CARGOTEC CORPORATION, Q1 2019 INTERIM REPORT, 25 APRIL 2019 AT 2.00 PM EEST
Cargotec's interim report January-March 2019: Orders received increased in all business areas
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Strong quarter in all key figures at Kalmar
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Good development in orders received continued at Hiab
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MacGregor's orders received increased
January-March 2019 in brief: Orders received and sales increased
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Orders received increased by 18 percent and totalled EUR 1,022 (863) million. Orders received grew in all business areas.
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Order book amounted to EUR 2,145 (31 Dec 2018: 1,995) million at the end of the period.
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Sales increased by 11 percent and totalled EUR 856 (773) million.
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Service sales increased by 5 percent and totalled EUR 249 (237) million.
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Service and software sales represented 33 (35) percent of consolidated sales.
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Operating profit was EUR 51.0 (53.2) million, representing 6.0 (6.9) percent of sales.
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Comparable operating profit remained at the comparison period's level and amounted to EUR 57.4 (57.5) million, representing 6.7 (7.4) percent of sales.
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Cash flow from operations before financial items and taxes totalled EUR 31.0 (-3.7) million.
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Net income for the period amounted to EUR 31.0 (33.7) million.
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Earnings per share was EUR 0.48 (0.52).
Outlook for 2019
Cargotec reiterates its outlook published on 8 February 2019 and expects its comparable operating profit for 2019 to improve from 2018 (EUR 242.1 million).
Cargotec's key figures
Cargotec applies the new accounting standard IFRS 16, Leases, and the new interpretation IFRIC 23, Uncertainty over Income Tax Treatments, starting from 1 January 2019. More information on the new standards is available in Note 2, Accounting principles and new accounting standards. Cargotec has also refined the definition of service business for Hiab and MacGregor from the beginning of 2019. The figures related to service business have been restated for the comparison period 2018 accordingly. Cargotec has published a stock exchange release on 4 April 2019 regarding the changes.
| MEUR | Q1/19 | Q1/18 | Change | 2018 |
| Orders received | 1,022 | 863 | 18% | 3,756 |
| Service orders received | 261 | 256 | 2% | 1,031 |
| Order book, end of period | 2,145 | 1,684 | 27% | 1,995 |
| Sales | 856 | 773 | 11% | 3,304 |
| Service sales | 249 | 237 | 5% | 980 |
| Software sales* | 38 | 32 | 18% | 147 |
| Service and software sales, % of Cargotec's sales | 33% | 35% | 34% | |
| Operating profit | 51.0 | 53.2 | -4% | 190.0 |
| Operating profit, % | 6.0% | 6.9% | 5.8% | |
| Comparable operating profit | 57.4 | 57.5 | 0% | 242.1 |
| Comparable operating profit, % | 6.7% | 7.4% | 7.3% | |
| Income before taxes | 42.8 | 46.4 | -8% | 161.1 |
| Cash flow from operations before financing items and taxes | 31.0 | -3.7 | > 100% | 125.8 |
| Net income for the period | 31.0 | 33.7 | -8% | 108.0 |
| Earnings per share, EUR | 0.48 | 0.52 | -8% | 1.66 |
| Interest-bearing net debt, end of period | 877 | 575 | 53% | 625 |
| Gearing, % | 63.0% | 41.5% | 43.8% | |
| Interest-bearing net debt / EBITDA** | 3.2 | 2.0 | 2.3 | |
| Return on capital employed (ROCE), last 12 months, % | 7.8% | 9.4% | 8.0% | |
| Personnel, end of period | 12,194 | 11,498 | 6% | 11,987 |
*Software sales include Navis business unit and automation software
**Last 12 months' EBITDA
Cargotec's CEO Mika Vehviläinen: Strong development in orders received continued
The demand for Cargotec's load handling solutions continued to be strong during the first quarter of 2019. Orders received grew in total by 18 percent compared to the comparison period, and the growth was evenly spread between all of our business areas. Sales developed favourably as well, increasing by 11 percent.
Our comparable operating profit remained at the comparison period's level. Kalmar's profitability improvement was driven by higher sales. The sales grew also in Hiab, but especially the challenges in the supply chain led to a decline in the comparable operating profit compared to the first quarter of 2018. We continued our efforts to solve these issues, and believe that Hiab's performance will improve during the second half of 2019. Despite the increase in MacGregor's orders received, the market situation remains difficult. Nevertheless, MacGregor's comparable operating profit remained positive.
The development in our service and software business was good during the first quarter. Service sales grew by five percent and software sales by 18 percent. During the quarter, we strengthened our software offering by acquiring the US-based Cetus Labs, Inc., which offers a cloud-based Octopi terminal operating system (TOS) for small container and mixed cargo terminals. With the addition of Octopi to its software portfolio, Navis is better positioned to support thousands of smaller terminals around the world that are eager to modernise their terminal operations, yet lack the technology infrastructure or technical expertise required to support a full-scale Navis N4 TOS deployment. Service and software sales constituted around one third of our sales. Our target is to increase the annual sales of our service and software business to 1.5 billion euros.
Reporting segments' key figures
Orders received
| MEUR | Q1/19 | Q1/18 | Change | 2018 |
| Kalmar | 516 | 432 | 19% | 1,919 |
| Hiab | 341 | 307 | 11% | 1,259 |
| MacGregor | 165 | 124 | 33% | 580 |
| Internal orders | 0 | 0 | -1 | |
| Total | 1,022 | 863 | 18% | 3,756 |
Order book
| MEUR | 31 Mar 2018 | 31 Dec 2018 | Change |
| Kalmar | 1,127 | 1,012 | 11% |
| Hiab | 483 | 453 | 7% |
| MacGregor | 536 | 530 | 1% |
| Internal orders | -1 | -1 | |
| Total | 2,145 | 1,995 | 8% |
Sales
| MEUR | Q1/19 | Q1/18 | Change | 2018 |
| Kalmar | 401 | 371 | 8% | 1,618 |
| Hiab | 316 | 276 | 14% | 1,149 |
| MacGregor | 139 | 126 | 10% | 538 |
| Internal sales | 0 | 0 | -2 | |
| Total | 856 | 773 | 11% | 3,304 |
Operating profit
| MEUR | Q1/19 | Q1/18 | Change | 2018 |
| Kalmar | 31.2 | 27.9 | 12% | 138.1 |
| Hiab | 33.4 | 36.1 | -7% | 133.8 |
| MacGregor | -0.7 | 0.1 | < -100% | -4.2 |
| Corporate administration and support functions | -12.9 | -10.9 | -18% | -77.7 |
| Total | 51.0 | 53.2 | -4% | 190.0 |
Comparable operating profit
| MEUR | Q1/19 | Q1/18 | Change | 2018 |
| Kalmar | 32.3 | 28.7 | 13% | 143.6 |
| Hiab | 33.7 | 36.1 | -7% | 134.5 |
| MacGregor | 1.2 | 0.7 | 64% | -1.6 |
| Corporate administration and support functions | -9.8 | -8.0 | -22% | -34.4 |
| Total | 57.4 | 57.5 | 0% | 242.1 |
Press conference for analysts and media
A press conference for analysts and media, combined with a live international telephone conference, will be arranged on 25 April at 3.30 p.m. EEST at Cargotec's head office, Porkkalankatu 5, Helsinki. The event will be held in English. The report will be presented by CEO Mika Vehviläinen and Executive Vice President, CFO Mikko Puolakka. The presentation material will be available at www.cargotec.com by latest 3.00 p.m. EEST.
The telephone conference, during which questions may be presented, can be accessed with access code 558247 using the following numbers:
FI: +358 (0)9 7479 0360
SE: +46 (0)8 5033 6573
UK: +44 (0)330 336 9104
US: +1 323-701-0223
The event can also be viewed as a live webcast at www.cargotec.com. An on-demand version of the conference will be published at Cargotec's website later during the day.
For further information, please contact:
Mikko Puolakka, Executive Vice President and CFO, tel. +358 20 777 4105
Hanna-Maria Heikkinen, Vice President, Investor Relations, tel. +358 20 777 4084
Cargotec (Nasdaq Helsinki: CGCBV) enables smarter cargo flow for a better everyday with its leading cargo handling solutions and services. Cargotec's business areas Kalmar, Hiab and MacGregor are pioneers in their fields. Through their unique position in ports, at sea and on roads, they optimise global cargo flows and create sustainable customer value. Cargotec's sales in 2018 totalled approximately EUR 3.3 billion and it employs around 12,000 people. www.cargotec.com