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IR Blog: Frequently asked questions about Cargotec's Q1/2022 result

Why did your comparable operating profit increase? What is the impact from supply and logistic chain issues? How have you progressed with the refocused strategy? Here are answers to some of the most topical questions regarding the Q1 2022 interim report.

What is your outlook for 2022?

Cargotec expects its comparable operating profit for 2022 to improve from 2021 (232 MEUR)

Why did Cargotec’s comparable operating profit increase by 26 percent to 65 MEUR in Q1?
The comparable operating profit increase was driven by higher Hiab and Kalmar mobile equipment sales.

Cargotec’s orders increased by 2 percent in Q1. What were the drivers?

Demand remained robust and Cargotec’s Q1 orders received increased to 1,135 MEUR.

  • High utilisation of connected equipment continued suggesting healthy demand
  • Hiab had the second highest quarter ever. Strong demand, but the quarter also included some big one-off type of orders
  • Kalmar core equipment sales remained at a strong level and service orders increased
  • Kalmar’s heavy port crane orders decreased and Navis divestment had a negative impact
  • Orders in MacGregor decreased slightly

Do you expect supply and logistic chain issues to continue in Q2 and in 2022?
We expect the component and logistics challenges to continue for a good part of 2022. The visibility is weak as the shortages vary from week to week. The war in Ukraine and lockdowns in China are not helping the situation.

What is your status regarding Russia's attack on Ukraine?
Cargotec has limited direct exposure to Russia and Ukraine. In 2021, Russia’s share of total sales was below 1 percent, and Ukraine's share was even smaller.

Our sales to Russia and Belarus have been suspended. We are currently winding down all activities in Russia. We have booked a 10 million euros impairment provision to assets that relate to our business in Russia. We are actively cooperating with our suppliers to find new steel etc. sources to secure volumes. We are prepared for additional price increases.

Cargotec employs approximately 50 people in Russia. In Ukraine we do not have our own personnel. We do not have any assembly operations in Russia nor in Ukraine. However, some of our suppliers have used Ukrainian and Russian steel.

If the situation continues, we expect further uncertainties through inflation, supply and logistics challenges and general economic uncertainty.

How did Kalmar Q1 orders received develop?
Kalmar’s Q1 orders received decreased by 6 percent to 499 MEUR.

  • The decrease was mainly due to the divestment of the Navis software business
  • Orders decreased also in the heavy port cranes business
  • Orders increased in services
  • Core equipment orders remained at the comparison period’s strong level

Kalmar’s Q1 comparable operating profit increased by 41 percent to 28 MEUR, why?
Kalmar’s comparable operating profit increased due to higher mobile equipment sales.

Hiab’s orders received for the first quarter increased by 13 percent from the comparison period to 482 MEUR, why?
Strong demand continues and Q1/22 orders received was the second highest quarter in Hiab’s history (after Q2/21). The demand remains robust and we also received large one-time orders, for example a significant order for MOFFETT truck mounted forklifts to a US customer worth over 24.5 MEUR.

Why did Hiab’s comparable EBIT increase by 25 percent to 49 MEUR y-o-y?
Hiab’s comparable operating profit increased due to higher sales.

Why did MacGregor’s orders received decrease by 5 percent to 154 MEUR?
Orders came out lower than we had anticipated but have a very good order pipeline going into the second quarter.

Why did MacGregor’s comparable operating profit decrease by 3 MEUR to 0 MEUR?
MacGregor’s comparable operating profit decreased due to weak profitability in the offshore projects. Results improved in services and in merchant vessels.

Why did your gearing increase from 27 to 38 percent?
Roughly half of the increase was related to the dividend payment and another half to increased inventories.

Why did your eco portfolio sales increase by 38 percent to 202 MEUR?
Eco portfolio sales increase was driven by an increase in all businesses, especially in Kalmar mobile equipment and in Hiab. The increase was significant as in the comparison period the eco portfolio sales included Navis sales of 23 MEUR (the sale of Navis was completed in July 2021). Customer demand for eco solutions is clearly increasing. As examples from the first quarter, Hiab received a record order for electric truck mounted forklifts and Kalmar was awarded its first order for the world’s first fully electric reachstackers. In the future, as 28 new products were added to the eco portfolio and Hiab presented its third all-electric truck mounted forklift model, we will be able to respond even better to the demand for sustainable equipment.

How have you progressed with the refocused strategy? What concrete steps have you taken?
We have started all the actions we set out to do, as was stated in our presentation on 30 March. Thus, MacGregor’s strategic evaluation has started, as well as our plan to exit heavy port cranes. We have also started reviewing our operating model. We will keep you updated on the progress.

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