accounted for
EUR 439 (1-3/2007: 259) million.
During the first quarter, MacGREGOR received a large number of ship
crane and hatch cover orders mainly from China and Korea. MacGREGOR
will deliver a total of 276 bulk handling cranes for vessels that
will be delivered to ship owners in Germany, Singapore, China and
Korea. During the first quarter, MacGREGOR agreed to deliver hatch
covers for 70 container vessels, 120 bulk vessels and 41 general
cargo ships. The equipment will be delivered in 2009-2011.
In January, MacGREGOR received RoRo equipment orders for 12 pure
car/truck carriers (PCTCs). The orders include liftable car decks for
four vessels that will be built in the Korean Hyundai Heavy
Industries shipyard and will be delivered during 2009-2010.
Additionally, the orders include the design and delivery of key
components for eight PCTCs under construction in China.
In March, MacGREGOR received a major bulk handling equipment order
from Taiwan as Taiwan Power Company ordered equipment intended for
the handling of coal. MacGREGOR's Siwertell bulk handling system
features a totally closed conveying system that limits the amount of
cargo dust released into the air.
In March, MacGREGOR also received an order for 30 shipsets of tanker
cranes for a Chinese shipyard. Provision and hose handling cranes
will be delivered in 2008-2010 for tankers ordered by Turkish,
Norwegian, Russian and Cypriot ship owners.
MacGREGOR's Offshore division received a large number of orders, in
particular for davits, for delivery during 2008-2009. MacGREGOR
Offshore is the world's leading supplier of sophisticated davit
systems.
Cargotec Services
The services market continued to be active, which was reflected in
the number of maintenance and modernisation contracts and spare part
orders received.
In March, Kalmar signed a five-year service contract with the
Norwegian company, Norsteve Oslo, covering the maintenance, spare
parts and repairs of five straddle carriers at the Sjursøya container
terminal in the Port of Oslo.
During the first quarter of 2008, MacGREGOR secured several hatch
cover conversion projects that will be carried out during 2008. The
demand is supported by legislation prohibiting the use of single hull
tankers, which leads to many of them being converted into bulkers.
Furthermore, MacGREGOR received a major maintenance contract for ship
unloaders from the Philippines.
Order Book
Cargotec's order book totalled EUR 3,287 (December 31, 2007: 2,865)
million on March 31, 2008. Of the order book total, Hiab accounted
for EUR 253 (260) million, Kalmar EUR 824 (660) million, and
MacGREGOR EUR 2,211 (1,946) million. A major part of MacGREGOR's
record-high order book is for delivery in 2009-2012.
Order book, MEUR 31.3.2008 31.3.2007 31.12.2007
Hiab 253 237 260
Kalmar 824 651 660
MacGREGOR 2,211 923 1,946
Internal order book -1 0 -1
Total 3,287 1,811 2,865
Sales
Cargotec's sales grew in January-March 2008 by 5 percent and totalled
EUR 727 (1-3/2007: 694) million. The sales impact of acquisitions
completed during the last 12 months was EUR 52 million.
Hiab's sales in the first quarter amounted to EUR 230 (1-3/2007: 240)
million, Kalmar's sales were EUR 322 (324) million and MacGREGOR's
sales EUR 177 (131) million. The decline in Hiab's sales compared to
first quarter 2007 is due to the marked fall in demand in the United
States, for which strong growth in Europe and Asia could not fully
compensate. The limited availability of trucks in Europe delayed some
Hiab deliveries as the equipment could not be installed. Kalmar's
quarterly sales were flat reflecting the relatively low order intake
in early autumn 2007. The increase in MacGREGOR's sales was
attributable to the increased proportion of turnkey solutions as well
as the acquisition of the offshore business after the reference
period.
Sales, MEUR 1-3/2008 1-3/2007 1-12/2007
Hiab 230 240 931
Kalmar 322 324 1,343
MacGREGOR 177 131 748
Internal sales -2 0 -4
Total 727 694 3,018
Sales for services in January-March 2008 increased by 9 percent
year-on-year and amounted to EUR 191 (1-3/2007: 175) million,
representing 26 (25) percent of total sales. Services accounted for
22 (17) percent of sales at Hiab, 31 (29) percent at Kalmar, and 23
(32) percent at MacGREGOR in January-March.
Financial Result
Cargotec's operating profit for January-March 2008 totalled EUR 44.2
(1-3/2007: 58.0) million, representing 6.1 (8.4) percent of sales.
Hiab accounted for EUR 17.7 (24.4) million of first quarter operating
profit, Kalmar for EUR 19.4 (26.7) million, and MacGREGOR for EUR
11.9 (10.7) million.
Cargotec's operating profit falling short of 2007 levels is
attributable to several different reasons. In Hiab the decline is a
result of the negative impact of the decline of the US markets on
profitability. Kalmar's result is weakened by a EUR 4 million project
cost provision. In MacGREGOR the scheduling of projects explains the
low profitability level as quarterly deliveries were still relatively
low and projects recognised during the quarter had lower than average
profitability. Cargotec's operating profit includes a EUR 1.4 (0.7)
million cost impact from the purchase price allocation treatment of
acquisitions.
Net income for the period was EUR 31.5 (1-3/2007: 39.4) million and
earnings per share were EUR 0.50 (0.62).
Balance Sheet, Financing and Cash Flow
On March 31, 2008, Cargotec's net working capital amounted to EUR 263
(December 31, 2007: 253) million. Tangible assets on the balance
sheet were EUR 252 (254) million and intangible assets EUR 763 (751)
million.
Cash flow from operating activities before financial items and taxes
was EUR 50.1 (1-3/2007: 52.1) million during the first quarter.
Dividend payment totalled EUR 61.3 (59.0) million. Net debt on March
31, 2008 was EUR 331 (December 31, 2007: 304) million. The total
equity/total assets ratio was 37.5 (38.3) percent while gearing was
37.8 (33.9) percent.
Return on equity for January-March was 14.2 (1-3/2007: 18.3) percent
and return on capital employed was 13.4 (19.9) percent.
Cargotec had EUR 635 million of committed credit facilities on March
31, 2008. These facilities were unused.
New Products and Product Development
In January-March 2008, Cargotec's research and product development
expenditure was EUR 11.2 (1-3/2007: 11.1) million, representing 1.5
(1.6) percent of sales.
During the first quarter Hiab opened a state-of-the-art crane-testing
centre at its loader crane production facility in Hudiksvall, Sweden.
The centre offers Hiab and other business areas the opportunity to
test more and longer cranes and components as well as ensuring
testing is more precise than ever before.
Kalmar launched a new, fully-automated shuttle carrier that is able
to pick, place and transport containers between ship-to-shore (STS)
and yard stacking cranes without a driver. The new Kalmar
Autoshuttle(TM) ensures the cost efficiency and productivity of port
operations, particularly in the very big ports of the future.
MacGREGOR continued to develop electronically operated cargo handling
solutions and a new ship crane control system. The Offshore division
focused on the development of deck equipment enabling the use of
cranes in difficult weather conditions and when operating in deep
waters.
In February, MacGREGOR signed an agreement with the US Navy on the
development of a ship-to-ship vehicle transfer system. With the help
of this system, large vehicles can on sea be transferred from RoRo
ships to a mobile landing platform ship. The system will be delivered
by the end of 2009.
Capital Expenditure
Cargotec's capital expenditure for January-March 2008, excluding
acquisitions and customer financing, totalled EUR 10.2 (1-3/2007:
9.8) million. Customer financing investments were EUR 7.7 (5.3)
million.
In January, Cargotec announced the launch of an extensive On the Move
change programme aiming at a profitability improvement of EUR 80-100
million. The change programme will consist of several projects to
consolidate scattered support functions, such as HR, IT, Finance and
Communications, and to improve efficiency at the customer interface
by harmonising operations between business areas. In addition, common
practices will be established in global supply chain development.
This will form the basis for expanding Cargotec's production and
assembly capacity as well as its sourcing network in emerging
markets. The programme's primary target is to enable increased
closeness and time devoted to customers.
The first joint supply chain projects will be in China and Estonia.
The expansion of Hiab's assembly unit in Shanghai, China will be made
at the same site as the existing local Kalmar facility. The capacity
of the production unit in Narva, Estonia, acquired in 2007, will be
upgraded in order to meet increased component needs and improve
productivity. The country organisation streamlining will begin in
Finland, where all operational activities within Finland will be
transferred to one company during the year.
Hiab combined its loader crane and forestry crane product lines at
the beginning of 2008. This organisational change strengthened the
use of shared resources in crane product development, manufacturing
and marketing. 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.
Kalmar expanded its presence in the Americas by opening a new sales
company in Mexico to respond to higher demand from the intermodal
markets and increased port activities. The new sales and service
company is situated in Guadalajara, Mexico's second largest city.
Furthermore, Kalmar opened a new service unit in Zeebrugge, Belgium.
In March, MacGREGOR opened a new offshore equipment production unit
in Tianjin, China, approximately half of its production being
delivered to ports in various parts of China. The new unit also
enables production optimisation and efficiency improvements in the
Offshore production units of Norway and Singapore.
Acquisitions
During the first quarter of 2008, Cargotec completed four
acquisitions of which three in Hiab business area.
In order to strengthen its R&D capabilities, Cargotec acquired 60
percent of Idea Designing & Consulting S.r.l. in Massa, Italy. The
company employs ten people for product design.
At the end of March, Hiab concluded an agreement to acquire the South
African company Bowman Cranes (Pty) Limited, Hiab's long-term agent
in the region. This company supplies, installs and services
truck-related load handling equipment. In 2007, its sales were
approximately EUR 18 million and it employed 70 people. The deal is
subject to the approval of regulatory authorities.
In February, Hiab signed an agreement to acquire 70 percent of the
operations of an Australian company, O'Leary's Material Handling
Services Pty Ltd., the leading supplier of tail lifts in Western
Australia. The company employs 24 people and had sales of EUR 2.6
million in 2007. The acquisition was finalised in early April.
In February, Hiab also agreed to acquire the UK-based Del Equipment
(UK) Limited and the US-based Ultron Lift Corp. Owned by Militello
Holdings, Inc., these companies manufacture tail lifts in UK and US.
The aggregate sales of the companies in 2007 were approximately EUR
23 million and the companies employ 164 persons. These acquisitions
were finalised at the end of March.
Employees
On March 31, 2008, Cargotec employed 11,524 (March 31, 2007: 9,083)
people, the year-on-year increase being attributable to the
acquisitions concluded in 2007 and 2008. Hiab employed 4,592 (3,780)
people, Kalmar 4,555 (4,041), and MacGREGOR 2,278 (1,203). Of
Cargotec's total employees, 13 (16) percent were located in Finland,
22 (26) percent in Sweden and 30 (27) percent in the rest of Europe.
North and South American personnel represented 12 (15) percent, Asia
Pacific 22 (15) percent and the rest of the world 1 (1) percent of
total employees.
Shares and Share Capital
Cargotec's share capital on March 31, 2008 was EUR 64,235,283
(December 31, 2007: 64,220,373). The share capital increased by EUR
14,910 during the first quarter as a result of the subscription for
class B shares under Cargotec option rights. On March 31, 2008, the
number of listed class B shares totalled 54,709,194 while that of
unlisted class A shares totalled 9,526,089. Trading with 2005A stock
options ended in March. There were 31,485 subscribed 2005A options
unregistered at the end of the first quarter. The remaining 2005B
stock options may be used to subscribe for further 142,242 class B
shares. In total, the stock options may increase the share capital by
EUR 173,727.
Market Capitalisation and Trading
The closing price for Cargotec's class B shares on March 31, 2008 was
EUR 31.09. The average share price for the first quarter was EUR
29.21, the highest quotation being EUR 36.49 and the lowest EUR
22.47. During the first quarter, 26.8 million Cargotec class B shares
were traded on the OMX Nordic Exchange in Helsinki, corresponding to
a turnover of EUR 782 million.
On March 31, 2008, the total market value of the Company's class B
shares was EUR 1,642 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 price of class B
shares on the last trading day of the quarter, was EUR 1,932 million,
excluding treasury shares held by the Company. At the end of the
first quarter, the Company held a total of 1,905,725 class B shares,
which corresponds to 3 percent of the total number of shares.
Changes in Cargotec's Management
On February 1, 2008, Cargotec's Deputy CEO Kari Heinistö was
appointed to lead the On the Move change programme. He continues as a
member of the Executive Board and secretary to Cargotec's Board of
Directors. Eeva Mäkelä was appointed as Cargotec's CFO as of February
1, 2008. She is responsible for accounting, finance, risk management,
investor relations and communications, and will continue as a member
of the Executive Board. Minna Karhu was appointed as Vice President,
Corporate Communications of Cargotec as of February 1, 2008.
Decisions Taken at Cargotec Corporation's Annual General Meeting
Cargotec Corporation's Annual General Meeting (AGM) was held on
February 29, 2008 in Helsinki. The meeting approved the financial
statements and consolidated financial statements as well as 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, 2007.
The AGM approved a dividend of EUR 1.04 for each of the 9,526,089
class A shares and EUR 1.05 for the 52,789,559 outstanding class B
shares.
The number of members of the Board of Directors was confirmed at six
according to the proposal of the Board's Nomination and Compensation
Committee. Henrik Ehrnrooth, Tapio Hakakari, Ilkka Herlin, Peter
Immonen, Karri Kaitue and Antti Lagerroos were elected as members of
the Board of Directors.
Authorised public accountants Johan Kronberg and
PricewaterhouseCoopers Oy were re-elected as auditors according to
the proposal of Audit Committee of Cargotec Corporation's Board of
Directors.
Authorisations Granted by the Annual General Meeting
The AGM authorised the Board of Directors of Cargotec to decide on
acquisition of the Company's own shares with non-restricted equity.
The shares may be acquired 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. The shares may be acquired through
a directed acquisition as defined in Finnish Companies Act, Chapter
15 § 6.
Altogether no more than 6,400,000 own shares may be purchased, 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 1,904,725 class B
shares in the Company's possession on the AGM date, which were
purchased during 2005-2007. The proposed amount corresponds to less
than 10 percent of the share capital of the Company and the total
voting rights. The acquisition of own shares will decrease the
non-restricted equity of the Company. The authorisation is in effect
for a period of 18 months from the date of decision of the AGM.
In addition, the AGM authorised the Board of Directors to decide on
transfer of treasury shares. The Board of Directors was authorised to
decide to whom and in which order the treasury shares will be
transferred. The Board of Directors may decide on the transfer of
treasury shares otherwise than in proportion to the existing
pre-emptive right of shareholders to purchase the Company's own
shares. The treasury 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 transfer of the shares in public trading
at the OMX Nordic Exchange, Helsinki to be used as compensation in
possible acquisitions. This authorisation is in effect for a period
of 18 months from the date of decision of the AGM.
In addition, the AGM resolved to amend the Articles of Association of
the Company mainly due to and to align with the new Finnish Companies
Act effective as from 2006.
Organisation of the Board of Directors
Cargotec's Board of Directors in its organising meeting elected Ilkka
Herlin to continue as Chairman of the Board and Henrik Ehrnrooth to
continue as Deputy Chairman. Cargotec's Deputy CEO Kari Heinistö
continues to act as secretary to the Board of Directors. Cargotec's
Board of Directors decided that the Audit Committee, Nomination and
Compensation Committee as well as Working Committee continue to
assist the Board in its work.
The Board of Directors elected among its members Ilkka Herlin, Karri
Kaitue and Antti Lagerroos as members of the Audit Committee. Karri
Kaitue was re-elected as Chairman of the Audit Committee. Board
members Henrik Ehrnrooth, Tapio Hakakari, Ilkka Herlin and Peter
Immonen were elected to the Nomination and Compensation Committee.
Ilkka Herlin was re-elected as chairman of the Nomination and
Compensation Committee. Board members Tapio Hakakari, Ilkka Herlin
and Peter Immonen were elected to the Working Committee. Ilkka Herlin
was re-elected as chairman of the Working Committee.
Share Repurchases
Cargotec's Board of Directors decided to exercise the authorisation
of the AGM to acquire the Company's own shares.
In accordance with the authorisation the shares will be acquired 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.
Class B shares will be purchased at public trading in the OMX Nordic
Exchange Helsinki 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 OMX Nordic Exchange
Helsinki on the purchase date.
A total of 1,000 own shares were repurchased during the first
quarter. Cargotec held a total of 1,905,725 class B shares on March
31, 2008.
Short-term Risks and Uncertainties
The global economic development is affected by significant
uncertainty which increases short-term risks. Cargotec estimates that
its principal short-term risks and uncertainties are related to
general economic development and the availability of components.
The impacts of the slowing US economy elsewhere in the world may
decrease the willingness of Cargotec's customers to invest. A
possible slowdown in the European economy and construction sector
would have a negative effect in particular on demand for Hiab's load
handing and Kalmar's heavy material handling equipment.
Cargotec has outsourced a significant proportion of its component
production and part of its assembly operations. Due to generally high
demand for many of the components used by Cargotec, their
availability remains restricted, thus making it more difficult to
optimise assembly plant operations and causing risk of extra costs
and delivery delays. Additionally, occasional delays in truck
deliveries in Europe may have an adverse impact on the delivery
schedules of Hiab products during the spring 2008.
Cargotec has made a significant number of acquisitions during the
last 12 months. Although these acquisitions are relatively small in
size and geographically dispersed, integrations always involve a
degree of uncertainty.
Events after the Reporting Period
MacGREGOR signed an agreement to acquire US based Platform Crane
Services International Inc (PCS) in April. The sales of the company
in 2007 were USD 16 million and the company employs 105 persons. The
transaction is subject to due diligence.
Outlook
Cargotec expects full year sales growth in 2008 to be at the previous
year's growth level as a result of the strong order intake and
record-high order book. Order intake in 2008 is expected to continue
healthy but lower compared to the very strong first quarter. Cargotec
expects operating margin to improve from the 2007 level and to be
approximately 8 percent for the full year.
Helsinki, April 18, 2008
Cargotec Corporation
Board of Directors
This interim report is unaudited.
Cargotec's Interim Report January-March 2008
Condensed Consolidated Income Statement
MEUR 1-3/2008 1-3/2007 1-12/2007
Sales 726.7 693.9 3,018.2
Cost of goods sold -582.5 -538.1 -2,376.8
Non-recurring items * - - -18.0
Gross profit 144.2 155.8 623.4
Gross profit, % 19.8 % 22.5 % 20.7 %
Costs and expenses -87.5 -85.9 -360.8
Depreciation -12.5 -12.0 -59.8
Share of associated companies'
and
joint ventures' income 0.0 0.1 0.3
Operating profit 44.2 58.0 203.1
Operating profit, % 6.1 % 8.4 % 6.7 %
Financing income and expenses -4.8 -3.4 -18.7
Income before taxes 39.4 54.6 184.4
Income before taxes, % 5.4 % 7.9 % 6.1 %
Taxes -7.9 -15.2 -46.0
Net income for the period 31.5 39.4 138.4
Net income for the period, % 4.3 % 5.7 % 4.6 %
Net income for the period
attributable to:
Equity holders of the Company 30.9 39.4 136.5
Minority interest 0.5 0.0 1.8
Total 31.5 39.4 138.4
Earnings per share for profit
attributable
to the equity holders of the
Company:
Basic earnings per share, EUR 0.50 0.62 2.17
Diluted earnings per share, EUR 0.50 0.62 2.16
* Kalmar business area related container spreader inspection and
repair programme
Condensed Consolidated Balance
Sheet
ASSETS
MEUR 31.3.2008 31.3.2007 31.12.2007
Non-current assets
Intangible assets 762.6 579.6 751.2
Tangible assets 251.5 231.6 253.7
Loans receivable and other
interest-bearing assets 1) 5.5 0.2 5.5
Investments 7.8 3.3 7.2
Non-interest-bearing assets 86.9 59.1 76.4
Total non-current assets 1,114.3 873.8 1,094.0
Current assets
Inventories 737.1 562.6 657.4
Loans receivable and other
interest-bearing assets 1) 0.5 0.2 0.4
Accounts receivable and other
non-interest-bearing assets 687.2 521.9 651.9
Cash and cash equivalents 1) 124.9 278.0 179.0
Total current assets 1,549.7 1,362.7 1,488.7
Total assets 2,663.9 2,236.5 2,582.6
EQUITY AND LIABILITIES
MEUR 31.3.2008 31.3.2007 31.12.2007
Equity
Shareholders' equity 868.8 834.7 890.6
Minority interest 6.9 7.6 6.1
Total equity 875.8 842.3 896.7
Non-current liabilities
Loans 1) 421.9 423.5 433.3
Deferred tax liabilities 51.9 27.0 38.5
Provisions 37.3 34.9 38.4
Pension benefit and other
non-interest-bearing liabilities 76.2 55.6 103.3
Total non-current liabilities 587.3 541.0 613.6
Current liabilities
Loans 1) 40.1 34.5 55.1
Provisions 66.8 30.8 70.8
Accounts payable and other
non-interest-bearing liabilities 1,094.0 787.9 946.5
Total current liabilities 1,200.8 853.2 1,072.4
Total equity and liabilities 2,663.9 2,236.5 2,582.6
1) Included in interest-bearing
net debt
Consolidated Statement of Changes in Equity
Attributable to the equity holders of the company
Sha- Trans- Fair Mino-
re Share Trea- lation value Retai- rity
capi- pre-mium sury differ- reser- ned inte- Total
MEUR tal account shares rences ves earnings Total rest equity
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* -7.9 -7.9 0.0 -7.9
Gain/
loss
on cash
flow
hedges
trans-
ferred
to IS 1.3 1.3 0.0 1.3
Translation
differences -4.7 -4.7 -0.2 -4.9
Net
income
recognised
directly
in
equity - - - -4.7 -6.6 - -11.3 -0.2 -11.5
Net
income
for the
period 39.4 39.4 0.0 39.4
Total
recog-
nised
income
and
expenses
for the
period - - - -4.7 -6.6 39.4 28.1 -0.2 27.9
Divi-
dends
paid -63.2 -63.2 -63.2
Shares
sub-
scribed
with
options 0.1 0.5 0.6 0.6
Share-
based
incentives,
value of
received
services* 0.4 0.4 0.4
Other
changes - -0.2 -0.2
Equity
on
31.3.2007 64.1 96.5 -23.9 -16.7 3.9 710.8 834.7 7.6 842.3
Equity
on
31.12.2007 64.2 97.4 -70.0 -29.6 19.9 808.7 890.6 6.1 896.7
Gain/
loss
on
cash flow
hedges
booked
to equity* 26.1 26.1 0.2 26.4
Gain/
loss
on
cash flow
hedges
transferred
to IS -3.6 -3.6 -3.6
Translation
differences -10.3 -10.3 -10.3
Total
net income
recognised
directly
in equity - - - -10.3 22.5 - 12.2 0.2 12.5
Net income
for the
period 30.9 30.9 0.6 31.5
Total
recognised
income
and
expenses
for the
period - - - -10.3 22.5 30.9 43.1 0.8 43.9
Dividends
paid -65.3 -65.3 -65.3
Shares
subscribed
with
options 0.0 0.1 0.1 0.1
Acquisition
of treasury
shares 0.0 0.0 0.0
Share-
based
incentives,
value of
received
services* 0.3 0.3 0.3
Other
changes - -
Equity
on
31.3.2008 64.2 97.5 -70.0 -39.9 42.5 774.6 868.9 6.9 875.8
* Net of
tax
Condensed Consolidated Cash Flow
Statement
MEUR 1-3/2008 1-3/2007 1-12/2007
Net income for the period 31.5 39.4 138.4
Depreciation 12.5 12.0 59.8
Other adjustments 12.7 18.5 64.4
Change in working capital -6.5 -17.8 -27.4
Cash flow from operations 50.1 52.1 235.1
Cash flow from financial items and
taxes 3.6 -25.1 -62.5
Cash flow from operating activities 53.7 27.0 172.6
Acquisitions -14.8 -13.0 -172.5
Cash flow from investing
activities, other items -17.1 -18.1 -91.8
Cash flow from investing activities -31.9 -31.1 -264.3
Acquisition of treasury shares 0.0 - -46.1
Proceeds from share subscriptions 0.4 0.6 1.5
Dividends paid -61.3 -59.0 -63.8
Proceeds from long-term borrowings 0.7 226.9 274.5
Repayments of long-term borrowings -0.8 -2.8 -29.5
Proceeds from short-term borrowings 6.0 4.8 40.8
Repayments of short-term borrowings -14.5 -7.2 -31.5
Cash flow from financing activities -69.5 163.3 145.9
Change in cash -47.7 159.2 54.2
Cash, cash equivalents and bank
overdrafts at the beginning of
period 167.5 114.5 114.5
Effect of exchange rate changes -1.1 -0.4 -1.1
Cash, cash equivalents and bank
overdrafts at the end of period 118.7 273.3 167.5
Bank overdrafts at the end of
period 6.1 4.7 11.4
Cash and cash equivalents at the
end of period 124.9 278.0 179.0
Key Figures
1-3/2008 1-3/2007 1-12/2007
Equity/share EUR 13.94 13.16 14.29
Interest-bearing net debt MEUR 331.1 179.6 303.6
Total equity/total assets % 37.5 40.7 38.3
Gearing % 37.8 21.3 33.9
Return on equity % 14.2 18.3 15.6
Return on capital employed % 13.4 19.9 16.8
Segment Reporting
Sales by geographical
segment, MEUR 1-3/2008 1-3/2007 1-12/2007
EMEA 441 384 1,677
Americas 116 176 647
Asia Pacific 171 134 695
Total 727 694 3,018
Sales by geographical
segment, % 1-3/2008 1-3/2007 1-12/2007
EMEA 60.6 % 55.3 % 55.6 %
Americas 15.9 % 25.4 % 21.4 %
Asia Pacific 23.5 % 19.3 % 23.0 %
Total 100.0 % 100.0 % 100.0 %
Sales, MEUR 1-3/2008 1-3/2007 1-12/2007
Hiab 230 240 931
Kalmar 322 324 1,343
MacGREGOR 177 131 748
Internal sales -2 0 -4
Total 727 694 3,018
Operating profit, MEUR 1-3/2008 1-3/2007 1-12/2007
Hiab 17.7 24.4 73.8
Kalmar 19.4 26.7 105.5 *
MacGREGOR 11.9 10.7 59.4
Corporate administration
and other -4.8 -3.8 -17.5
Operating profit from
operations 44.2 58.0 221.1
None-recurring items - - -18.0
Total 44.2 58.0 203.1
* Excluding the one-off cost of EUR 18.0 million related to a
container spreader inspection and repair programme
Operating profit, % 1-3/2008 1-3/2007 1-12/2007
Hiab 7.7 % 10.2 % 7.9 %
%
Kalmar 6.0 % 8.3 % 7.9 *
MacGREGOR 6.7 % 8.2 % 7.9 %
Cargotec, operating profit %
from operations 6.1 % 8.4 % 7.3 *
Cargotec 6.1 % 8.4 % 6.7 %
* Excluding the one-off cost of EUR 18.0 million related to a
container spreader inspection and repair programme
Orders received, MEUR 1-3/2008 1-3/2007 1-12/2007
Hiab 228 264 985
Kalmar 490 393 1,429
MacGREGOR 439 259 1,696
Internal orders received -2 -1 -4
Total 1,155 915 4,106
Order book, MEUR 31.3.2008 31.3.2007 31.12.2007
Hiab 253 237 260
Kalmar 824 651 660
MacGREGOR 2,211 923 1,946
Internal order book -1 0 -1
Total 3,287 1,811 2,865
Capital expenditure, MEUR 1-3/2008 1-3/2007 1-12/2007
In fixed assets (excluding
acquisitions) 10.1 9.8 52.5
In leasing agreements 0.1 0.0 0.7
In customer financing 7.7 5.3 37.5
Total 17.8 15.1 90.7
Number of employees at the end
of period 31.3.2008 31.3.2007 31.12.2007
Hiab 4,592 3,780 4,418
Kalmar 4,555 4,041 4,459
MacGREGOR 2,278 1,203 2,223
Corporate administration 99 59 87
Total 11,524 9,083 11,187
Average number of employees 1-3/2008 1-3/2007 1-12/2007
Hiab 4,419 3,702 4,091
Kalmar 4,513 3,872 4,233
MacGREGOR 2,257 1,153 1,880
Corporate administration 95 57 72
Total 11,284 8,784 10,276
Notes
Taxes in income statement
MEUR 1-3/2008 1-3/2007 1-12/2007
Current year tax expense 13.8 25.0 56.2
Deferred tax expense -1.4 -1.6 -3.9
Tax expense for previous years -4.5 -8.2 -6.3
Total 7.9 15.2 46.0
Commitments
MEUR 31.3.2008 31.3.2007 31.12.2007
Guarantees 0.7 0.5 2.2
Dealer financing 1.7 9.6 8.4
End customer financing 6.7 6.7 7.5
Operating leases 45.5 38.9 47.7
Off balance sheet investment
commitments 0.8 - 1.2
Other contingent liabilities 3.6 3.8 3.7
Total 59.0 59.5 70.6
Fair values of derivative
financial instruments
Positive
fair Negative Net fair Net fair Net fair
value fair value value value value
MEUR 31.3.2008 31.3.2008 31.3.2008 31.3.2007 31.12.2007
FX forward
contracts, cash
flow hedges 81.0 39.4 41.6 3.3 11.3
FX forward
contracts,
non-hedge
accounted 4.7 4.9 -0.2 11.2 20.7
Interest rate
swaps, non-hedge
accounted - - - 0.0 -
Cross currency
and interest rate
swaps, cash flow
hedges 0.0 17.1 -17.1 2.1 -4.9
Total 85.7 61.4 24.3 16.6 27.1
Non-current
portion:
FX forward
contracts, cash
flow hedges 25.4 15.5 10.0 -0.1 -1.1
Cross currency
and interest rate
swaps, cash flow
hedges 0.0 17.1 -17.1 2.1 -4.9
Non-current
portion 25.4 32.5 -7.1 2.0 -6.0
Current portion 60.2 28.8 31.4 14.6 33.2
Nominal values of derivative financial
instruments
MEUR 31.3.2008 31.3.2007 31.12.2007
FX forward contracts 2,927.0 1,820.0 2,610.0
Interest rate swaps - 10.0 -
Cross currency and interest rate swaps 225.7 225.7 225.7
Total 3,152.7 2,055.7 2,835.7
Acquisitions 2008
In January-March 2008 Cargotec made a few acquisitions in line with
its strategy. These acquisitions were individually immaterial.
In February, Hiab made an agreement to acquire the UK-based Del
Equipment (UK) Limited and the US-based Ultron Lift Corp. These
companies manufacture tail lifts in the UK and the US. The
acquisitions were finalised at the end of March.
In February, in order to strengthen its R&D capabilities, Cargotec
acquired 60 percent of Idea Designing & Consulting S.r.l., Italy. The
accounting of this business combination also includes the minority
share, which includes a redemption obligation.
Management estimates that the consolidated sales for January 1-March
31, 2008 would have been EUR 732 million, if the acquisitions had
been completed on January 1, 2008.
The table below summarises the acquisitions completed in
January-March 2008. The business combinations 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 liabilitiesassets and immediately
liabilities of before the
the acquired business
businesses combination
MEUR
Other intangible assets 6.5 4.8
Property, plant and equipment 0.5 0.5
Inventories 3.2 3.2
Non-interest-bearing assets 5.2 5.2
Interest-bearing assets, cash and cash
equivalents 0.2 0.2
Interest-bearing liabilities -4.6 -4.6
Other non-interest-bearing liabilities -4.5 -3.9
Acquired net assets 6.4 5.3
Transaction price 15.1
Costs related to acquisitions 0.0
Goodwill 8.6
Transaction price paid in cash 13.8
Costs related to acquisitions 0.0
Cash and cash equivalents in acquired
businesses -0.2
Total cash outflow from acquisitions 13.6
Accounting Principles
The interim report 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 interpretation starting in January 1, 2008
Starting from January 1, 2008 Cargotec has adopted the following new
interpretation by the IASB published in 2007:
- IFRIC 14, IAS 19 - The Limit on a Defined Benefit Asset, Minimum
Funding Requirements and their interaction.
The adoption of the interpretation does not have a material effect on
the interim financial statements.
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 Interest-bearing debt -
net debt = interest-bearing assets
Total equity
Total equity /
total assets (%) = 100 x ____________________________________
Total assets - advances received
Interest-bearing debt -
interest-bearing assets
Gearing (%) = 100 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
employed (%) = 100 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 Q1/2008 Q4/2007 Q3/2007 Q2/2007 Q1/2007
Orders received MEUR 1,155 1,214 1,028 949 915
Order book MEUR 3,287 2,865 2,552 2,244 1,811
Sales MEUR 727 868 713 743 694
Operating profit MEUR 44.2 64.3 * 52.5 46.3 58.0
Operating profit % 6.1 7.4 * 7.4 6.2 8.4
Basic
earnings/share EUR 0.50 0.45 0.55 0.55 0.62
Hiab Q1/2008 Q4/2007 Q3/2007 Q2/2007 Q1/2007
Orders received MEUR 228 254 223 244 264
Order book MEUR 253 260 255 238 237
Sales MEUR 230 244 202 245 240
Operating profit MEUR 17.7 19.1 13.7 16.6 24.4
Operating profit % 7.7 7.8 6.8 6.8 10.2
Kalmar Q1/2008 Q4/2007 Q3/2007 Q2/2007 Q1/2007
Orders received MEUR 490 346 324 367 393
Order book MEUR 824 660 684 693 651
Sales MEUR 322 364 326 330 324
Operating profit MEUR 19.4 26.9 * 27.8 24.1 26.7
Operating profit % 6.0 7.4 * 8.5 7.3 8.3
MacGREGOR Q1/2008 Q4/2007 Q3/2007 Q2/2007 Q1/2007
Orders received MEUR 439 616 483 338 259
Order book MEUR 2,211 1,946 1,614 1,314 923
Sales MEUR 177 261 187 169 131
Operating profit MEUR 11.9 22.3 15.0 11.3 10.7
Operating profit % 6.7 8.6 8.0 6.7 8.2
* Excluding the one-off cost of EUR 18.0 million in Kalmar business
area related to a container spreader inspection and repair programme
