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IR Blog: Services as Cargotec's focus area


Services is one of the focus areas of Cargotec’s strategy.

In conjunction with the capital markets day on 15 November 2022, Cargotec disclosed for the first time some compelling financial details and KPIs of its core businesses (1) services. In this blog, we will go through and explain these new disclosures.

Service sales

Kalmar’s and Hiab’s combined services sales amounted to 920 MEUR (2) in Q3/22 LTM, having been growing on average by 5% per annum (3). In Q3/22 LTM, service sales constituted 29 percent of core businesses’ total revenue. Cargotec reports Kalmar’s and Hiab’s service sales on a quarterly basis.

Service comparable operating profit

Kalmar’s and Hiab’s combined comparable operating profit from services amounted to 180 MEUR (2) in Q3/22 LTM. This means that the comparable operating margin of the services of Cargotec’s core businesses is around 19.5 percent. There is no significant difference between the profitability of Hiab and Kalmar services. Cargotec is not currently reporting the service business's comparable operating profit on an ongoing basis.

Installed base

Installed base is the total number of equipment in use. Kalmar’s installed base is currently >65,000 units and Hiab’s >175,000 units + approximately 200,000 tail lifts.

Spare part capture rate

Spare parts sales is roughly half of Kalmar’s and Hiab’s service sales. In addition to the growing number of our machines in operation, revenue from spare part sales is expected to grow by increasing our share of spare parts used in the installed base.

Currently, Kalmar’s spare part capture rate is >25 percent and Hiab’s >45 percent. By 2025, Kalmar forecasts that its capture rate would increase to 37 percent and Hiab to >50 percent. A 100-percent capture rate would only be theoretically possible, as that would mean that every single spare part of our equipment would be purchased from us. In addition to our own service personnel, also customers’ own employees, our partners or dealers maintain our equipment.

Recurring services

Recurring services are the services which are generated through the installed base. For Hiab, that share was 82 percent in Q3/22 LTM. The remaining part of service sales comes for sales of refurbished equipment and installation services.

In Kalmar, the share of recurring services is closer to 95 percent of its service sales. The difference between Kalmar and Hiab is mainly related to the offering. Hiab offers installation service of its new load handling solutions to trucks which is not needed for Kalmar solutions.

1) Hiab and Kalmar excluding heavy cranes
2) Management estimate
3) Between 2013–Q3/2022 LTM



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