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IR Blog: Frequently asked questions about Cargotec's Q2/2023 result


How did the order intake develop? Why did Cargotec's comparable operating profit reach record-high levels? How is the planned separation of Kalmar and Hiab progressing? Here are answers to some of the most topical questions regarding Cargotec’s half-year report January–June 2023.

Cargotec’s orders decreased by 28% to EUR 999 million in Q2. What were the drivers?
Kalmar had in the comparison period an extraordinarily large straddle order of 85 units, over 100M€. Furthermore we have seen in 2023 slower customer decision making for larger investments, like Straddle Carriers. Service orders remained stable.

In Hiab, underlying demand drivers remained at a good level but orders received declined from the record-high comparison period, which was boosted by pre-buying ahead of pricing increases. In the comparison period we also had larger fleet owner Truck Mounted Forklift deals. Order intake was also affected by inflation, high interest rates, and extended truck lead times.

In MacGregor customers are actively making investments, but as the shipyards are getting full, the vessel lead times have extended and therefore customers are not in a hurry to place the order for MacGregor. We continue to see good quoting activity for container vessels, car carriers, heavy lifting vessels and services.

How large is Cargotec’s order book?
We have a solid order book of EUR 3,424 million. Our order book remains above the historical average and to a large extent covers the second half equipment sales.

Why did Cargotec’s sales improve by 25% to EUR 1,200 million in Q2?
Improved efficiency in supply chain management supported sales growth, despite persisting volatility of the component availability.

Why did Cargotec’s comparable operating profit increase by 94% to EUR 158 (82) million in Q2?
The comparable operating profit increase was driven by higher sales and successful management of inflationary pressures and costs.

Kalmar’s Q2 comparable operating profit increased by 91% to EUR 78 (41) million, why?
The comparable operating profit increased due to higher sales, deliveries of semi-finished products, successful management of inflationary pressures and component availability, as well as smaller losses related to heavy cranes business, which will be discontinued.

Why did Hiab’s comparable EBIT increase by 31% to EUR 81 (62) million y-o-y in Q2/23?
Hiab’s comparable operating profit increased due to higher sales, effective management of inflationary pressures and controlling costs.

Why did MacGregor’s comparable operating profit increase by over 100 percent to EUR 10 (-10) million in Q2/23?
Comparable operating profit increased due to higher sales in merchant and service businesses.

What would have been the result of the core businesses in Q2/23?
The comparable operating profit of Cargotec’s core businesses increased by 54 percent and amounted to EUR 149 (97) million. In the second quarter, the comparable operating profit margin of the core businesses was 14.7 (11.8). We publish core businesses’ key figures in a table in our quarterly reports to make it easier for investors to track our progress towards our financial targets.

How much did you book items affecting comparability in Q2 and what was Cargotec’s operating profit in Q2?
The operating profit for the second quarter totalled EUR 151 (47) million. The operating profit includes items affecting comparability worth EUR -8 (-34) million. EUR 0 (-28) million of the items were related to Kalmar, EUR 0 (0) million to Hiab, EUR -2 (-5) million to MacGregor and EUR -6 (-2) million to corporate administration and support functions.

How did Cargotec’s service business develop in Q2?
Service orders received increased by 6 percent and totalled EUR 326 million. Services sales increased by 14 percent from the comparison period and totaled EUR 344 million, representing 29 percent of consolidated sales.

How did Cargotec’s eco portfolio develop in Q2?
Eco portfolio sales increased by 26 percent in the second quarter and totalled EUR 362 (286) million, representing 30 (30) percent of consolidated sales. Eco portfolio sales increased in both climate change mitigation and transition to circular economy categories and in all business areas.

How was the supply chain situation in Q2?
The supply chain situation has improved but is expected to remain volatile. We are still seeing availability issues globally with eg. in components that contain microchips, powertrain, engines, and electrics. Type of lacking components vary from week to week. We monitor the situation on a daily basis and take corrective actions.

How much was the effect of currencies and M&A in your orders, sales and comparable operating profit?
Currency and structural change impacts on orders received and sales are reported in our financial reports.

In the second quarter of 2023, orders received decreased organically in constant currencies by 26 percent. Changes in exchange rates had a 2 percentage point negative effect on Cargotec's orders received. Structural changes did not have a material impact on Cargotec's orders received. In constant currencies, sales increased organically by 28 percent. Changes in exchange rates had a 3 percentage point negative effect and structural changes a 1 percentage point positive effect on Cargotec's sales in the second quarter.

How does the operation environment look like?
During the first half of 2023, the market environment was characterised by elevated uncertainty stemming from high interest rates and inflation, instability of the financial markets, fear of recession, continued supply chain bottlenecks, geopolitical tensions, and sluggish growth estimates. However, many of our customers and partners are performing well and we have experienced steady demand.

What was your operative cash flow in Q2/2023?
Cash flow from operations before finance items and taxes totalled EUR 41 (38) million.

What is your estimate for restructuring costs in 2023?
For the year 2023, Cargotec estimates to book EUR 55 million items affecting comparability, including restructuring costs of ongoing restructuring programmes and costs related to planning of the potential separation of Kalmar and Hiab. The cost estimate may be subject to change.

How did your gross profit margin develop in Q2/23?
Cargotec’s gross profit margin improved to 25.1% in Q2/2023 from 22.4% in Q2/2022.

How is the planned separation of Kalmar and Hiab progressing?
Analysing both internal and external feedback, the news about the potential partial demerger has been well received. The planning has progressed in line with previously communicated timeline and objectives and we’re happy to announce that one of the key positions has been filled as Sakari Ahdekivi has been appointed Kalmar's Chief Financial Officer. Planning will continue throughout 2023.

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