Cargotec Reduces Full Year Guidance and Restructures Operations
Stock Exchange Release, September 18, 2008 at 10:00 a.m. Finnish time
Cargotec reduces its full year profitability guidance given in July. Full year 2008 operating margin is expected to be lower than previous year’s 7.3% margin from operations. Earlier Cargotec guided for below 8% but higher than 7.3% operating margin for full year 2008. Order intake has continued strong in Kalmar and MacGREGOR. Cargotec’s expectation for 2008 sales growth remains unchanged with growth weighted on the fourth quarter.
Due to a weakened market situation in Europe and US Hiab’s order intake is estimated to be lower than expected, mainly in construction related customer segments. This will affect negatively the utilization rate of the factories and profitability in the second half of the year. Hiab’s profitability during the rest of the year will also be weakened by a slower and more expensive than expected start-up of the component factory in Narva, Estonia. Kalmar will, in the third quarter, book a EUR 5 million provision related to cost overruns in ship-to-shore crane orders received in year 2006 and 2007.
Hiab’s operating margin in the second half of the year is expected to be weaker than in the first half. Kalmar’s and MacGREGOR’s full year operating margins are still expected to improve from the previous year. Due to the delivery schedules, the improvement will be weighted on the fourth quarter.
As a result of weaker profitability, Cargotec will initiate restructuring measures mainly in mature markets. The measures are estimated to affect some 700 people. The measures will aim to improve Hiab’s and Kalmar’s profitability and to adjust capacity in Hiab to the prevailing market situation. More information about the measures and their cost impact in Hiab’s and Kalmar’s results stated above will be communicated by the end of October. Cargotec continues, according to earlier announcements, the On the Move change programme aiming at developing the way of working and the global supply footprint. The actions target to achieve Cargotec’s profitability target by 2011.
Mikael Mäkinen, President and CEO, tel. +358 (0)204 55 4262
Eeva Sipilä (formerly Mäkelä), CFO, tel. +358 (0)204 55 4281
Paula Liimatta, IR Manager, tel. +358 (0)204 55 4634
Cargotec improves the efficiency of cargo flows by offering handling systems and the related services for the loading and unloading of goods. Cargotec’s brands, Hiab, Kalmar and MacGREGOR, are global market leaders in their fields and their solutions are used on land and at sea – wherever cargo is on the move. Extensive services close to customers ensure the continuous usability of equipment. Cargotec is the technology leader in its field, its R&D focusing on innovative solutions that take environmental considerations into account. Cargotec’s sales exceed EUR 3 billion and the company employs approximately 12,000 people. Cargotec’s class B shares are quoted on the OMX Nordic Exchange Helsinki.