IR Blog: Frequently asked questions about Cargotec's Q1/2024 result

What is your outlook for 2024?
Our outlook remains unchanged. Cargotec estimates Hiab’s comparable operating profit margin in 2024 to be above 12 percent, Kalmar’s comparable operating profit margin in 2024 to be above 11 percent, and
MacGregor’s comparable operating profit in 2024 to improve from 2023 (EUR 33 million).

Please explain the terms “continued operations” and “discontinued operations” used in the Q1 report
Due to the proposed demerger, as of the first quarter of 2024, Kalmar business area is reported as discontinued operations in Cargotec’s financial reporting. The segment reporting is unchanged. For more information, please refer to the 8 April 2024 release, and Note 17, Discontinued operations in the Q1 2024 report.

Why did Hiab’s orders received largely remain on the comparison period level at EUR 386 million?
The demand for Hiab’s solutions has been on a stable level already for the sixth quarter in row. High interest rates continued to drive delayed decision making.

What was Hiab’s order book?
Hiab’s order book decreased by 4 percent from the end of 2023, totalling EUR 770 (31 Dec 2023: 799) million at the end of the first quarter.

Why did Hiab’s sales decrease by 4 percent from the comparison period to EUR 415 million?
The decline in Hiab’s sales reflects a lower order book.

Why did Hiab’s Q1 comparable operating profit increase to EUR 69 (61) million?
Hiab’s comparable operating profit increased due to successful management of inflationary pressures and tight cost control.

Why did Kalmar’s orders received decrease by 15 percent to EUR 402 million?
Demand was stable for the third quarter in a row. Demand for Kalmar’s mobile equipment used in industrial operations and small- and mid-sized terminals remained good. We continue to see delayed decision making in larger orders.

What was Kalmar’s order book?
Kalmar’s order book decreased by 5 percent from the end of 2023, totalling EUR 971 (31 Dec 2023:1,024) million at the end of the first quarter.

Why did Kalmar’s sales decrease by 10 percent from the comparison period to EUR 439 million?
Kalmar’s sales were impacted by lower order intake during the latter half of 2023.

Why did Kalmar’s Q1 comparable operating profit margin increase to 13.5 (13) percent?
Kalmar’s comparable operating profit amounted to EUR 59 (63) million. The comparable operating profit margin increased due to fixed cost saving actions offsetting the lower sales.

Why did MacGregor’s orders received increase by 29 percent to EUR 267 million?
The merchant ship segment is facing a continuing strong market momentum. MacGregor also gained one major order of about EUR 50 million during the quarter.

What was MacGregor’s order book?
MacGregor’s order book increased by 4 percent from the end of 2023, totalling EUR 1,028 (31 Dec 2023: 988) million at the end of the first quarter.

Why did MacGregor’s comparable operating profit increase from EUR 1 million to EUR 12 million in Q1?
Comparable operating profit increased due to higher sales in the merchant business.

How much was the effect of currencies and structural changes in your orders received and sales?
In the first quarter of 2024, orders received increased organically in constant currencies by 13 percent in continuing operations. Changes in exchange rates had a 1 percentage point negative effect on continuing operations' orders received. Structural changes had a -1 percentage point impact on continuing operations' orders received. In constant currencies, sales increased organically by 7 percent in continuing operations. Changes in exchange rates had a 1 percentage point effect and structural changes a -1 percentage point effect on continuing operations' sales.

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

What does the operation environment look like?
The business environment in which Cargotec's businesses Hiab, Kalmar and MacGregor operate is complex, stemming from high interest rates and inflation, growing geopolitical tensions, and sluggish growth estimates. However, many of our customers and partners are performing well.

What was your operative cash flow in Q1 2024?
Cash flow from operating activities before finance items and taxes totalled EUR 174 (26) million during January–March including both continuing and discontinued operations. The increase in cash flow was driven by good profitability in all business areas and reduction of net working capital in Kalmar and MacGregor.

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 announced on 1 February 2024 that the The Board of Directors of Cargotec has approved a demerger plan concerning the separation of Kalmar into a new listed company. The demerger is subject to approval by the Annual General Meeting of Cargotec to be held on 30 May 2024. The planned completion date of the demerger is 30 June 2024. Certain shareholders, representing approximately 41 percent of the shares and approximately 75 percent of the votes in Cargotec, have already indicated their support for the proposed demerger.

The demerger and listing prospectus, which is expected to be published by Cargotec in May 2024 before the Annual General Meeting, will contain more detailed information on the demerger and Kalmar. The demerger plan is attached to the stock exchange release published by Cargotec on 1 February 2024 a,d is also available from the Demerger page.

How much demerger costs have you booked so far? What is your estimate for 2024?
In the first quarter of 2024, costs related to the planned separation of Kalmar and Hiab amounted to EUR 16 (0) million. Of the costs, EUR 8 million is booked in Kalmar and EUR 7 million in corporate administration and support functions. Costs are reported as part of discontinued operations. For the year 2024, Cargotec estimates to book approximately EUR 65 million for costs related to the planned separation of Kalmar and Hiab. The estimate may be subject to change. In 2023, costs related to the planned separation of Kalmar and Hiab amounted to EUR 28 million.