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IR Blog: Frequently asked questions about Cargotec's Q3/2023 result


Why did Cargotec’s orders decrease by 20 percent? Why did Cargotec’s comparable operating profit increase by 48 percent? What does the operation environment look like? Here are answers to some of the most topical questions regarding Cargotec’s interim report January–September 2023.

Cargotec’s orders decreased by 20% to EUR 914 million in Q3. What were the drivers?
Order received decreased in all business areas. In Kalmar, the demand picture was mixed, characterised by slow decision making in larger equipment orders, destocking in distribution-related customer segments, and continued good demand for smaller mobile equipment used in small and midsized terminals and industrial operations. In Hiab, inflation, extended truck lead times and interest rates impacted orders received. In MacGregor, demand was good in merchant and services while we were selective in accepting new offshore orders.

How large is Cargotec’s order book?
We have a solid order book of MEUR 3,065 million.

Why did Cargotec’s sales improve by 6 percent to EUR 1,102 million in Q3?
Our operational execution was at a good level, leading to a sales increase by 6 percent.

Why did Cargotec’s comparable operating profit increase by 48 percent to EUR 131 (89) million in Q3?
The comparable operating profit increase was driven by higher sales and successful management of inflationary pressures and costs.

What is your outlook for 2023?
Our outlook remains unchanged. Cargotec estimates its core businesses’ 2023 comparable operating profit to improve from 2022 (EUR 384 million) and MacGregor’s comparable operating profit in 2023 to be positive (EUR -47 million).

Kalmar’s Q3 comparable operating profit increased by 41% to EUR 71 (51) million, why?
Kalmar’s comparable operating profit increased due to successful management of inflationary pressures, favourable sales mix and smaller losses related to heavy cranes business, which will be discontinued.

Why did Hiab’s comparable operating profit increase by 24% to EUR 62 (50) million Q3?
Hiab’s comparable operating profit increased due to higher sales and effective management of inflationary pressures.

Why did MacGregor’s comparable operating profit increase to EUR 9 (0) million in Q3?
MacGregor’s comparable operating profit increased due to higher sales in service and merchant businesses, smaller losses related to offshore business, and cost savings.

What would have been the result of Cargotec’s core businesses in Q3?
Our core businesses’ comparable operating profit margin was 13.8 in Q3. We publish core businesses’ key figures in our quarterly reports to make it easier for investors to track our progress towards our financial targets. Core businesses = Cargotec excluding MacGregor and Kalmar heavy cranes business (includes corporate administration and support functions).

How did your service business develop in Q3?
In the third quarter, service orders received decreased by -4 percent and totalled EUR 312 (325) million. Service sales increased by 3 percent from the comparison period and totalled EUR 334 (323) million, representing 30 (31) percent of consolidated sales.

How did your eco portfolio develop in Q3?
Eco portfolio sales increased by 13 percent in the third quarter and totalled EUR 367 (325) million, representing 33 (31) 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 are component prices developing?
There is still pricing pressure, stemming mostly from higher labour costs partly offset by lower raw material prices, logistic costs and our own actions like dual sourcing.

Have you introduced new price increases in 2023, and will you continue doing so?
No new major pricing increases. We monitor the situation and if the cost development so requires, we may adjust prices also going forward.

How is the heavy cranes exit progressing?
The heavy cranes exit is progressing according to the plan.

How much was the effect of currencies and structural changes in your orders received and sales?
Structural changes did not have a material impact on orders received nor on sales. Changes in exchange rates had a 4 percentage point negative effect on Cargotec's orders received, and a 5 percentage point negative effect on Cargotec's sales.

The impact of structural changes and changes in fx rates on orders and sales are reported in our interim report.

What does the operation environment look like?
The business environment in which Cargotec operates is increasingly complex, stemming from high interest rates and inflation, instability of the financial markets, fear of recession, continued supply chain bottlenecks, growing geopolitical tensions, and sluggish growth estimates. However, many of our customers and partners are performing well.

What was your operative cash flow in Q3?
Cash flow from operating activities before financial items and taxes totalled EUR 184 (116) million in Q3. Strong cash flow was driven by good profitability and reduction in accounts receivable.

What were your restructuring costs in Q3?
Restructuring costs in the third quarter amounted to EUR 2 (15) million and to EUR 8 (55) million in January–September. The restructuring costs in January–September were related to the restructuring programme in MacGregor.

How did your gross profit margin develop in Q3/23?
Cargotec’s gross profit margin improved to 24.1 percent in Q3/2023 from 20.3% in Q3/2022.

How is the planned separation of Kalmar and Hiab progressing?
Separation of our core businesses Kalmar and Hiab into two world-leading standalone companies is progressing according to the previously communicated plan. We will provide more details on the progress of the planned demerger earliest in the conjunction with the full year 2023 result release.

How much demerger costs have you booked so far? What is your estimate for 2023?
So far we have booked EUR 12 million in 2023. The demerger planning costs for 2023 are included in our 2023 items affecting comparability estimate of -35 MEUR.

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