Stefan Lampa: "Robotics and electrification are the future of Kalmar Mobile Solutions"

From left to right: Hanna-Maria Heikkinen, VP, IR, Stefan Lampa, President, Kalmar Mobile Solutions & Aki Vesikallio, Director, IR at Kalmar Mobile Solutions investor event on 26 February.

Kalmar Mobile Solutions had approximately 1.3 billion euros sales in 2019 and business was highly profitable with low double-digit EBIT-margin. Thus, it wasn’t surprising that the event was well attended by 20 analysts and investors who were keen to know more about this Strategic Business Unit and its future prospects within robotics, electrification and service. The active and professional audience started bombarding Stefan with questions already in the beginning of the presentation and the discussion stayed lively for more than two and half hours.

Stefan started off with covering Kalmar Mobile Solutions’ robust foundation: a well known brand, dedicated people, global operational footprint, regional market leadership with its premium products and extensive service offering as well as customer data insight coming from more than 10,000 connected machines. 

The underlying markets are expected to continue to grow supported by megatrends such as demographic and social changes, climate change, digitalisation and globalisation, but addressing the customer needs of the future require investments in digitalisation, automation and electrification hence making the technology leaders, such as Kalmar, even stronger in the future.

Ultimately Kalmar’s mobile equipment, used eg. in ports and terminals, distribution centers and heavy industries, will become smart robots. As Mr. Lampa put it, they will operate autonomously in complex environments, coordinating and optimising cargo flows by themselves. These flexible machines can be easily reprogrammed to be used in different environments and sites that dramatically increases the scalability and modularity of the solution. Heavy logistics has been a dangerous business and automated solutions will dramatically improve the safety of the sites. Another driver for robotisation is the demographic megatrend of aging populations, which is already visible in e.g. US distribution centers in the form of labour shortage. 

Automation comes in connection with electrification, which received most analyst attention during the event. Kalmar has a long history in making electrified equipment and Mr. Lampa promised that electric versions of the whole Mobile Solutions’ product range will be offered by 2021. Sustainability is heavily driving demand for our electrified solutions already now and despite higher initial investment, the life cycle costs are in many cases already lower than those of combustion engine powered equipment. 

Transition to electrified equipment offers Kalmar an opportunity to further increase service revenue. Due to less wear and tear, the overall service need of the equipment will go down, but as the solutions will become more complex, Kalmar will be able to take over more of the maintenance work nowadays conducted by the customers. Kalmar will also partner with its spare part suppliers that together with growing maintenance services enables Kalmar to increase spare parts’ capture rates and gross margins. 

Demand for mobile equipment has been driven by the replacement cycle that is typically 6-8 years, thus even the equipment sales have generated relatively stable earnings. In long term, Kalmar Mobile Solutions has the ambition to introduce new subscription based revenue models including equipment, service and possibly recommission. The opportunities in service business, new contract models and increasing distribution segment will help to further stabilise the revenue streams of the strategic business unit. To summarise, Kalmar Mobile Solutions will become even safer, more sustainable and productive through collaboration in the future.