IR Blog: Frequently asked questions about Cargotec's Q3/2020
What are your assumptions for Q4 and 2021? What is the MacGregor order outlook? Here you can find answers to some of the most topical questions regarding our Q3/2020 interim report.
What is your expectation for Q4 and FY 2020 comparable EBIT?
We estimate our second half 2020 comparable operating profit to increase compared to the first half of 2020, when it was EUR 82.9 million.
What is your guidance for 2021?
Guidance for 2021 will be given earliest in February 2021, in connection with Q4 release.
What are the assumptions for Q4 and 2021?
The challenging situation caused by the pandemic crisis has improved gradually during the year. Orders and sales have started to gradually bounce back but are still below the pre-COVID19 levels. Uncertainty still prevails considering the future demand, as well as supply chain functionality. We estimate our second half 2020 comparable operating profit to increase compared to the first half of 2020, when it was EUR 82.9 million.
Has there been a change in risks related to MacGregor’s goodwill impairment?
The MacGregor impairment test conducted in Q3 did not indicate a need for goodwill impairment. The headroom is 57M€, slightly up from Q2. MacGregor segment’s goodwill on the reporting date was EUR 466.9 (31 Dec 2019: 493.6) million. We continue to monitor the situation closely.
In our sensitivity analysis in Note 3 we conclude that the amount of impairment may be significant if the crisis turns out to be longer or worse than currently estimated. We continue to monitor the situation closely.
Why did Kalmar Q3 orders received decrease by 17%?
Kalmar’s orders received declined in particular in automation and projects business while in mobile equipment and services the decline was smaller. Customers are still interested in automation solutions as such, but the larger automation orders have been postponed until next year due to the COVID-19 situation and an uncertain market environment.
Kalmar Q3 comparable operating profit declined by 32%, why?
Kalmar’s comparable operating profit decreased due to decline in sales and costs related to automation and projects business’ supply chain reorganisation. The decline was partly offset by productivity improvements and cost savings as well as improved margins in the mobile equipment business. Also software revenues were lower in Q3/20 YoY.
Why did Hiab’s comparable EBIT decrease by 9% y-o-y in Q3?
Hiab’s comparable operating profit decreased due to decline in sales. However, Hiab’s comparable operating margin improved due to productivity improvements and cost savings as well as higher gross margins.
Why did MacGregor’s comparable operating profit increase?
MacGregor’s comparable operating profit increased driven by cost savings achieved by restructurings and higher gross margins. Improved project execution contributed to higher gross margins.
Order outlook for MacGregor?
The situation is expected to remain challenging. In Q3, we booked an extraordinary large order for a wind turbine installation vessel. The demand for MacGregor’s cargo handling solutions is impacted by the level of merchant ship contracting, which is prognosed to decrease in 2020 and draw close to the historically low level of 2016.
How did the sales of your eco-efficiency portfolio develop?
Sales of eco-efficiency portfolio increased during the first nine months of 2020. Its share of Cargotec’s total sales is now 24 percent (Q1–Q3/19: 20)