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Hiab MacGregor Kalmar Stock Exchange Release

Cargotec's January-June 2016 interim report: business developed favourably

7/20/2016

CARGOTEC CORPORATION, INTERIM REPORT, 20 JULY 2016 AT 12.00 NOON EEST
 
Cargotec's January-June 2016 interim report: business developed favourably
- Profitability improved in Kalmar and Hiab
- MacGregor profitability satisfactory considering current market situation 
- Strategy execution proceeding as planned
 
April-June 2016 in brief
  • Orders received decreased 7 percent and totalled EUR 825 (887) million.
  • Order book amounted to EUR 2,033 (31 Dec 2015: 2,064) million at the end of the period.
  • Sales declined 4 percent and totalled EUR 898 (936) million.
  • Operating profit excluding restructuring costs increased 12 percent and was EUR 64.8 (58.0) million, representing 7.2 (6.2) percent of sales.
  • Operating profit was EUR 62.6 (54.9) million, representing 7.0 (5.9) percent of sales.
  • Cash flow from operations before financial items and taxes totalled EUR 55.8 (101.3) million.
  • Net income for the period amounted to EUR 40.4 (27.4) million.
  • Earnings per share was EUR 0.63 (0.43).
 
January-June 2016 in brief
  • Orders received decreased 5 percent and totalled EUR 1,728 (1,826) million.
  • Sales declined 5 percent and totalled EUR 1,727 (1,825) million.
  • Operating profit excluding restructuring costs increased 12 percent and was EUR 123.3 (110.3) million, representing 7.1 (6.0) percent of sales.
  • Operating profit was EUR 120.2 (106.2) million, representing 7.0 (5.8) percent of sales.
  • Cash flow from operations before financial items and taxes totalled EUR 146.6 (152.8) million.
  • Net income for the period amounted to EUR 79.6 (63.9) million.
  • Earnings per share was EUR 1.23 (0.99).
 
 
Outlook for 2016 unchanged
Cargotec's 2016 sales are expected to be at the 2015 level (EUR 3,729 million) or slightly below. Operating profit excluding restructuring costs for 2016 is expected to improve from 2015 (EUR 230.7 million). 
 
Cargotec's key figures
MEUR 4-6/2016 4-6/2015 Change 1-6/2016 1-6/2015 Change 2015
Orders received 825 887 -7% 1,728 1,826 -5% 3,557
Order book, end of period 2,033 2,342 -13% 2,033 2,342 -13% 2,064
Sales 898 936 -4% 1,727 1,825 -5% 3,729
Operating profit* 64.8 58.0 12% 123.3 110.3 12% 230.7
Operating profit, %* 7.2 6.2   7.1 6.0   6.2
Operating profit 62.6 54.9 14% 120.2 106.2 13% 213.1
Operating profit, % 7.0 5.9   7.0 5.8   5.7
Income before taxes 57.5 46.3   108.3 93.8   186.2
Cash flow from operations 55.8 101.3   146.6 152.8   314.6
Net income for the period 40.4 27.4   79.6 63.9   142.9
Earnings per share, EUR 0.63 0.43   1.23 0.99   2.21
Net debt, end of period 619 735   619 735   622
Gearing, % 45.5 56.9   45.5 56.9   46.4
Personnel, end of period 11,422 10,730   11,422 10,730   10,837
 
*excluding restructuring costs
 
 
Cargotec's CEO Mika Vehviläinen:
Our business developed favourably during the second quarter. Orders for Kalmar decreased slightly from the comparison period's level, while Hiab's order intake grew eight percent from the comparison period. It was pleasing to see service orders increase 12 percent compared to the comparison period. Profitability continued to improve in Kalmar and Hiab compared to the previous year. On the other hand, the market situation in MacGregor remained challenging. At MacGregor we have already begun implementing new measures to lower our cost level through actions taken primarily in Norway as well as by merging two divisions.
 
The execution of our strategy published at the end of 2015 is proceeding in all three focus areas: services, digitalisation and leadership development. Business areas have continued their service development efforts during the quarter, and we have increased resources for digitalisation initiatives. For example, we launched the first products based on our common Cargotec IoT Cloud, a shared connectivity and analytics platform for all our businesses, through which we can provide more efficient analytics to our customers based on equipment data. The INTERSCHALT integration is proceeding as planned and we are getting positive customer feedback about the combined offering of XVELA's maritime industry software and the INTERSCHALT software. Our internal leadership development programme was launched during the last quarter and has gone forward according to plans.
 
Alternative performance measures (APMs) used in Cargotec's financial reporting
 
New ESMA (European Securities and Markets Authority) guidelines on Alternative
Performance Measures (Alternative performance measure (APM) = financial measure other
than financial measure defined or specified in IFRSs) are effective as of 3 July 2016. The new guidelines have had no impact on performance measures used by Cargotec, but in accordance with the guidelines, Cargotec publishes the explanation of use, definitions as well as reconciliations of its APMs to IFRS financial statements.
 
APMs are used at Cargotec to better convey the underlying business performance and to enhance comparability from period to period. APMs are not substituting the performance measures stipulated by IFRS, but are instead reported as complementary information.
 
The alternative performance measures used by Cargotec are:
  • Operating profit excluding restructuring costs= Operating profit + restructuring costs
  • Operating profit excluding restructuring costs, % of sales = (Operating profit + restructuring costs) / Sales * 100
  • Interest-bearing net-debt = Interest-bearing debt - interest-bearing assets +/- Foreign-currency hedge of corporate bonds
Restructuring costs include restructuring provisions, asset impairments and disposals, expenses for vacant premises and other restructuring-related expenses in case of a significant restructuring programme of Cargotec or its business area. In the interim report, the reconciliation of operating profit excluding restructuring costs to operating profit of the statement of income is presented in note 3. Reconciliation of interest-bearing net debt to interest-bearing liabilities and assets is presented in note 6.
 
Press conference for analysts and media
A press conference for analysts and media, combined with a live international telephone conference, will be arranged on the publishing day at 2:00 p.m. EEST at Cargotec's head office, Porkkalankatu 5, Helsinki. The event will be held in English. The report will be presented by CEO Mika Vehviläinen and Executive Vice President, CFO Mikko Puolakka. The presentation material will be available at www.cargotec.com by 2:00 p.m. EEST.
 
The telephone conference, during which questions may be presented, can be accessed using the following numbers with access code Cargotec/101647:
FI: +358 9 6937 9590 
SE:  +46 8 5033 6539
UK: +44 20 3427 1914
US: +1 646 254 3364
 
The event can also be viewed as a live webcast at www.cargotec.com. An on-demand version of the conference will be published at Cargotec's website later during the day.
 
 
For further information, please contact:
Mikko Puolakka, Executive Vice President and CFO, tel. +358 20 777 4105
 
Cargotec (Nasdaq Helsinki: CGCBV) is a leading provider of cargo and load handling solutions with the goal of becoming the leader in intelligent cargo handling. Cargotec's business areas Kalmar, Hiab and MacGregor offer products and services that ensure our customers a continuous, reliable and sustainable performance. Cargotec's sales in 2015 totalled approximately EUR 3.7 billion and it employs over 11,000 people. www.cargotec.com

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