Cargotec Corporation, Stock Exchange Release, January 30, 2007 AT 12:00 p.m. Finnish Time
Cargotec Corporations Financial Statements Review 2006
- Orders received grew significantly and reached EUR 2,910
(112/2005: 2,385) million. During the fourth quarter, orders
received amounted to EUR 716 (1012/2005: 591) million.
- The order book on December 31, 2006 totaled EUR 1,621
(December 31, 2005: 1,257) million.
- Net sales grew to EUR 2,597 (112/2005: 2,358) million with
EUR 697 (1012/2005: 622) million attributable to the fourth
quarter.
- Operating income from operations rose markedly to EUR 221.7
(112/2005: 179.4) million with EUR 57.7 (1012/2005: 52.7)
million attributable to the fourth quarter.
- Operating income including non-recurring capital gains rose
to EUR 239.5 (112/2005: 194.8) million. Operating income for fourth
quarter was EUR 57.9 (1012/2005: 66.4) million
- Cash flow from operating activities before financial items
and taxes was strong and totaled EUR 249.8 (112/2005: 194.1)
million.
- Net income for the reporting period amounted to EUR 166.1
(112/2005: 136.6) million.
- Earnings per share were EUR 2.57 (112/2005: 2.11).
- Board of Directors will propose at the Annual General Meeting
that a dividend of EUR 0.99 per each class A and EUR 1.00 per each
class B share be paid.
- Cargotecs market outlook for 2007 is positive. The high
market activity and strong order book in all business areas give a
good start for the year. Completed and targeted acquisitions will
support further sales growth. Operating income from operations in
2007 is expected to continue to increase although the operating
margin development will be slightly affected by planned
investments in future growth.
Cargotec Corporation has been listed on the Helsinki Stock
Exchange since June 1, 2005. The comparative figures presented in
this financial statements review for JanuaryDecember 2005 are
provided as additional information and are unaudited pro forma
figures. The comparative figures for JuneDecember 2005 are
audited figures based on Cargotecs first official financial
period. Year 2006 figures are audited.
Cargotecs President and CEO Mikael Mäkinen:
Year 2006 was prosperous for Cargotec. We continued successfully
our profitable growth. Our net sales grew by 10 percent to EUR
2.6 billion while our operating margin from operations improved
from 7.6% in the previous year to 8.5%. We continue to develop our
business to reach our new financial targets.
Analyst and Press Conference
An analyst and press conference (in Finnish) will be arranged on
January 30, 2007 at 2.00 p.m. Finnish time at Cargotecs head
office, Sörnäisten rantatie 23, Helsinki.
An international telephone conference for investors and analysts
will be held on the same day at 4 p.m. Finnish time. The
presentation material will be available on Cargotecs internet
pages by 2.00 p.m. Finnish time.
The conference call phone numbers are as follows:
+1 617 213 8845 (if calling from the U.S.)
+44 20 7365 8426 (if calling from rest of world)
Access code: Cargotec Corporation
The telephone conference can also be viewed as a live audio
webcast through the internet at www.cargotec.com, starting at 4.00
p.m. Finnish time. The archived webcast will be posted on the
internet pages later on the same day.
Sender:
Cargotec Corporation
Kari Heinistö Eeva Mäkelä
Senior Executive Vice President and CFO 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 is the worlds leading provider of cargo handling
solutions whose products are used in the different stages of
material flow in ships, ports, terminals, distribution centers and
local transportation. Cargotec Corporations brands, Hiab, Kalmar
and MacGREGOR, are market leaders in their fields and well-known
among customers all over the world. Cargotec's net sales are
EUR 2.6 billion. The company employs close to 9,000 people and operates
in approximately 160 countries. Cargotecs class B shares are quoted
on the Helsinki Stock Exchange.
www.cargotec.com
Business Environment
Hiabs load handling equipment markets were buoyant in 2006.
During the first half of the year, the markets were strong in
North America and Europe due to the lively demand for new trucks.
Demand was further boosted by customers preparing for new
requirements on equipment and tighter emission standards that
became effective during 2006. During the second half of the year,
demand for load handling equipment continued to be high in Europe
whereas in North America the markets leveled off, particularly
with respect to equipment used in building materials supply. In
Asia, the load handling equipment markets were stable and demand
grew towards the end of the year. Demand for maintenance and spare
parts was high in all geographical regions.
Demand was strong for Kalmars container handling equipment in
2006. In Europe and Asia, demand was high throughout the year and
began to strengthen in South America towards the end of the year.
Demand for reachstackers was record high and the markets for yard
cranes, straddle carriers and terminal tractors were also very
good. Demand for heavy industrial handling equipment continued to
be healthy. Services provided by Kalmar were in brisk demand in
all markets thanks to high port and terminal utilization rates and
customers continuing to outsource their service activities.
Demand for MacGREGOR marine cargo flow solutions was high in 2006.
The markets for hatch covers, ship cranes and cargo securing
equipment used in container ships and general cargo vessels were
buoyant as shipbuilding activities remained lively. Increased
orders for PCTCs (pure car and truck carriers) at shipyards were
reflected in high demand for the RoRo divisions solutions
throughout the year. Bulk handling equipment markets were strong.
Demand for MacGREGORs services was healthy.
Orders Received
Orders received by Cargotec in JanuaryDecember 2006 totaled EUR
2,910 (112/2005: 2,385) (612/2005: 1,366) million. Especially
significant was the growth in MacGREGORs orders received. A
considerable part of MacGREGORs orders will be delivered during
20082009. During the fourth quarter, orders received were EUR 716
(1012/2005: 591) million.
Pro Financial
forma period
Orders 10-12/2006 10-12/2005 1-12/2006 1-12/2005 6-12/2005
received, MEUR
Hiab 240.7 234.6 946.2 830.6 476.2
Kalmar 327.1 230.1 1,282.3 1,103.4 627.7
MacGREGOR 148.9 126.3 683.7 452.9 263.2
Internal orders -0.3 -0.4 -1.9 -2.0 -1.2
received
Total 716.4 590.6 2,910.3 2,384.9 1,365.9
Hiab
Hiabs orders accounted for EUR 946 (112/2005: 831) (612/2005:
476) million of the total orders received in 2006 while its share
of the orders received in OctoberDecember was EUR 241
(1012/2005: 235) million.
In December, Hiab signed a major service contract for load
handling equipment. This contract covers the servicing of Hiab
loader cranes and demountables in 548 Scania trucks used by the
Dutch army. The contracts duration with Scania is 13 years and it
is worth approximately EUR 30 million.
During the fourth quarter, Hiab secured an order for over 100
loader cranes from Thailand. These will be delivered to various
Thai municipalities during 2007.
In December, MAN ordered an additional 88 military-purpose loader
cranes for vehicles that will be delivered to the British Army.
During the second half of the year, Hiab received several major
orders for truck-mounted forklifts and loader cranes from its main
U.S. customers, further strengthening its market position in the
region.
In March, Hiab signed a cooperation agreement with the Suez
Environment (SITA) waste management company, making Hiab the
preferred pan-European supplier of demountables for SITA.
Kalmar
Kalmars orders accounted for EUR 1,282 (112/2005: 1,103)
(612/2005: 628) million of the total orders received in 2006
while its share of the orders received in OctoberDecember was EUR
327 (1012/2005: 230) million.
In December, Kalmar secured an order from Finnsteve for four ship-
to-shore (STS) cranes to the new Vuosaari port in Helsinki,
Finland. The cranes will be up and running by November 2008.
During the fourth quarter, Kalmar also received an order for 20
shuttle carriers from the United States and 13 E-One rubber-tired
gantry (RTG) cranes from South America. The shuttle carriers will
be delivered to APM Terminals new container terminal in
Portsmouth, Virginia during 2007. The RTGs will be delivered
during 2007 to the Peruvian terminal operator, Neptunia SA, to
Terminal Pacifico Sur Valparaiso in Chile and to the Port of
Trinidad and Tobago.
During the third quarter, Kalmar signed a five-year service
contract for 29 RTGs with Gateway Terminals India Pvt Ltd. This
contract covers maintenance, engineering support, daily
inspections and parts supply, among other things.
During the second quarter, Kalmar received an order for 12 E-One
RTGs from South African Port Operations (SAPO) for the port of
Durban. Deliveries will begin in the spring of 2007. The order was
a continuation to the January order of 25 straddle carriers.
During the first quarter, Kalmar received an order for 24 straddle
carriers from the Port Authority of Jamaica. Deliveries to
Kingston Container Terminal were finalized in mid-2006.
In January, Kalmar signed an agreement with HHLA for the delivery
of an automatic stacking crane system (ASC) and the related
technology for the Port of Hamburg. Kalmar will deliver 15 ASCs
and their control and automation systems during 20072008. The
contract includes an option to deliver an additional 75 ASCs and
their control and automation systems in the projects subsequent
phases.
MacGREGOR
MacGREGORs orders accounted for EUR 684 (112/2005: 453)
(612/2005: 263) million of the total orders received in 2006
while its share of the orders received in OctoberDecember was EUR
149 (1012/2005: 126) million.
In November, the Korean company, Daewoo Shipbuilding & Marine
Engineering, ordered MacGREGOR RoRo equipment for four of the
worlds largest PCTCs, which will be delivered to Wallenius
Wilhelmsen Logistics by the end of 2008. The order is worth
approximately EUR 15 million. The fourth quarter also saw
MacGREGOR securing orders for 84 ship cranes from various
shipyards in China. The cranes will be delivered during 20072009
for container vessels and multi-purpose vessels under
construction. The total value of the orders is approximately EUR
25 million.
During the third quarter, MacGREGOR secured orders for 55 ship
cranes, which will be delivered to Asia during 20072008. The
total value of the orders is approximately EUR 15 million. During
the same quarter, MacGREGOR also sold hatch covers for 12 bulk
ships that are under construction in a Japanese shipyard. The
hatch covers to be delivered are the first electronically-driven
covers developed by the company.
During the second quarter, MacGREGOR received hatch cover orders
from various European and Asian shipyards. During 20072009, the
company will deliver hatch covers for over 30 container ships
being built in various shipyards in Europe.
MacGREGOR also received a high number of orders for RoRo equipment
during the second quarter. The company will deliver RoRo equipment
for 10 vessels during 20062008, the total value of these orders
being approximately EUR 17 million. Other major orders included an
order for RoRo equipment for 53 pure car and truck carriers
(PCTCs). The equipment will be delivered to Shin Kurushima Group
in Japan and Hyundai Samho Heavy Industries shipyard in Korea
during 20072010. The total value of these orders is approximately
EUR 65 million.
During the first quarter, MacGREGOR secured several RoRo and hatch
cover orders. The company will deliver RoRo solutions for vessels
under construction for Norwegian Color Line during 20072008, the
order being worth approximately EUR 9 million. In March, MacGREGOR
received hatch cover orders from shipyards of the Korean Hyundai
Group. The hatch covers will be delivered for 34 container ships
during 20072008, the total value of the orders being
approximately USD 40 million. MacGREGOR also secured a hatch cover
order from the German shipyard JJ Sietas for four heavy lift cargo
ships ordered by the specialist operator, SAL.
In January, MacGREGOR received a major order for RoRo access
equipment for five multi-purpose RoRo ships for the Italian
shipowner, Grimaldi Group (Naples). The RoRo equipment, worth
approximately EUR 9 million, will be delivered in 20072009.
In the first quarter of 2006, MacGREGOR received a large number of
ship crane orders from various shipyards in Poland, China, Korea,
Singapore and Venezuela as well as from the U.S. Navy. The ship
crane deliveries take place during 20062008 and the value of the
orders is approximately EUR 15 million.
Order Book
Cargotecs order book grew by 29 percent in 2006 and totaled EUR
1,621 (December 31, 2005: 1,257) million on December 31, 2006,
Hiab accounting for EUR 215 (197) million, Kalmar for EUR 593
(520) million and MacGREGOR for EUR 813 (541) million. A
considerable part of MacGREGORs order book will be delivered in
20082009.
Order book, 31.12.2006 31.12.2005
MEUR
Hiab 215.4 196.7
Kalmar 592.7 519.5
MacGREGOR 812.6 540.9
Internal order -0.2 -0.2
book
Total 1,620.5 1,256.9
Net Sales
Cargotecs net sales grew by 10.1 percent in 2006 and totaled EUR
2,597 (112/2005: 2,358) (612/2005: 1,419) million. Growth
excluding the sales impact from acquisitions completed during the
year was 8.1 percent. Net sales for the fourth quarter reached a
record level at EUR 697 (1012/2005: 622) million despite certain
deliveries being pushed over the year-end. Hiabs net sales in the
fourth quarter amounted to EUR 239 (1012/2005: 231) million,
Kalmars net sales were EUR 321 (288) million and MacGREGORs net
sales EUR 138 (103) million.
Pro Financial
forma period
Sales, MEUR 10-12/2006 10-12/2005 1-12/2006 1-12/2005 6-12/2005
Hiab 238.9 231.0 913.8 844.4 504.6
Kalmar 320.5 288.2 1,203.3 1,146.9 695.0
MacGREGOR 138.2 103.1 481.7 368.7 220.4
Internal sales -0.4 -0.7 -1.7 -2.1 -1.4
Total 697.2 621.6 2,597.1 2,357.9 1,418.6
Cargotecs services business grew by 16 percent year on year with
revenue totaling EUR 572 (112/2005: 492) (612/2005: 300)
million, representing 22 percent of net sales. Hiabs services
business in 2006 represented 15 (13) percent of net sales, Kalmars 26
(23) percent, and MacGREGORs 27 (32) percent.
Financial Result
Cargotecs operating income from operations during 2006 improved
significantly and reached EUR 221.7 (112/2005: 179.4) (612/2005:
113.1) million, representing 8.5 (112/2005: 7.6) (612/2005: 8.0)
percent of net sales. Operating income from operations for the
fourth quarter was EUR 57.7 (1012/2005: 52.7) million, equal to
8.3 (8.5) percent of net sales. Hiab accounted for EUR 22.7 (20.1)
million of fourth quarter operating income from operations, Kalmar
for EUR 28.2 (27.0) million and MacGREGOR for EUR 9.7 (8.5)
million.
Including the EUR 17.8 million capital gain recorded in July, 2006
from the divestment of property Cargotecs operating income for
JanuaryDecember totaled EUR 239.5 million. The pro forma
operating income for JanuaryDecember 2005 was EUR 194.8
(612/2005: 124.6) million including a EUR 15.4 million one-time
capital gain from the sale of Consolis.
Net income for JanuaryDecember 2006 was EUR 166.1 (112/2005:
136.6) (612/2005: 87.4) million and earnings per share were EUR
2.57 (112/2005: 2.11) (612/2005: 1.35).
Balance Sheet, Financing and Cash Flow
At the end of December 2006, Cargotecs net working capital
amounted to EUR 209 (December 31, 2005: 206) million. Tangible
assets on the balance sheet were EUR 218 (196) million and
intangible assets EUR 581 (487) million.
Cash flow from operating activities before financial items and
taxes for JanuaryDecember 2006 was strong totaling EUR 249.8
(112/2005: 194.1) (612/2005: 173.7) million. In addition to the
good operative result cash flow was strengthened by prepayments
received on large contracts. The cash flow from operating
activities before financial items and taxes for OctoberDecember
amounted to EUR 71.0 (1012/2005: 78.5) million.
Return on equity for JanuaryDecember 2006 was 20.2 (112/2005:
19.2) (612/2005: 20.8) percent.
Net debt on December 31, 2006 was EUR 107 (December 31, 2005: 121)
million. Total equity/total assets ratio was 47.6 (46.2) percent
while gearing was 12.3 (15.7) percent.
Cargotec had EUR 432 million in committed credit facilities on
December 31, 2006. These facilities were unused. In order to
diversify its funding structure and finance its growth, Cargotec
placed a EUR 225 million private placement with U.S. institutional
investors in December 2006. 14 U.S. institutional investors
participated in the transaction. The placement carries maturities
ranging between 7 and 12 years and will be funded in February
2007.
New Products and Product Development
In 2006, Cargotec's research and development expenditure was EUR
31.3 (112/2005: 29.7) (612/2005: 17.5) million, representing 1.2
(112/2005: 1.3) (612/2005: 1.2) percent of net sales.
In the fourth quarter, Hiab founded a new, centralized product
development organization in order to better utilize and coordinate
its product development resources in its loader crane, forestry
crane and demountables product lines.
In 2006, Hiab launched 17 new products as a result of active
product development in all product lines. Hiab supplemented its
loader crane range by launching the HIAB XS 477, whose hoisting
capacity is 4044 tons, and expanded its remote control unit range
for loader cranes by introducing new models. Furthermore, the
company supplemented its XR hooklift systems range by launching
new XR 10 and XR 21 hooklifts. In North America and Europe, Hiab
complemented its truck-mounted forklift product line with a 4-way
travel model allowing easier delivery of loads in tight access
areas.
In Europe, Hiab presented a new tail lift with a hoisting capacity
of 450750 kilos. Hiab also supplemented its tail lifts range in
North America by launching a new rail-type liftgate, designed for
heavy use. The company also expanded its forestry crane range with
a new model designed for full tree harvesting. In the largest
volume category, Hiab introduced the new JONSERED J1080 forestry
crane that can be equipped with a digital control system. In the
fourth quarter, Hiab launched the JONSERED 1300 forestry crane,
which utilizes the XSDrive remote control unit developed for
loader cranes.
In 2006, Kalmar continued to invest in developing the automation
of its equipment. Kalmar launched the Fleetview fleet control
system which can be used to monitor straddle carriers,
reachstackers, forklift trucks, terminal tractors and RTGs.
Fleetview allows real-time monitoring of equipment, enabling the
assignment of container handling tasks to the nearest vacant
machine, thus shortening transportation distances and minimizing
unladen traveling distances.
Kalmar developed a new measuring system for the automatic stacking
cranes (ASCs) that it will deliver to HHLA. Thanks to the new
system, which combines camera and laser technology, the ASC
spreader identifies the container position from several angles,
enabling the container to be placed in the right position more
quickly and precisely.
In 2006, Kalmar launched a new, heavy forklift truck model as well
as a new RoRo terminal tractor equipped with a fully electronic
control system for the European and Asian markets. The terminal
tractor has longer service intervals and meets the latest
environmental regulations.
MacGREGOR developed electrically driven marine cargo handling
equipment in 2006. In the third quarter, the company introduced
electronic ship cranes, hatch covers, hatch cover stackers and
RoRo equipment representing the fruits of its several years of
extensive product development work. Electrically driven products
are environmentally-friendly, cost-efficient and easy to maintain.
Electrical operation also enables remote monitoring of the
equipment.
Capital Expenditure
Cargotecs capital expenditure for JanuaryDecember 2006,
excluding acquisitions and customer financing, totaled EUR 46.6
(112/2005: 28.2) (612/2005: 18.1) million. Customer financing
investments were EUR 22.2 (112/2005: 28.4) (612/2005: 21.3)
million.
In 2006, Hiab reorganized operations in several of its production
units. In April, the unit manufacturing Princeton PiggyBack®
forklifts in the United States moved to larger rented premises.
Hiab also extended its loader crane installation facilities in
Ohio, the United States. These were taken into use during the
second quarter of the year. In order to cut delivery times and
improve the flexibility of its loader crane assembly operations,
Hiab transferred part of its volume models assembly operations
from its Hudiksvall unit, Sweden, to Hiabs other European units
in Spain and in the Netherlands.
In Raisio, Finland, Hiab opened during the fourth quarter a new
unit where all Hiabs Finnish load handling equipment installation
activities where concentrated in. In order to improve the
flexibility of assembly operations, a new assembly line was taken
into use in the forestry and recycling crane assembly unit in
Salo, Finland. At the demountables unit in Raisio, Finland, Hiab
introduced a new paintshop.
In the second quarter, Hiab entered into a license-based
cooperation agreement with Combilift of Ireland, giving Hiab the
right to manufacture and sell the new Telemount truck-mounted
forklift. The manufacture of these forklifts was integrated with
the operations of Hiabs unit in Ireland during 2006.
In the first quarter of 2006, Kalmar established a sales company,
Kalmar Industries South Africa (Pty) Ltd, in Durban. This company
will focus on the sales and servicing of straddle carriers and RTG
cranes in South Africa.
Kalmar organized its global assembly network during 2006 by
establishing the Multi Assembly Unit organization. Under this new
model, the plants focus on assembly of products while the product
lines focus on product design, marketing and sales. In line with
the new operating model, the operations of two assembly plants in
Southern Sweden were combined. In Kansas, the United States,
Kalmar outsourced its terminal tractor and forklift truck
production. In the future, the unit will focus solely on assembly.
In 2006, Kalmar opened a new assembly plant for terminal tractors,
rubber-tired gantry (RTG) cranes, reachstackers and empty
container handling equipment in the Shanghai area, China, to cater
for the needs of its Asian customers.
In the spring, MacGREGOR sold its office and workshop building in
Örnsköldsvik, Sweden and will move its ship crane business to new,
rented premises in April 2007.
In the fourth quarter, MacGREGOR signed a contract with the
Chinese company, Goodway, on hatch cover production for conversion
and modernization projects. This will further strengthen
MacGREGORs expertise in hatch cover design for conversion
projects.
Strategic Acquisitions
During the year, Cargotec carried out eight acquisitions to expand
the operations of all business areas.
At the end of December, Kalmar made an agreement to acquire the
Italian company CVS Ferrari Group. This acquisition will
strengthen Kalmars market position and service capabilities in
the South European and other Mediterranean markets. CVS Ferrari
employs some 305 people. The agreement signed is subject to
competition authority approval.
In December, Kalmar also signed an agreement to acquire the
majority of the shares of its Spanish distributor, Kalmar Espana
S.A. The company employs six people. This transaction is subject
to competition authority approval.
September saw the signature of an agreement for acquiring
Catracom, based in Belgium, which has been distributing Kalmar
equipment since 1985. The company employs approximately 100
people. The acquisition was finalized in November.
In September, Kalmar also signed an agreement to acquire the
Kalmar equipment related service business of African National
Engineering (ANE), based in South Africa. ANEs service business
was merged with Kalmars local subsidiary that focuses on the
sales and servicing of straddle carriers, RTGs and terminal
tractors.
In August, MacGREGOR signed an agreement to acquire the business
of Scottish Grampian Hydraulics. The acquiree specializes in
hydraulics and spare part servicing of offshore support vessels in
the North Sea. The company employs approximately 30 people.
Grampian Hydraulics has been integrated in MacGREGORs accounts
since August 14, 2006.
In June, MacGREGOR signed an agreement to acquire BMH Marine AB, a
Swedish company. The acquisition was finalized at the end of July
with a debt-free transaction price of approximately EUR 32
million. BMH Marine specializes in dry bulk handling equipment on
ships and at port terminals, and expands MacGREGORs service
business offering for these products. The company employs
approximately 140 people.
In March, Kalmar acquired the operations of East Coast Cranes and
Electrical Contracting Inc. (ECC), a U.S. company. ECC specializes
in crane construction services and maintenance in ports. The
company employs over 100 people.
In January, Hiab signed an agreement to acquire the Dutch tail
lift producer, AMA. The acquisition was finalized in April. AMA
consists of a manufacturing company based in Poland and a sales
company based in Holland. The company employs approximately 55
people.
Changes in Cargotecs Executive Board
On February 8, 2006, Cargotecs Board of Directors appointed
Mikael Mäkinen, M.Sc. (Eng.) Naval Architect, as the new President
and CEO of Cargotec Corporation. Mäkinen joined Cargotec on April
1, 2006 and became President and CEO on May 1, 2006. Cargotecs
previous President and CEO, Carl-Gustaf Bergström, retired in June
2006 and started as a member of the Board from May 1, 2006.
In September, Cargotec appointed two new members onto its
Executive Board (previously Executive Committee). Harald de Graaf,
B.Sc. (Eng.), was appointed Senior Vice President, Services. Matti
Sommarberg, M.Sc. (Eng.) and M.Sc. (Econ.), was appointed Senior
Vice President, Operations Development. These appointments took
effect on November 1, 2006.
In October, Kirsi Nuotto, MA, was appointed Senior Vice President,
Human Resources, and a member of the Executive Board. She is
responsible for the corporate global human resources strategy and
development. The appointment took effect on November 20, 2006.
In June, Olli Isotalo, M.Sc. (Eng.), was appointed President of
MacGREGOR, starting from September 15, 2006 after Hans Pettersson,
MacGREGORs previous President, joined another company.
Tor-Erik Sandelin, Senior Vice President responsible for
Cargotecs Service Business Development, retired at the end of
March 2006.
Priorities in Strategy Implementation
Cargotecs strategy is based on profitable growth in developing
and consolidating markets. The company aims to grow its operations
significantly. The focus is on expanding the business especially
in Asia Pacific and Americas. In addition to organic growth
Cargotec intends to grow through acquisitions. Acquisitions help
to accelerate the expansion in new markets as well as develop the
existing service network. Cargotec aims to strengthen its global
market leadership in cargo handling solutions.
Within services the target is a leading position. Cargotec intends
through new solutions and a stronger presence in key service
points to offer its customers necessary support services for the
life-cycle of their equipment.
Cargotecs way of working will be changed in order to achieve
better utilization of common know-how and benefits of scale in
technology development and global network.
Achievement of the growth target will require more investment in
personnel development than previously. Therefore, personnel have
been lifted into a strategic priority.
The Executive Board has been strengthened in the strategic
priorities of services, personnel and utilization of common
network and technologies.
Employees
On December 31, 2006, Cargotec had a total of 8,516 employees (Dec
31, 2005: 7,571), with Hiab accounting for 3,647 (3,417) persons,
Kalmar 3,705 (3,210), and MacGREGOR 1,117 (899). Group level
functions employed 47 (45) persons on December 31, 2006. During
the financial period, Cargotecs average number of employees was
8,026.
During 2006 the Groups sourcing organization, mergers and
acquisitions expertise as well as IT management was strengthened.
Process harmonization is an important part of the strategy
implementation.
Of Cargotecs total number of employees, 17 percent were located
in Finland, 26 percent in Sweden, and 27 percent in other parts of
Europe, Middle East and Africa. North and South American personnel
represented 14 percent, Asia Pacific 14 percent, and the rest of the
world 2 percent of people in total.
Business areas launched a variety of training programs during the
year: Hiab initiated a training program for young future talents,
and Kalmar started the Leading the Move program, promoting e.g.
the employees knowledge of strategy.
During the financial period, salaries and remunerations to
employees totaled EUR 300 (1-12/2005: 281) (612/2005: 162) million.
Environment
Cargotecs environmental policy defines the operating principles
for environmental issues. The environmental effects of Cargotecs
manufacturing operations are not significant, since Cargotec is
increasingly focusing on product development, design, assembly and
service operations.
Cargotec products main environmental effects are related to their
use. The recyclability of most of Cargotecs 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 during
use and extends its useful life.
The ISO 9001 and ISO 14001 certified quality and environmental
systems provide the foundation for environment management at
Cargotec. Cargotec aims to implement certified environmental
systems at all production sites. Four of Kalmars seven production
units and seven of Hiabs thirteen production units have an ISO
14001 certified environmental system. MacGREGOR has no production
of its own at all, but commissions its products from selected
subcontractors independently responsible for their production
processes. Certification is planned for two Hiab units and three
Kalmar units in 2007. Following this, certified environment
systems will cover the majority of all Cargotec production units.
Risks and Risk Management
Cargotecs President and CEO and the Executive Board are
responsible for the Groups risk management activities, their
implementation and control, and report to the Board of Directors.
The companys internal auditor, responsible for internal control
and business risk auditing, reports to the Boards Audit
Committee. The Groups Risk Management function creates and
develops Group-wide risk management principles and operating
models, and supports their application and implementation in the
business areas and units. The Treasury function manages financial
risks centrally. The business areas and units are responsible for
managing the risks involved in their own operations.
Strategic and business risks are related to business cycles in the
global economy and Cargotecs customer industries, the
availability and price development of raw materials and
components, and dealers and subcontractors activities. Cargotec
has prepared for these risks by attempting to identify and
anticipate them in advance, making long-term procurement
agreements, and seeking alternative suppliers. In order to develop
its risk assessments further, Cargotec implemented a Group-wide
analysis in 2006 to identify and evaluate supplier risks. As a
result of this analysis, Cargotec was able to identify its
critical suppliers and will determine measures for managing its
supplier and business interruption risks. Moreover, the Group has
further specified the scope and content of supplier audits by
placing increased emphasis on risk management matters and
safeguarding the continuity of operations.
Cargotecs treasury operations and financial risk management
principles are defined in the Group Treasury Policy. The companys
financial risks are centrally managed and administered by the
Group Treasury that draws up financial risk reports for the Group
management on a regular basis. The financial risks involved in
Cargotecs 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.
Cargotecs operational risks and hazard risks relate to persons,
property, processes, products and IT. If these risks materialize,
they cause damage to persons and property, or business
interruptions or product liability. In order to manage these
risks, Cargotec has drawn up a program whose main activities are
directed at product safety, information security development and
business continuity assurance. With respect to key person risks,
Cargotec draws up Group-wide succession plans for leadership and
key assignments. Responsibility for the management of key
operational risks and hazard risks lies with the Groups risk
management function in particular, alongside business area and
unit management.
Cargotecs 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 Group-
wide insurance policies that cover all units.
Shares and Share Capital
Cargotecs class B shares are listed on the Helsinki Stock
Exchange. Cargotecs share capital was EUR 64,046,460 on December
31, 2006 (EUR 63,920,955 on December 31, 2005). The share capital
increased by EUR 125,505 during the report period as a result of
the subscription for class B shares under Cargotec option rights.
On December 31, 2006, Cargotecs share capital comprised
54,520,371 (December 31, 2005: 54,394,866) class B shares listed
on the Helsinki Stock Exchange, and 9,526,089 (9,526,089) unlisted
class A shares. Class B shares accounted for 85.1 (85.1) percent
of the total number of shares and 36.4 (36.3) percent of votes,
while class A shares accounted for 14.9 (14.9) percent of the
total number of shares and 63.6 (63.7) percent of votes. The total
number of votes attached to all shares was 14,977,375 (14,964,826)
at the year end.
Market Capitalization and Trading
The share price of Cargotecs class B share increased by 44
percent during the year, with the class B share closing at the
Helsinki Stock Exchange at EUR 42.10 on December 31, 2006. The
average share price for the financial period was EUR 34.62, the
highest quotation being EUR 43.50 and the lowest EUR 28.84.
On December 31, 2006, the total market value of the companys
class B shares was EUR 2.3 billion, excluding treasury shares held
by the company. The companys year-end market capitalization, in
which the unlisted class A shares were valued at the average price
of the class B shares on the last trading day, was EUR 2.7
billion, excluding treasury shares held by the company. At the
year end, the company held a total of 704,725 class B shares.
During the financial period, approximately 52.9 million Cargotec
class B shares were traded on the Helsinki Stock Exchange,
corresponding to a turnover of approximately EUR 1,829 million.
The average daily trading volume was 210,795 shares or EUR
7,285,529 while the relative turnover for the period was 97.6
percent.
Shares Subscribed for under the Option Rights
At the beginning of the financial period the number of 2005A and 2005B
option rights were 54,555 and 108,130 respectively. 125,505 class B
shares were subscribed for during the period, increasing the share capital by
EUR 125,505.
The remaining Cargotec 2005A and 2005B option rights entitle the
holder to the subscription of a total of 362,550 class B shares in
Cargotec and an increase of EUR 362,550 in the share capital. The
said number of shares that can be subscribed for under the
remaining option rights constitutes 0.6 percent of Cargotecs
total number of shares and 0.24 percent of the total number of
votes. The company has not issued other option rights or
convertible bonds.
Decisions Taken at the Annual General Meeting on February 28, 2006
Cargotec Corporations Annual General Meeting (AGM) was held on
February 28, 2006 in Helsinki. The meeting approved the parent
company and consolidated financial statements and discharged the
members of the Board of Directors and the President and CEO of
their liability for the accounting period June 1December 31,
2005.
The AGM approved a dividend for 2005 of EUR 0.64 for each of the
9,526,089 class A shares and EUR 0.65 for the 54,191,166 class B
shares that were outstanding.
The number of members of the Board of Directors was confirmed at
six according to the proposal of Cargotecs Nomination and
Compensation Committee. Henrik Ehrnrooth, Tapio Hakakari, Ilkka
Herlin, Peter Immonen and Karri Kaitue were re-elected as full
members of the Board of Directors. Carl-Gustaf Bergström was
elected as a member of the Board from May 1, 2006.
Authorized public accountants Johan Kronberg and
PricewaterhouseCoopers Oy were elected as auditors according to
the proposal of the Audit Committee of Cargotecs Board of
Directors.
Organization of the Board of Directors
In its organizing meeting, Cargotecs Board of Directors elected
Ilkka Herlin to continue as Chairman of the Board and Henrik
Ehrnrooth to continue as Deputy Chairman. Kari Heinistö, Senior
Executive Vice President and CFO, continued to act as secretary to
the Board of Directors.
The Board of Directors elected from among its members Ilkka
Herlin, Peter Immonen and Karri Kaitue as members of the Audit
Committee, with Karri Kaitue elected to continue as Chairman of
the Committee.
Board members Carl-Gustaf Bergström (as of May 1, 2006), Tapio
Hakakari, Ilkka Herlin and Peter Immonen were elected to the
Nomination and Compensation Committee. Ilkka Herlin was elected to
continue as Chairman of the Committee.
The Board of Directors also reviewed the independence of its
members as defined in the corporate governance recommendation of
the Helsinki Stock Exchange. The Board of Directors stated that,
with the exception of Carl-Gustaf Bergström, its members are
independent of the company and, with the exception of Ilkka
Herlin, independent of major shareholders in the company.
Authorizations Granted by the Annual General Meeting and Share
Repurchases
The Annual General Meeting held in February 28, 2006 authorized
the Board of Directors of Cargotec to decide to repurchase the
Companys own shares using distributable assets. Own shares can be
repurchased in order to develop the capital structure of the
Company, finance or carry out possible acquisitions, implement the
Companys share-based incentive plans, or to be transferred for
other purposes or be cancelled. The maximum amount of repurchased
own shares shall be less than ten percent of the Companys share
capital and total voting rights. This corresponds to a maximum of
6,391,000 shares of which no more than 952,000 are class A shares
and 5,439,000 are class B shares. This authorization remains in
effect for a period of one year from the date of decision of the
Annual General Meeting.
Based on the above-mentioned authorization, Cargotec repurchased
501,025 class B shares at the market price in public trading on
the Helsinki Stock Exchange during the period June 14November 22,
2006 at an average purchase price of EUR 37.61 per share. In June,
1,025 shares were acquired at an average purchase price of EUR
28.93 per share and in November, 500,000 shares averaging EUR
37.63 per share. During the period, the total accounting par value
of the repurchased shares was EUR 501,025, their share of the
share capital was 0.78 percent, and their share of the total
voting rights was 0.33 percent. The repurchased shares were in the
companys possession on December 31, 2006. With regard to the
authorization, the amount corresponding to 952,000 class A shares
and 4,937,975 class B shares remained unused on December 31, 2006.
On December 31, 2006, the company held a total of 704,725 class B
shares, accounting for 1.10 percent of the share capital and 0.47
percent of the total voting rights of all shares. The total
accounting par value of the shares was EUR 704,725. Repurchasing
of shares had no significant impact on the division of ownership
and voting rights in the company.
In addition, the Annual General Meeting authorized Cargotecs
Board of Directors to decide to distribute any shares repurchased.
The repurchased shares may be used as compensation in acquisitions
and in other arrangements as well as to implement the Companys
share-based incentive plans in the manner and to the extent
decided by the Board of Directors. The Board of Directors also has
the right to decide on the distribution of the shares in public
trading in the Helsinki Stock Exchange to be used as compensation
in possible acquisitions. The authorization is limited to a
maximum of 952,000 class A shares and 5,439,000 class B shares
repurchased by the Company. The Board of Directors was authorized
to decide to whom and in which order the repurchased shares will
be distributed. This authorization remains in effect for a period
of one year from the date of the decision of the Annual General
Meeting. The authorization remained unused on December 31, 2006.
At the end of the financial year, Cargotecs Board of Directors
had no current authorization to issue shares, grant option rights,
raise the share capital, or issue convertible bonds or warrant
loans. Neither has the company decided to issue shares, option
rights, or convertible bonds during the financial period.
Events after the Financial Period
Cargotec Corporations Board of Directors decided in January 2007
on new financial targets for the Company. The targets for Cargotec
have been set based on the strategy for the years 20072011. The
targets reflect the growth expectations of Cargotecs industry as
well as actions that have been implemented or that will be
implemented by the Company. The new financial targets are annual
net sales growth exceeding 10 percent (including acquisitions),
raising the operating income margin to 10 percent and gearing
below 50 percent.
In January 2007 Cargotec Corporations Board of Directors decided
also on a new share-based incentive program for Cargotecs key
managers for the period 20072011. The program offers key managers
a possibility to earn a reward in Cargotec class B shares based on
accomplishment of set targets. The incentive program consists of
four earnings periods, of which the first is two years and the
following three periods one year each. The maximum amount to be
paid out as shares is 387,500 class B shares currently held by the
company as treasury shares. The incentive program covers some 60
individuals.
Board of Directors Proposal on the Distribution of Profit
The parent companys distributable equity on December 31, 2006 is
EUR 905,013,988.83 of which net income for the period is EUR
88,568,655.38.
The Board of Directors will propose to the Annual General meeting
convening on February 26, 2007, that of the distributable profit,
a dividend of EUR 0.99 per each of the 9,526,089 class A shares
and EUR 1.00 per each 53,815,646 class B share in circulation be
paid, totaling EUR 63,246,474.11. The rest of the distributable
equity, EUR 841,767,514.72, will be retained and carried forward.
No significant changes have occurred in the companys financial
position after the end of the financial year. The companys
liquidity is good, and in the Board of Directors view the
proposed distribution of dividend does not risk the companys
financial standing.
Outlook
Cargotecs market outlook for 2007 is positive. The high market
activity and strong order book in all business areas give a good
start for the year. Completed and targeted acquisitions will
support further sales growth. Operating income from operations in
2007 is expected to continue to increase although the operating
margin development will be slightly affected by planned
investments in future growth.
Annual General Meeting
Cargotec Corporations Annual General Meeting will be held at the
Marina Congress Center in Helsinki on Monday, February 26, 2007 at
3.00 p.m.
Helsinki, January 30, 2007
Cargotec Corporation
Board of Directors
CARGOTEC FINANCIAL STATEMENTS REVIEW JANUARY-DECEMBER 2006
CONSOLIDATED INCOME STATEMENT
Pro
forma
MEUR 1-12/2006 % 6-12/2005 % 1-12/2005 %
Sales 2,597.1 1,418.6 2,357.9
Cost of goods sold -2,042.7 -1,133.7 -1,882.2
Gross profit 554.4 21.3 284.9 20.1 475.7 20.2
Capital gains 17.8 15.4 15.4
Other operating 22.7 13.7 19.3
income
Selling and marketing -168.1 -88.6 -150.9
expenses
Research and -31.3 -17.5 -29.7
development expenses
Administration -136.6 -73.2 -118.9
expenses
Other operating -19.4 -10.1 -16.1
expenses
Operating income 239.5 9.2 124.6 8.8 194.8 8.3
Share of associated 0.9 6.3 6.6
companies' net income
Financing income 3.6 4.6 6.9
Financing expenses -12.0 -10.0 -17.3
Income before taxes 232.0 8.9 125.5 8.8 191.0 8.1
Taxes -65.9 -38.1 -54.4
Net income for the 166.1 6.4 87.4 6.2 136.6 5.8
period
Net income for the
period attributable
to:
Equity holders of the 163.9 85.9 134.5
Company
Minority interest 2.2 1.5 2.1
Total 166.1 87.4 136.6
Earnings per share for profit
attributable to the
equity holders of the
Company:
Basic earnings per 2.57 1.35 2.11
share, EUR
Diluted earnings per 2.56 1.34 2.10
share, EUR
Adjusted basic 2.37 * 1.18 ** 1.90 ***
earnings per share,
EUR
*) Excluding gain on the sale of property after taxes
**) Excluding gain on the sale of Consolis and impact of the final
accounting of MacGREGOR acquisition after taxes
***) Excluding gain on the sale of Consolis after taxes
CONSOLIDATED BALANCE SHEET
MEUR 31.12.2006 31.12.2005
ASSETS
Non-current assets
Goodwill 513.3 440.7
Other intangible assets 67.2 46.4
Property, plant and equipment 217.6 196.3
Investments in associated 2.4 1.6
companies
Available-for-sale investments 1.6 1.1
Loans receivable and other 0.1 0.9
interest-bearing assets 1)
Deferred tax assets 50.7 50.7
Other non-interest-bearing 7.9 4.1
assets
Total non-current assets 860.8 741.8
Current assets
Inventories 528.9 464.4
Loans receivable and other 0.3 0.3
interest-bearing assets 1)
Income tax receivables 7.0 8.2
Accounts receivable and other 466.7 451.3
non-interest-bearing assets
Cash and cash equivalents 1) 124.3 114.5
Total current assets 1,127.2 1,038.7
Total assets 1,988.0 1,780.5
1) Included in interest-bearing net debt
MEUR 31.12.2006 31.12.2005
EQUITY AND LIABILITIES
Equity attributable to
the equity holders of the Company
Share capital 64.0 63.9
Share premium account 96.0 95.1
Treasury shares -23.9 -5.0
Translation differences -12.0 4.9
Fair value reserves 10.5 -10.3
Retained earnings 734.2 611.4
Total shareholders' equity 868.8 760.0
Minority interest 8.0 7.2
Total equity 876.8 767.2
Non-current liabilities
Loans 1) 195.0 197.1
Deferred tax liabilities 30.5 18.5
Pension obligations 36.2 35.1
Provisions 30.3 18.2
Other non-interest-bearing 19.0 18.1
liabilities
Total non-current liabilities 311.0 287.0
Current liabilities
Current portion of long-term 4.8 21.8
loans 1)
Other interest-bearing 32.4 17.3
liabilities 1)
Provisions 42.6 45.9
Income tax payables 39.5 18.4
Accounts payable and other non- 680.9 622.9
interest-bearing liabilties
Total current liabilities 800.2 726.3
Total equity and liabilities 1,988.0 1,780.5
1) Included in interest-bearing net debt
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Attributable to the equity holders of the
Company
MEUR Share Share Trea- Trans- Fair Re- Total Mino- Total
capital pre- sury lation value tained rity equity
mium shares diffe- reser- earn- inte-
account rences ves ings rest
Equity on 63.8 93.8 - - -12.8 525.7 670.5 6.2 676.7
1.6.2005
IFRS 3: -1.1 -1.1 -1.1
Impact of
the final
accounting
of
acquisitions
Equity on 63.8 93.8 - - -12.8 524.6 669.4 6.2 675.6
1.6.2005,
adjusted
Cash flow 2.5 2.5 2.5
hedges
Translation 4.9 4.9 0.4 5.3
differences
Share- 0.9 0.9 0.9
based
incentives,
value of
received
services
Net income - - - 4.9 2.5 0.9 8.3 0.4 8.7
recognized
directly
in equity
Net income 85.9 85.9 1.5 87.4
for the
period
Total - - - 4.9 2.5 86.8 94.2 1.9 96.1
recognized
income and
expenses
for the
period
Shares 0.1 1.3 1.4 1.4
subscribed
with
options
Acquisition -5.0 -5.0 -5.0
of
treasury
shares
Other - -0.9 -0.9
changes
Equity on 63.9 95.1 -5.0 4.9 -10.3 611.4 760.0 7.2 767.2
31.12.2005
Gain/loss 32.1 32.1 0.0 32.1
on cash
flow
hedges
booked to
equity
Gain/loss -11.3 -11.3 -11.3
on cash
flow
hedges
transferred
to IS
Translation -16.9 -16.9 -0.8 -17.7
differences
Share- 0.1 0.1 0.1
based
incentives,
value of
received
services
Net income - - - -16.9 20.8 0.1 4.0 -0.8 3.2
recognized
directly
in equity
Net income 163.9 163.9 2.2 166.1
for the
period
Total - - - -16.9 20.8 164.0 167.9 1.4 169.3
recognized
income and
expenses
for the
period
Dividends -41.3 -41.3 -41.3
paid
Shares 0.1 0.9 1.1 1.1
subscribed
with
options
Acquisition -18.9 -18.9 -18.9
of
treasury
shares
Other - -0.6 -0.6
changes
Equity on 64.0 96.0 -23.9 -12.0 10.5 734.2 868.8 8.0 876.8
31.12.2006
CONSOLIDATED CASH FLOW STATEMENT
MEUR 1-12/2006 6-12/2005
Net income for the period 166.1 87.4
Depreciation 40.5 23.6
Gain on disposals -17.8 -15.4
Financing items and taxes 74.3 15.4
Change in receivables 18.0 7.3
Change in payables 18.2 90.5
Change in inventories -48.9 -32.9
Other adjustments -0.6 -2.2
Cash flow from operations 249.8 173.7
Interest received 5.4 2.9
Interest paid -11.5 -6.4
Dividends received 0.0 0.0
Other financial items -1.7 0.2
Income taxes paid -43.3 -12.1
Cash flow from operating 198.7 158.3
activities
Capital expenditure -69.3 -37.1
Proceeds from sales of fixed 41.7 7.9
assets
Acquisitions, net of cash -89.1 -8.8
Proceeds from divested 0.0 0.5
operations, net of cash
Proceeds from sales of - 81.7
shares in associated
companies
Net change in loans 0.9 0.7
receivable
Cash flow from investing -115.8 44.9
activities
Cash flow after investing 82.9 203.2
activities
Change in current creditors, 8.3 -239.9
net
Proceeds from long-term 0.1 114.7
borrowings
Repayments of long-term -25.9 -18.6
borrowings
Acquisition of treasury -18.9 -5.0
shares
Proceeds from share 1.1 1.4
subscriptions
Dividends paid -41.3 -0.2
Cash flow from financing -76.6 -147.6
activities
Change in cash 6.3 55.6
Cash and cash equivalents at 111.2 55.5
the beginning of period
Translation difference -3.0 0.1
Cash and cash equivalents at 114.5 111.2
the end of period
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
Pro forma
MEUR 1-12/2006 6-12/2005 1-12/2005
Net income for the period 166.1 87.4 136.6
Gain on disposals -17.8 -15.4 -15.4
Depreciation 40.5 23.6 37.9
Other adjustments 73.7 37.2 58.2
Change in working capital -12.7 40.9 -23.2
Cash flow from operations 249.8 173.7 194.1
Cash flow from financial -51.1 -15.4 -38.7
items and taxes
Cash flow from operating 198.7 158.3 155.4
activities
Proceeds from disposals - 81.7 81.7
The gain on the sale of 31.3 - -
property
Cash flow from other -147.1 -36.8 -72.4
investing activities
Cash flow from investing -115.8 44.9 9.3
activities
Acquisition of treasury -18.9 -5.0 -5.0
shares
Proceeds from share 1.1 1.4 1.4
subscriptions
Dividends paid -41.3 -0.2 -0.2
Net change in loans, pro - - -96.0
forma
Proceed from long-term 0.1 114.7 -
borrowing
Repayments of long-term -25.9 -18.6 -
borrowings
Change in current 8.3 -239.9 -
creditors, net
Cash flow from financing -76.6 -147.6 -99.8
activities
Change in cash 6.3 55.6 64.9
Cash and cash equivalents 111.2 55.5 46.3
at the beginning of period
Translation difference -3.0 0.1 0.0
Cash and cash equivalents 114.5 111.2 111.2
at the end of period
KEY FIGURES Pro forma
1-12/2006 6-12/2005 1-12/2005
Equity/share EUR 13.72 11.93 11.93
Interest-bearing net MEUR 107.5 120.5 120.5
debt
Total equity/total % 47.6 46.2 46.2
assets
Gearing % 12.3 15.7 15.7
Return on equity % 20.2 20.8 19.2
Return on capital % 23.1 21.9 20.9
employed
SEGMENT REPORTING
Pro forma
Sales by geographical 1-12/2006 6-12/2005 1-12/2005
segment, MEUR
EMEA 1,368.0 789.5 1,334.8
Americas 719.9 403.9 619.7
Asia Pacific 509.2 225.2 403.4
Total 2,597.1 1,418.6 2,357.9
Pro forma
Sales by geographical 1-12/2006 6-12/2005 1-12/2005
segment, %
EMEA 52.7 % 55.7 % 56.6 %
Americas 27.7 % 28.5 % 26.3 %
Asia Pacific 19.6 % 15.9 % 17.1 %
Total 100.0 % 100.0 % 100.0 %
Pro forma
Sales, MEUR 1-12/2006 6-12/2005 1-12/2005
Hiab 913.8 504.6 844.4
Kalmar 1,203.3 695.0 1,146.9
MacGREGOR 481.7 220.4 368.7
Internal sales -1.7 -1.4 -2.1
Total 2,597.1 1,418.6 2,357.9
Pro forma
Operating income, 1-12/2006 6-12/2005 1-12/2005
MEUR
Hiab 86.0 40.0 66.6
Kalmar 111.7 62.1 97.6
MacGREGOR 35.9 18.5 27.5
Corporate -11.9 -7.5 -12.3
administration and
other
Operating income from 221.7 113.1 179.4
operations
Gain on the sale of - 15.4 15.4
Consolis
Gain on the sale of 17.8 - -
property
MacGREGOR acquisition - -3.9 -
adjustment *
Total 239.5 124.6 194.8
*) Impact of the final accounting
Pro forma
Operating income, % 1-12/2006 6-12/2005 1-12/2005
Hiab 9.4 % 7.9 % 7.9 %
Kalmar 9.3 % 8.9 % 8.5 %
MacGREGOR 7.5 % 8.4 % 7.5 %
Cargotec, operating 8.5 % 8.0 % 7.6 %
income from
operations
Cargotec 9.2 % 8.8 % 8.3 %
Pro forma
Orders received, MEUR 1-12/2006 6-12/2005 1-12/2005
Hiab 946.2 476.2 830.6
Kalmar 1,282.3 627.7 1,103.4
MacGREGOR 683.7 263.2 452.9
Internal orders -1.9 -1.2 -2.0
received
Total 2,910.3 1,365.9 2,384.9
Order book, MEUR 31.12.2006 31.12.2005
Hiab 215.4 196.7
Kalmar 592.7 519.5
MacGREGOR 812.6 540.9
Internal order book -0.2 -0.2
Total 1,620.5 1,256.9
Pro forma
Capital expenditure, 1-12/2006 6-12/2005 1-12/2005
MEUR
In fixed assets 46.1 17.8 27.4
(excluding
acquisitions)
In leasing agreements 0.5 0.3 0.8
In customer financing 22.2 21.3 28.4
Total 68.8 39.4 56.6
Pro forma
Expenditure for R&D 1-12/2006 6-12/2005 1-12/2005
Expenditure for R&D, 31.3 17.5 29.7
MEUR
Expenditure for R&D, 1.2 1.2 1.3
as percentage of
sales
Number of employees 31.12.2006 31.12.2005
at the end of period
Hiab 3,647 3,417
Kalmar 3,705 3,210
MacGREGOR 1,117 899
Corporate 47 45
administration
Total 8,516 7,571
Pro forma
Average number of 1-12/2006 6-12/2005 1-12/2005
employees
Hiab 3,571 3,418 3,426
Kalmar 3,415 3,092 3,021
MacGREGOR 994 891 899
Corporate 46 45 42
administration
Total 8,026 7,446 7,388
NOTES
Commitments
MEUR 31.12.2006 31.12.2005
Guarantees 0.5 1.2
Customer finance 15.2 17.7
Operating leases 38.1 29.5
Other contingent liabilities 3.9 4.1
Total 57.7 52.5
Cargotec leases property, plant and equipment under non-
cancellable operating leases. The leases have varying terms and renewal
rights.
The future minimum lease payments under non-cancellable operating
leases
MEUR 31.12.2006 31.12.2005
Less than 1 year 11.9 9.4
1-5 years 22.2 19.0
Over 5 years 4.0 1.1
Total 38.1 29.5
The aggregate operating lease expenses totaled EUR 11.1
(1.6.-31.12.2005: 6.0) million.
Customer finance commitments
MEUR 31.12.2006 31.12.2005
Dealer financing 8.5 9.9
End customer financing 6.7 7.8
Total 15.2 17.7
It is not anticipated that any material liabilities will arise
from customer finance commitments.
Fair values of
derivative financial
instruments
Positive Negative Net fair Net fair
fair fair value value
value value
MEUR 31.12.2006 31.12.2006 31.12.2006 31.12.2005
FX forward contracts, 27.1 8.5 18.6 -14.4
cash flow hedges
FX forward contracts, 0.2 9.3 -9.1 -0.2
non-hedge accounted
Interest rate swaps, - 0.0 0.0 -0.7
non-hedge accounted
Cross currency and 0.3 1.0 -0.7 -
interest rate swaps,
cash flow hedges
Total 27.6 18.8 8.8 -15.3
Non-current portion:
FX forward contracts, 4.8 2.1 2.7 -3.5
cash flow hedges
Cross currency and 0.3 1.0 -0.7 -
interest rate swaps,
cash flow hedges
Non-current portion 5.1 3.1 2.0 -3.5
Current portion 22.5 15.7 6.8 -11.8
Nominal values of derivative
financial instruments
MEUR 31.12.2006 31.12.2005
FX forward contracts 1,752.7 1,349.5
Interest rate swaps 10.0 45.0
Cross currency and interest 225.7 -
rate swaps
Total 1,988.4 1,394.5
Accounting principles:
Cargotec Corporations consolidated financial statements have been
prepared according to the International Financial Reporting
Standards (IFRS) approved by the European Union. Cargotec has
applied the following new and amended standards and
interpretations as of January 1, 2006:
- IAS 19 (amendment), Employee Benefits - Actuarial Gains and
Losses, Group Plans and Disclosure
- IAS 21 (amendment), The Effects of Changes in Foreign Exchange
Rates - Net Investment in a Foreign Operation
- IAS 39 (amendment), Financial Instruments: Recognition and
Measurement - Cash Flow Hedge Accounting of Forecast Intragroup
Transactions
- IFRIC 4, Determining whether an arrangement contains a lease
Cargotec has not applied the following renewed standards and
interpretations, as they are of no relevance to the Group
operations.
- IAS 39 (amendment), Fair Value Measurement Option
- IFRS 1 (amendment), First-time Adoption of IFRS
- IFRS 4 (amendment), Financial Guarantee Contracts
- IFRS 6 (amendment), Exploration for and Evaluation of Mineral
Resources
- IFRIC 5, Rights to Interest arising from Decommissioning,
Restoration and Environmental Rehabilitation Funds
- IFRIC 6, Liabilities arising from Participating in a Specific
Market - Waste Electrical and Electronic Equipment
- IFRIC 7, Applying the restatement approach under IAS 29, Financial
reporting in hyperinflationary economies
- IFRIC 8, Scope of IFRS 2
- IFRIC 9, Reassessment of Embedded Derivatives
The implementation of the renewed standards has not required
changes to the comparison figures.
Reclassification in the balance sheet:
Division of derivative assets and liabilities into current and non-
current has been taken into use in 2006. Derivative instruments,
for which hedge accounting is applied, and for which the
underlying cash flow matures after twelve months, are included in
non-current assets and liabilities, other derivative instruments
are included in current assets and liabilities. In previous
financial statements all derivatives have been included in current
assets and liabilities. The comparative figures have been restated
accordingly.
Pro forma accounting principles:
Cargotec was listed on June 1, 2005 and the Company's first
financial period was June 1-December 31, 2005. The annual report
presents pro forma comparison figures for those periods for which
official comparative figures are not available. Pro forma figures
present Cargotec's financial information based on its business and
corporate structure at the time of the listing to facilitate the
financial evaluation of the Company. Hence, MacGREGOR's marine
cargo flow business acquired in spring 2005 is included in the pro
forma figures of all comparison periods as if the acquisition
would have happened before the periods presented. Pro forma
information is based on IFRS and the accounting principles of
Cargotec's official consolidated financial statements have been
applied when suitable. The figures are unaudited. The final
accounting impact of the MacGREGOR acquisition according to IFRS 3
is included in the official result as of June 1, 2005. In the 2005
pro forma figures the impact has been recognized as an adjustment
to equity. The pro forma accounting principles prior to the
listing are presented in Cargotec's listing particulars.
QUARTERLY FIGURES
Cargotec Q4/2006 Q3/2006 Q2/2006 Q1/2006 Q4/2005
Orders MEUR 716.4 603.2 785.6 805.1 590.6
received
Order book MEUR 1,620.5 1,594.1 1,544.2 1,439.1 1,256.9
Sales MEUR 697.2 624.8 661.2 613.9 621.6
Operating MEUR 57.7 52.1*** 61.0 50.9 52.7**
income
Operating % 8.3 8.3*** 9.2 8.3 8.5**
income
Basic EUR 0.61 0.60*** 0.64 0.52 0.56**
earnings/share
Hiab Q4/2006 Q3/2006 Q2/2006 Q1/2006 Q4/2005
Orders MEUR 240.7 207.3 232.1 266.1 234.6
received
Order book MEUR 215.4 215.4 216.3 226.3 196.7
Sales MEUR 238.9 208.2 237.1 229.6 231.0
Operating MEUR 22.7 17.4 23.4 22.5 20.1
income
Operating % 9.5 8.4 9.9 9.8 8.7
income
Kalmar Q4/2006 Q3/2006 Q2/2006 Q1/2006 Q4/2005
Orders MEUR 327.1 257.8 346.0 351.4 230.1
received
Order book MEUR 592.7 580.9 614.9 586.7 519.5
Sales MEUR 320.5 290.0 309.1 283.7 288.2
Operating MEUR 28.2 27.5 31.0 25.0 27.0
income
Operating % 8.8 9.5 10.0 8.8 9.4
income
MacGREGOR Q4/2006 Q3/2006 Q2/2006 Q1/2006 Q4/2005
Orders MEUR 148.9 138.8 207.9 188.1 126.3
received
Order book MEUR 812.6 798.2 713.2 626.3 540.9
Sales MEUR 138.2 127.0 115.5 101.0 103.1
Operating MEUR 9.7 9.9 10.2 6.1 8.5*
income
Operating % 7.0 7.8 8.8 6.0 8.2*
income
* Excluding the impact of the final accounting of MacGREGOR
acquisition
** Excluding gain on the sale of Consolis and the impact of the
final accounting of MacGREGOR acquisition
*** Excluding gain on the sale of property
Information of quarter Q4/2005 differs from the pro forma
information for the quarter as different currency rates have been
used due to different accounting periods. Hence, the above
presented quarterly figures for 2005 added together differ from
full year 2005 pro forma figures.