Cargotec reports strong performance continues in core businesses
In its interim report from July to September 2022 Cargotec was able to disclose an all time high comparable operating profit and increased orders in all business areas. The company anticipates that supply chain challenges and market uncertainties will continue.
Orders received increased by 16% and totalled 1147 million euros and the order book amounted to 3732 million euros at the end of the period. Sales increased by 27% to 1041 million euros with eco portfolio sales representing 27% of consolidated sales. The eco portfolio sales increased by 97% in all and totalled 276 million euros.
Cargotec’s CEO Mika Vehviläinen said, “Yet another record quarter, determined steps in executing our refocused strategy. The performance of the core businesses of our refocused strategy, Hiab and new Kalmar, continued to be strong also in the third quarter. Following this, we made record results in comparable operating profit, order book, sales and services sales. I am particularly pleased that the comparable operating profit margin of the core businesses was about 11% when the reported comparable operating profit margin was slightly below 9.
Our third quarter comparable operating profit was an all-time high, and the combined comparable operating profit for the three first quarters was as much as 12 million euros higher than the whole of last year. We are, therefore, specifying our outlook for the rest of the year: we expect the comparable operating profit for 2022 to improve to 320–350 million euros from 232 million in 2021 euros.
Orders received increased in all businesses. Our order book reached yet another record, increasing by 38% from the comparison period and 4% from the previous quarter. Component shortages, delays in truck deliveries as well as global logistics challenges still limited our ability to fully respond to demand, but we managed to increase our sales by 27% from the comparison period. The general cost increases are affecting us as well, but we have mostly been able to transfer the increased costs to our prices.
“The performance of our service business during the third quarter was excellent. Sales were at an all-time high level and service orders received increased by 20% from the comparison period. The utilisation of our connected equipment remained on a high level and supported spare parts sales which, among other things, explains the good development.
“We have been executing our refocused strategy now for six months. Going forward, we will focus on sustainability and profitable growth in Hiab and in Kalmar mobile equipment and exit from Kalmar’s heavy cranes business. We announced in July that Kalmar is planning to transfer heavy cranes related intellectual properties and assets to Rainbow Industries Co. Ltd. in China. The process is at its final stages with the transfer of the last assets presently ongoing.
“In accordance with our strategy, we have also evaluated our operating model for it to serve the refocused company in the best possible way. Based on the evaluation, we will increase the independence of our business areas even further. As an example, tasks related to sourcing and information management are planned to be transferred from the group level to businesses. Cargotec’s centralised work in the field of digitalisation has been successful. As per our new operating model, this work transfers to business areas in its entirety. Increasing the independence of the business areas speeds up decision-making and our operational capabilities, and improves our customer centricity even further.
“In March, we announced the evaluation of strategic options of MacGregor including also a potential sale of the business. The evaluation is still ongoing.
“Our investments in developing sustainable offering are producing results. Our eco portfolio sales almost doubled from the comparison period, constituting 27% of the consolidated sales. The number of orders for Kalmar’s hybrid straddle and shuttle carriers has exceeded 500 worldwide. When comparing these hybrid devices to conventional ones, more than 400,000 tonne CO2 emission reductions are achieved over the life cycle, which corresponds to annual emissions of 174,000 passenger cars. We continue our strong investments in product development. As an example, during the quarter Hiab introduced the world’s first hooklift made mostly from fossil-free steel.
“Cargotec’s Capital Markets Day will be held on 15 November with the possibility to attend both on location in Helsinki, Finland, as well as online. The event focuses on our refocused strategy, core businesses Hiab and Kalmar as well as future shareholder potential. We welcome the analysts and investors to hear and discuss Cargotec’s business now and in the future.