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Why invest in Cargotec
On 27 April 2023, Cargotec's Bopard of Directors decided to investigate and initiate a process to potentially separate its core businesses Kalmar and Hiab into two standalone companies. On 30 May 2024, Cargotec's Annual General Meeting resolved on the partial demerger of Cargotec Corporation in accordance with the demerger plan. On 30 June 2024, the completion of the partial demerger of Cargotec Corporation was registered with the Finnish Trade Register. Read more
The year 2024 was a successful one for Cargotec. We executed the transformation of the company according to the targets set by the Board in 2023. We reached all our major goals for the year, continued the good business performance, completed the separation of Hiab and Kalmar, and found a solution for MacGregor.
Due to this progress in the transformation, Cargotec's continuing operations’ reported financials consist only of the Hiab business area, as well as continuing operations’ Corporate administration and support functions.
The market environment remained complex throughout the year. Expectations on lower interest rates and uncertainty in some of Hiab’s key geographies and industries delayed customer decision making. Orders received increased by 3 percent from the previous year to EUR 1,509 million. The order growth was driven by the Americas. Due to the normalised supply chain, our order book decreased to EUR 648 million. However, our book-to-bill was positive in the fourth quarter.
Our sales decreased by 8 percent from the previous year's level following the order book development and amounted to EUR 1,647 million. In our strategic focus areas, North America and services, our sales continued to grow.
Despite lower sales, we were able to improve our relative profitability with successful management of inflationary pressures as well as sourcing and supply chain actions. Our comparable operating profit decreased by 1 percent and amounted to EUR 217 million corresponding to 13.2 percent of sales compared to EUR 219 million and 12.3 percent in 2023. Comparable operating profit for the Hiab business area amounted to EUR 245 million or 14.9 percent of sales, which is a record high comparable operating profit margin for the business area.
In addition to the good business performance, we have executed the two-year transformation project according to our plans. Among the transformation milestones is the separate listing of Kalmar in the beginning of July 2024. The listing was completed only 14 months after the demerger announcement and Kalmar is now fully separated from Cargotec.
Another major milestone was achieved in November as we signed an agreement to sell MacGregor to funds managed by Triton after a successful turnaround of the business. The enterprise value of the transaction is EUR 480 million. Closing of the transaction is expected to take place by 1 July 2025 at the latest. Conditional to closing of the transaction, Cargotec’s Board is proposing an additional dividend of EUR 1.57 per class B share to be paid in 2025 in addition to the proposed ordinary dividend of EUR 1.20 per class B share.
Cargotec's transformation will be finalised this year, when we close the sale of MacGregor and Hiab will continue its growth and development as the remaining standalone part of the group. Hence, the Board is proposing to Cargotec’s Annual General Meeting of shareholders that the company’s name would be changed from Cargotec to Hiab with an effective date of 1 April 2025.
I’m convinced that Hiab will have a bright future as a standalone company. Hiab has a clear strategy that was revealed in the Capital Markets Day in May and a motivated and experienced leadership team in place. Furthermore, Hiab’s strategy execution is already well underway. For example in 2024, we signed several new dealer agreements to facilitate growth in the US, reached all-time high service sales, and continued to shape the industries we serve with 45 new product launches. This year, Hiab continues investing to increase productivity and profitability for example by streamlining the production setup in Italy and renewing product and service operations in Ireland and in the UK.
This progress coupled with the recent achievement to improve comparable operating profit margin even with lower sales further increases Hiab’s confidence to reach 16 percent comparable operating profit margin by 2028 as a standalone company.
As the name change takes place, Scott Phillips would become the new CEO of the renamed company and I would step down from the CEO position, as announced already in May 2024. I would like to take this opportunity to thank the shareholders for the trust and Board of Directors for great cooperation as well as all the current and former colleagues, partners, and customers for making 2024 another successful year for the company.
