Cargotec Corporation, Stock Exchange Release, October 20, 2008 at
12:00 p.m. Finnish time
* Cargotec's restructuring measures announced in September are
estimated to lead to annual cost savings of EUR 25 million. The
plan affects some 700 people. The savings actions are expected to
result in costs and asset write downs of approximately EUR 35
million.
* Orders received during January-September 2008 totalled EUR 3,136
(2,892) million. During the third quarter, orders received were
EUR 967 (1,028) million.
* The order book continued to strengthen, reaching EUR 3,486
(December 31, 2007: 2,865) million at the end of the reporting
period.
* Sales grew in January-September by 15 percent, amounting to EUR
2,476 (2,151) million with services sales representing 26 (25)
percent of total sales. Sales for the third quarter were EUR 848
(713) million.
* Operating profit for January-September was EUR 156.9 (156.8)
million with EUR 49.6 (52.5) million attributable to the third
quarter. Operating margin for January-September was 6.3 (7.3)
percent and 5.8 (7.4) for the third quarter.
* Cash flow from operating activities before financial items and
taxes totalled EUR 158.1 (138.8) million.
* Net income for the reporting period amounted to EUR 111.9 (109.5)
million.
* Earnings per share for January-September were EUR 1.77 (1.72).
* The number of personnel totalled 12,000 (December 31, 2007:
11,187) at the end of September.
* The market situation in the large project side of container
handling is healthy, and offers are at a high level. On the other
hand in construction related customer segments in Europe and the
US the market situation in load handling has further weakened
from September. The ship building market is evening out as
earlier expected. Order intake in the final quarter of the year
is according to earlier expectations expected to be below the
high level of previous quarters. Cargotec's 2008 sales growth is
expected to be approximately 13 percent. The growth rate in the
final quarter is likely to slow from January-September due to the
economic uncertainty and a possibility of project deliveries
being delayed. Operating margin for full year 2008 is estimated
to be at the January-September margin level. The margin estimate
is excluding the expected costs and asset write downs from
restructuring operations, in total approximately EUR 35 million.
Cargotec's President and CEO Mikael Mäkinen:"There is a significant amount of uncertainty related to the market
environment currently. Orders received have clearly decreased in Hiab
forcing us to take strong restructuring measures. In our other
businesses, order intake still exceeded our expectations. Kalmar's
profitability has, however, not improved at the expected rate.
Therefore also there we aim to restructure our operations to become
more competitive. Our strong financial position enables us to take
actions to improve our long-term profitability in this challenging
market situation."
Analyst and Press Conference
An analyst and press conference will be combined with a live
international telephone conference and arranged on October 20, 2008
at 2.00 p.m. Finnish time at Cargotec's head office, Sörnäisten
rantatie 23, Helsinki. The whole combined event will be held in
English. The interim report will be presented by Cargotec's President
and CEO Mikael Mäkinen. The presentation material will be available
on the Company's internet pages by 2.00 p.m. Finnish time.
The conference call phone numbers are the following:
+1 646 843 4608 (US callers)
+44 20 3023 4412 (non-US callers)
Access code: Cargotec Corporation
The telephone conference can also be viewed as a live audio webcast
through the internet pages at www.cargotec.com. The archived webcast
will be available on the internet pages later during the day.
For further information, please contact:
Eeva Sipilä, CFO, tel. +358 204 55 4281
Paula Liimatta, IR Manager, tel. +358 204 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 NASDAQ OMX Helsinki.
www.cargotec.com
Operating Environment
The markets for load handling equipment weakened during the third
quarter in Western Europe. The construction industry decline visible
in Southern Europe during the first half of 2008 expanded into the
rest of Western Europe lowering order intake in the third quarter. In
Asia Pacific, growth remained healthy, with the exception of Japan.
In the United States, demand for load handling equipment continued
weak.
The markets for container handling equipment remained healthy. The
markets for reachstackers, straddle carriers and rubber-tyred gantry
(RTG) cranes were especially active. Due to economic uncertainty,
demand for medium and light fork lift trucks as well as terminal
tractors in mature markets weakened towards the end of the third
quarter. Port operators' interest in automation remained strong.
Several automation projects are in simulation and planning phase.
The markets for marine cargo flow systems and offshore solutions
continued to be lively. Demand for ship cranes, hatch covers and
cargo securing systems remained high, reflecting strong demand for
equipment for bulk carriers and general cargo vessels. The turbulence
in the financial markets is expected to slow down new ship orders for
the remainder of the year. Container ship market weakened during the
third quarter. Demand for offshore solutions remained lively.
Demand for services remained favourable in the third quarter:
customers are increasingly interested in improving their operational
flexibility. In emerging markets, high usage rates of equipment
supported demand for services. Service demand in Europe remained
healthy. In the US, the further weakened economic environment
affected demand for services. Demand for marine cargo services was
supported by high activity in repair ship yards.
Orders Received
Orders received by Cargotec in January-September totalled EUR 3,136
(2,892) million. The value of orders secured during the third quarter
was EUR 967 (1,028) million.
Orders received, MEUR 1-9/2008 1-9/2007 1-12/2007
Hiab 661 731 985
Kalmar 1,217 1,083 1,429
MacGREGOR 1,264 1,080 1,696
Internal orders received -7 -3 -4
Total 3,136 2,892 4,106
Hiab
Of total orders received in January-September, Hiab accounted for EUR
661 (731) million while its share of orders received in
July-September was EUR 194 (223) million. Orders received have
declined as a result of a drop in demand in construction related
customer segments in the US and also in Western Europe during the
third quarter.
Hiab secured a large number of small individual orders, which is
typical of its operations. Demand for demountable systems continued
healthy, Hiab booking an order for 90 of such units during the second
quarter to be delivered to the United Kingdom's Ministry of Defence.
Furthermore, Hiab delivered demountables and deep waste collection
units to the Olympic Village in Beijing, China.
In September, Hiab received an order from BAE Systems Inc. in the US,
which specialises in the development, delivery and support of
advanced defence and aerospace systems. The order includes 428 loader
cranes and 32 hooklifts. A major part of the order was booked in the
third quarter. Delivery of the equipment will start during the fourth
quarter of 2008, with most of the deliveries taking place during
2009.
Kalmar
Of total orders received in January-September, Kalmar accounted for
EUR 1,217 (1,083) million while its share of orders received in
July-September was EUR 365 (324) million. A major part of the big
orders received will be delivered in 2009. Several orders include
navigation, container position verification and remote monitoring
systems developed by Kalmar. Order intake for reachstackers was on a
record high level during the third quarter.
During the third quarter, Kalmar booked a significant order for
E-One+ rubber-tyred gantry cranes (RTG) from South Africa. A total of
32 RTGs will be delivered to Transnet Port Terminal in Cape Town,
South Africa starting in the summer of 2009 with the last units
arriving in autumn 2010.
During the reporting period, Kalmar also received an order of seven
E-One+ rubber-tyred gantry caranes (RTG) and 10 reachstackers from
Indian Arshiya International. The delivery of this equipment is
scheduled to start at the end of 2008.
In June, Kalmar received an order for 30 terminal tractors, seven
E-One+ rubber-tyred gantry cranes (RTG) and five reachstackers from
Sociedad Portuaria Regional de Cartagena (SPRC) of Colombia. This
equipment will operate at SPRC's new Contecar terminal in Cartagena.
The smaller equipment is scheduled to be on-site by November, and the
RTGs will be operational by May 2009.
In May, Kalmar received an order for 30 straddle carriers from
Transnet Port Terminals (TPT) of South Africa. The deliveries to
TPT's container terminal in the Port of Durban began in the summer,
with the final units arriving in January 2009.
In March, Kalmar received an order for 48 EDRIVE® straddle carriers
for Eurogate's operations in Germany. A total of 22 units have been
ordered for Eurogate's CTB Bremerhaven container terminal, and 13
units will go to Eurogate's CTH Hamburg. Another 13 units will be
deployed at the MSC Gate Bremerhaven terminal, a joint venture
between Eurogate and Mediterranean Shipping Company. Equipment
deliveries began in the autumn with the last units arriving at the
beginning of 2009. In addition, Kalmar provided Steveco Oy with ten
Kalmar EDRIVE® straddle carriers for the Mussalo container terminal
in Kotka, Finland.
During the first quarter, Kalmar received E-One+ rubber-tyred gantry
crane (RTG) orders from, for example, Vietnam, Thailand, India,
Brazil and Morocco. Kalmar will deliver 17 of these cranes to Vietnam
International Container Terminals' Ho Chi Minh City facility between
2008 and 2010. LCMT Company Ltd. from Thailand ordered six RTGs for
its terminal at the Port of Laem Chabang. The cranes are due to for
delivery by March 2009. Kalmar will also deliver 11 RTGs to Gateway
Terminals India at Nhava Sheva in January 2009. South America's
largest container terminal operator, Santos Brasil S/A, ordered 12
RTGs for delivery by March 2009. Furthermore, Somaport operating in
the port of Casablanca, Morocco, ordered ten RTGs to be delivered in
early 2009.
In February, Kalmar received an order for 22 E-One+ rubber-tyred
gantry cranes (RTGs) from South African Transnet Limited. This
equipment will be delivered in 2008-2009 for the new Port of Ngqura.
In February, Kalmar also secured an order from the Port of Tacoma on
the US West Coast for the supply of seven straddle carriers. These
will be used in container handling in on-dock rail facilities and
will be equipped with Kalmar's monitoring system, speeding up their
operation. Delivery of the machines is scheduled for the autumn of
2008.
MacGREGOR
Of total orders received during the reporting period, MacGREGOR
accounted for EUR 1,264 (1,080) million while its share of orders
received in July-September was EUR 411 (483) million. Orders received
were still on a high level reflecting the high volumes in ship orders
during early 2008.
During the third quarter, MacGREGOR received significant hatch cover,
ship crane and RoRo equipment orders from Korea, Singapore, China and
Japan. A total of 39 hatch covers will be delivered for container
ships. An order of new ship cranes and hatch covers for four
heavy-lift vessels was received from Singapore. RoRo equipment and
hoistable car decks will be delivered for 16 pure car/truck carriers
in 2009-2011.
In August, the Offshore division received a major order for two
active heave compensated offshore cranes from a Finnish Finstaship.
The cranes will delivered during the second half of 2010.
During the second quarter, MacGREGOR obtained extensive hatch cover
and RoRo equipment orders, mainly from Korea and Japan. The hatch
cover orders are for a large number of container and bulk vessels to
be delivered in 2009-2012. The RoRo equipment orders include the
design and manufacture of RoRo equipment as well as hoistable car
decks for four deep-sea ConRos (vessels carrying both container and
RoRo cargo). The equipment will be delivered in 2010-2011.
In June, MacGREGOR signed a contract to supply self-loading and
unloading cement handling systems for three cement carriers.
Deliveries of the systems will begin during summer 2009.
In May, the Offshore division received a crane order from the
US-based Edison Chouest Offshore, its third within 18 months. The
cranes will be delivered by the first quarter of 2009. Furthermore, a
large number of orders were received, in particular for davits, for
delivery during 2008-2009.
During the first quarter, MacGREGOR received a large number of ship
crane and hatch cover orders, mainly from China and Korea. MacGREGOR
will deliver a total of 276 bulk handling cranes for vessels, to be
delivered to ship owners in Germany, Singapore, China and Korea.
MacGREGOR also agreed to deliver hatch covers for 70 container
vessels, 120 bulk vessels and 41 general cargo ships. The equipment
will be delivered in 2009-2011.
In March, MacGREGOR received a major bulk handling equipment order
from the Taiwan Power Company for coal-handling equipment.
MacGREGOR's Siwertell bulk handling system features a totally closed
conveying system that limits the amount of cargo dust released into
the air.
In March, MacGREGOR also received an order for 30 shipsets of tanker
cranes for a Chinese shipyard. Provision and hose handling cranes
will be delivered in 2008-2010 for tankers ordered by Turkish,
Norwegian, Russian and Cypriot ship owners.
In January, MacGREGOR received RoRo equipment orders for 12 pure
car/truck carriers (PCTCs). These orders include hoistable car decks
for four vessels that will be built in the Korean Hyundai Heavy
Industries shipyard and delivered during 2009-2010. Additionally, the
orders include the design and delivery of key components for eight
PCTCs under construction in China.
Cargotec Services
The services market continued to be active, which was reflected in
the number of maintenance and modernisation contracts as well as
spare part orders received. Maintenance contracts were received from
European as well as emerging market customers in for example India,
Russia and Africa. Cargotec continued to enhance its service network.
The market for ship conversions was very active and several orders
were received to be carried out during 2008-2009. However, the
economic uncertainty has slowed down demand recently. In September,
hatch cover conversion orders were received for four tankers
converted into bulkers from Everlast Shipping S.A. in Greece. These
new orders follow an earlier order received at the end of last year
from the same owner. Contracts received during May include one for
the supply of electrically driven hoistable car decks for Finnlines'
two RoRo vessels as well as a contract for the conversion of control
systems on a vessel.
In May, a five-year operation and maintenance contract for
rubber-tyred gantry cranes and reachstackers was signed with Arshiya
International in Mumbai, India and a three-year leasing and full
maintenance contract for reachstackers in the port of Gothenburg,
Sweden.
Additional contracts include from April a five-year full maintenance
contract on four ship-to-shore cranes that will be operated in the
port of Vuosaari, Finland. Another contract in the same port covers
the maintenance of straddle carriers, terminal tractors and
reachstackers.
In March, a five-year service contract was signed with the Norwegian
company, Norsteve Oslo, covering the maintenance, spare parts and
repairs of five straddle carriers at the Sjursøya container terminal
in the Port of Oslo.
During the first quarter, a major maintenance contract for ship
unloaders was received from the Philippines.
Order Book
Cargotec's order book totalled EUR 3,486 (December 31, 2007: 2,865)
million on September 30, 2008. Of the order book, Hiab accounted for
EUR 229 (260) million, Kalmar EUR 778 (660) million, and MacGREGOR
EUR 2,480 (1,946) million. An estimated over 80 percent of
MacGREGOR's order book will be delivered by the end of 2010.
Order book, MEUR 30.9.2008 30.9.2007 31.12.2007
Hiab 229 255 260
Kalmar 778 684 660
MacGREGOR 2,480 1,614 1,946
Internal order book -1 0 -1
Total 3,486 2,552 2,865
Sales
Cargotec's sales grew by 15 percent January-September and totalled
EUR 2,476 (2,151) million. Organic growth was 12 percent. This is a
result of increased delivery volumes in Kalmar and MacGREGOR.
Sales for the third quarter were EUR 848 (713) million. Hiab's sales
amounted to EUR 209 (202) million, Kalmar's EUR 386 (326) million and
MacGREGOR's EUR 256 (187) million.
Sales, MEUR 1-9/2008 1-9/2007 1-12/2007
Hiab 691 687 931
Kalmar 1,103 979 1,343
MacGREGOR 687 487 748
Internal sales -6 -2 -4
Total 2,476 2,151 3,018
Sales for services in January-September increased by 17 percent
year-on-year and amounted to EUR 639 (546) million, representing 26
(25) percent of total sales. This growth was boosted by strong demand
for spare parts and maintenance agreements. Services accounted for 23
(17) percent of January-September sales at Hiab, 29 (30) percent at
Kalmar, and 23 (27) percent at MacGREGOR.
Financial Result
Cargotec's operating profit for January-September 2008 totalled EUR
156.9 (156.8) million, representing 6.3 (7.3) percent of sales. The
operating profit includes a EUR 4.9 (4.6) million cost impact from
the purchase price allocation treatment of acquisitions and EUR 5
million in costs from the On the Move change programme.
Hiab's profitability for January-September was weakened by lower
demand, especially in the United States but also in some European
countries, increased raw material and component prices and the slower
and more expensive than expected ramp-up of the component factory in
Narva, Estonia. Kalmar's result was weakened by a EUR 4 million
project cost provision booked in the first quarter and a EUR 5
million project cost provision booked in the third quarter.
MacGREGOR's profitability development was in line with expectations.
The weakened market situation weighed on the third quarter result.
Due to this, planning of restructuring measures was initiated in
September. They are estimated to affect some 700 people. The measures
are aimed at adjusting capacity in Hiab to be in line with the
prevailing market situation and improving Hiab's and Kalmar's
profitability.
Operating profit for the third quarter was EUR 49.6 (52.5) million,
equal to 5.8 (7.4) percent of sales. Hiab accounted for EUR 9.5
(13.7) million of the third quarter operating profit, Kalmar for EUR
25.8 (27.8) million, and MacGREGOR for EUR 19.1 (15.0) million.
Net income for January-September was EUR 111.9 (109.5) million and
earnings per share EUR 1.77 (1.72).
Balance Sheet, Financing and Cash Flow
On September 30, 2008, Cargotec's net working capital increased to
EUR 285 (December 31, 2007: 253) million. The amount of capital tied
in components and unfinished products continued to increase. At the
same time, the amount of net working capital employed was positively
impacted by a further increase in the amount of advances received.
Tangible assets on the balance sheet were EUR 273 (254) million and
intangible assets EUR 777 (751) million.
Cash flow from operating activities before financial items and taxes
for January-September was EUR 158.1 (138.8) million. The dividend
payment in January-September totalled EUR 65.9 (63.9) million and
acquisitions amounted to EUR 40.4 (169.3) million. Net debt was EUR
389 (December 31, 2007: 304) million. The total equity/total assets
ratio was 35.3 (38.3) percent while gearing increased to 44.1 (33.9)
percent.
Cargotec's financing structure is healthy. Interest-bearing debt
consists mainly of long-term corporate bonds maturing from the year
2012. On September 30, 2008, Cargotec had EUR 635 million of unused
credit facilities.
Return on equity for January-September was 16.8 (16.7) percent and
return on capital employed was 15.1 (17.6) percent.
New Products and Product Development
In January-September, Cargotec's research and product development
expenditure was EUR 33.3 (33.2) million, representing 1.3 (1.5)
percent of sales.
In April, Cargotec opened an engineering centre in Pune, India,
providing engineering resources in emerging markets in support of
product development that better responds to local needs. The
engineering centre has been established as a resource pool for
Cargotec R&D centres around the world. It covers various engineering
activities from drafting to structural analysis as well as software
engineering. It is planned that the operation will involve over 50
persons by the end of the year.
In September, Hiab expanded its crane offering with a solution that
fulfils the new EU-standard and enables using truck-mounted cranes to
lift personnel baskets.
Hiab introduced a new automatic load covering system to be used with
demountable units when transporting waste and recycling materials.
During the first quarter, Hiab opened a state-of-the-art
crane-testing centre at its loader crane production facility in
Hudiksvall, Sweden. The centre offers Hiab and other business areas
the opportunity to test more and longer cranes and components as well
as ensuring that testing is more precise than before.
Earlier this year Kalmar launched the Pro Future(TM) concept
encompassing all of its environmentally friendly equipment. This
equipment will be rated against five ecological decision-making
drivers: source of power, energy efficiency, emissions, noise
pollution and recyclability.
During the third quarter, Kalmar introduced two new Pro Future(TM)
solutions: a variable speed rubber-tyred gantry crane and a variable
speed electric straddle carrier. Variable speed technology (VSG)
enables the engine and generator speed to be reduced to the optimum
level, enabling fuel savings and carbon dioxide emission cuts of up
to 10-15 percent compared to standard electric driven equipment. This
technology effectively meets end customer expectations due to its
reduction of fuel consumption and noise levels, its improvement of
engine life time cycles and the extra cost involved being lower than
for hybrid solutions. Additionally, an electric forklift truck was
launched in the medium lift range.
Earlier this year, Kalmar introduced two Pro Future(TM) solutions: an
AC electrical forklift truck for empty container handling and a
hybrid straddle carrier. The hybrid straddle carrier is the market's
first self-charging carrier which, thanks to its speed control,
energy storage and recycling technology, enables fuel savings and
carbon dioxide emission cuts of up to 25-30 percent compared to
standard straddle carriers. Kalmar received the first order for a
hybrid straddle carrier during the third quarter. During the
reporting period, Kalmar also introduced a new medium range terminal
tractor offering better ergonomics and driver comfort as well as
lower noise levels than earlier models.
During the first quarter, Kalmar launched a new, fully-automated
shuttle carrier that is able to pick, place and transport containers
between ship-to-shore (STS) and yard stacking cranes without a
driver. The new Kalmar Autoshuttle(TM) ensures the cost efficiency,
productivity and flexibility of port operations, particularly in the
very big ports of the future.
MacGREGOR continued to develop electronically operated cargo handling
solutions and a new ship crane control system. The Offshore division
focused on the development of deck equipment enabling the use of
cranes in difficult weather conditions and when operating in deep
waters. In September, MacGREGOR signed the first contract to deliver
totally electrically-driven sets of RoRo equipment to two pure
car/truck carriers.
In February, MacGREGOR signed an agreement with the US Navy on the
development of a ship-to-ship vehicle transfer system. With the help
of this system, large vehicles can be transferred from one ship to
another while the ships are in motion. The prototype of the system
will be delivered by the end of 2009.
Capital Expenditure
Cargotec's capital expenditure for January-September 2008, excluding
acquisitions and customer financing, totalled EUR 47.1 (38.0)
million. Investments in customer financing were EUR 26.0 (23.5)
million.
In April, Cargotec formed a subsidiary, Cargotec Port Security, to
develop enhanced container security solutions. Cargotec has been
exploring and investing in the area of radiation detection in
container security for the past two years. It has entered into an
exclusive global technical licensing agreement with the US-based
Innovative American Technology, and has successfully field tested
spreader-mounted radiation detection.
During the second quarter, Hiab initiated the extension of a tail
lift production plant in Oborniki, Poland. The project will be
completed during 2008. In Korea, Hiab is investing in a new painting
line at the loader cranes production unit. Another project was
finalised in Raisio, Finland, resulting in a major increase in the
production capacity of demountable systems due to the implementation
of a more competitive production process.
During the second quarter, Kalmar started to expand its production
facility for rough-terrain container handling equipment in Cibolo,
Texas, USA as well as initiating an expansion of capacity in Ipoh,
Malaysia for container spreaders. Investments in the first quarter
include expanding its presence in the Americas by opening a new sales
company in Mexico as well as a new service unit in Zeebrugge,
Belgium.
In March, MacGREGOR opened a new offshore equipment production unit
in Tianjin, China, approximately half of its production being
delivered to various parts of China. The new unit also enables
production optimisation and efficiency improvements in the offshore
production units of Norway and Singapore. Part of offshore cranes
production has been moved from Norway to Singapore to make room for
the increased production of bigger size cranes in Norway. The
additional capacity provided by the compnay's own investments as well
as investments made by its partners will play an important role in
the ongoing major increase in deliveries.
On the Move change programme
In January, Cargotec announced the launch of an extensive On the Move
change programme aiming at a profitability improvement of EUR 80-100
million. The change programme aims to form a basis for profitable
growth through improved customer focus and efficiency. The projects
in the first phase have focused on streamlining support functions and
company structure as well as initiating IT projects that improve
efficiency. The country structure streamlining started in Finland has
been expanded to several countries. In Finland and Sweden all
operations will be transferred to one company per country at the
year-end. These projects are, due to an accelerated timetable,
expected to incur costs of approximately EUR 10 million in 2008,
which is clearly more than expected in the beginning of the year.
In order to improve closeness to customers Hiab, Kalmar and MacGREGOR
have changed their structure towards more customer oriented
organizations during the reporting period.
During the third quarter, the focus was on developing the global
supply footprint closer to customers as well as towards lower cost
environments. To improve the supply chain, Cargotec is planning to
establish a new assembly factory in Poland mainly for Kalmar
equipment.
The first joint supply chain projects are proceeding in China and
Estonia. The production capacity in Shanghai, China will be doubled.
The expansion will include moving Hiab's assembly unit to the same
site as the existing Kalmar facility. The capacity and productivity
of the production unit in Narva, Estonia, acquired in 2007, are being
upgraded in order to meet increased component needs. Investments
initiated so far to expand Cargotec's global supply footprint are
expected to amount to close to EUR 50 million for 2008.
Acquisitions
During January-September, Cargotec completed seven acquisitions, of
which four were in Hiab's business area.
In order to strengthen its R&D capabilities, Cargotec acquired 60
percent of Idea Designing & Consulting S.r.l. in Massa, Italy. The
company employs ten people in product design.
In August, Kalmar signed an agreement to acquire Argentina-based
Equipos y Servicios para Terminales y Puertos SRL (ESTP). The company
has been appointed as Kalmar's dealer for Argentina, Uruguay and
Paraguay. In addition to new equipment distribution, the company
provides equipment commissioning, technical and spare part support,
and equipment repair and refurbishment in South America. The
company's sales in 2007 were close to EUR 1 million and it employs 17
people.
In June, Hiab concluded an agreement to acquire the business of a
long-term distributor of tail lifts in New Zealand. In addition to
tail lift sales, the business comprises installation, repairs,
maintenance and spare parts sales. The acquisition was closed in
July.
At the end of March, Hiab concluded an agreement to acquire the
operations of the South African company Bowman Cranes (Pty) Limited,
Hiab's long-term agent in the region. This company supplies, installs
and services truck-related load handling equipment. In 2007, its
sales were approximately EUR 18 million and it employs 70 people.
In February, Hiab signed an agreement to acquire 70 percent of the
operations of an Australian company, O'Leary's Material Handling
Services Pty Ltd., the leading supplier of tail lifts in Western
Australia. The company employs 24 people and had sales of
approximately EUR 2.6 million in 2007.
In February, Hiab also agreed to acquire UK-based Del Equipment (UK)
Limited and US-based Ultron Lift Corp. Both of these companies
manufacture tail lifts. The aggregate sales of the companies in 2007
were approximately EUR 23 million and the companies employ 164
persons.
In April, MacGREGOR signed an agreement to acquire US-based Platform
Crane Service, Inc (PCS). The sales of the company in 2007 totalled
USD 16 million and the company employs 105 persons.
Employees
On September 30, 2008, Cargotec employed 12,000 (September 30, 2007:
11,081) people, the year-on-year increase being attributable to the
acquisitions. Hiab employed 4,508 (4,405) people, Kalmar 4,777
(4,431), and MacGREGOR 2,548 (2,162).
Of Cargotec's total employees, 13 (14) percent were located in
Finland, 20 (22) percent in Sweden and 30 (30) percent in the rest of
Europe. North and South American personnel represented 11 (11)
percent, Asia Pacific 24 (22) percent and the rest of the world 2 (1)
percent of total employees.
Shares, Share Capital and Stock Options
Cargotec's share capital on September 30, 2008 totalled EUR
64,272,120. The share capital increased by EUR 51,747 during the
reporting period as a result of the subscription for class B shares
under Cargotec option rights. On September 30, 2008, the number of
listed class B shares totalled 54,746,031 while that of unlisted
class A shares totalled 9,526,089. At the end of the reporting
period, Cargotec held a total of 2,990,725 class B shares, which
corresponds to 4.7 percent of the total number of shares. Trading in
2005A stock options ended in March. The remaining 2005B stock options
may be used to subscribe for a further 136,890 class B shares,
thereby increasing Cargotec's share capital by EUR 136,890.
Market Capitalisation and Trading
The closing price of Cargotec's class B shares on September 30, 2008
was EUR 14.22. The average share price for January-September was EUR
25.47, the highest quotation being EUR 36.49 and the lowest EUR
14.05. In January-September, approximately 65 million Cargotec class
B shares were traded on the NASDAQ OMX Helsinki, corresponding to a
turnover of approximately EUR 1,665 million.
On September 30, 2008, the total market value of Cargotec class B
shares was EUR 736 million, excluding treasury shares held by the
Company. The period-end market capitalisation, in which unlisted
class A shares are valued at the average price of class B shares on
the last trading day of the reporting period, was EUR 889 million,
excluding treasury shares held by the Company.
Changes in Cargotec's Management
On February 1, 2008, Cargotec's Deputy CEO Kari Heinistö was
appointed to lead the On the Move change programme. He continues as a
member of the Executive Board and secretary to Cargotec's Board of
Directors. Eeva Sipilä (formerly Mäkelä) was appointed as Cargotec's
CFO as of February 1, 2008. She is responsible for accounting,
finance, risk management, investor relations and communications, and
will continue as a member of the Executive Board. Minna Karhu was
appointed as Vice President, Corporate Communications of Cargotec as
of February 1, 2008.
Decisions Taken at Cargotec Corporation's Annual General Meeting
Cargotec Corporation's Annual General Meeting (AGM) was held on
February 29, 2008 in Helsinki. The meeting approved the financial
statements and consolidated financial statements as well as granted
discharge from liability to the President and CEO and the members of
the Board of Directors for the accounting period January 1-December
31, 2007.
The AGM approved the Board's proposal of a dividend of EUR 1.04 for
each of the 9,526,089 class A shares and EUR 1.05 for the 52,789,559
outstanding class B shares.
The number of members of the Board of Directors was confirmed at six
according to the proposal of the Board's Nomination and Compensation
Committee. Henrik Ehrnrooth, Tapio Hakakari, Ilkka Herlin, Peter
Immonen, Karri Kaitue and Antti Lagerroos were elected as members of
the Board of Directors.
Authorised public accountants Johan Kronberg and
PricewaterhouseCoopers Oy were re-elected as auditors according to
the proposal of Audit Committee of Cargotec's Board of Directors.
In addition, the AGM resolved to amend the Articles of Association
mainly due to and to align with the new Finnish Companies Act
effective as from 2006.
Authorisations Granted by the Annual General Meeting
The AGM authorised the Board of Directors of Cargotec to decide on
acquisition of the Company's own shares with non-restricted equity.
The shares may be acquired in order to develop the capital structure
of the Company, finance or carry out possible acquisitions, implement
share-based incentive plans, or to be transferred for other purposes
or to be cancelled. The shares may be acquired through a directed
acquisition as defined in Finnish Companies Act, Chapter 15 § 6.
Altogether no more than 6,400,000 own shares may be purchased, of
which no more than 952,000 are class A shares and 5,448,000 are class
B shares. The above-mentioned amounts include the 1,904,725 class B
shares in the Company's possession on the AGM date, which were
purchased during 2005-2007. The proposed amount corresponds to less
than 10 percent of the share capital of the Company and the total
voting rights. The acquisition of own shares will decrease the
non-restricted equity. The authorisation is in effect for a period of
18 months from the date of decision of the AGM.
In addition, the AGM authorised the Board of Directors to decide on
transfer of treasury shares. The Board of Directors was authorised to
decide to whom and in which order the treasury shares will be
transferred. The Board of Directors may decide on the transfer of
treasury shares otherwise than in proportion to the existing
pre-emptive right of shareholders to purchase the Company's own
shares. The treasury shares may be used as compensation in
acquisitions and in other arrangements as well as to implement the
Company's share-based incentive plans in the manner and to the extent
decided by the Board of Directors. The Board of Directors has also
the right to decide on the transfer of the shares in public trading
at the NASDAQ OMX Helsinki to be used as compensation in possible
acquisitions. This authorisation is in effect for a period of 18
months from the date of decision of the AGM.
Organisation of the Board of Directors
Cargotec's Board of Directors in its organising meeting elected Ilkka
Herlin to continue as Chairman of the Board and Henrik Ehrnrooth to
continue as Deputy Chairman. Cargotec's Deputy CEO Kari Heinistö
continues to act as secretary to the Board of Directors. Cargotec's
Board of Directors decided that the Audit Committee, Nomination and
Compensation Committee as well as Working Committee continue to
assist the Board in its work.
The Board of Directors elected among its members Ilkka Herlin, Karri
Kaitue and Antti Lagerroos as members of the Audit Committee. Karri
Kaitue was re-elected as Chairman of the Audit Committee. Board
members Henrik Ehrnrooth, Tapio Hakakari, Ilkka Herlin and Peter
Immonen were elected to the Nomination and Compensation Committee.
Ilkka Herlin was re-elected as chairman of the Nomination and
Compensation Committee. Board members Tapio Hakakari, Ilkka Herlin
and Peter Immonen were elected to the Working Committee. Ilkka Herlin
was re-elected as chairman of the Working Committee.
Share Repurchases
Cargotec's Board of Directors decided to exercise the authorisation
of the AGM to acquire the Company's own shares.
In accordance with the authorisation the shares will be acquired in
order to develop the capital structure of the Company, finance or
carry out possible acquisitions, implement share-based incentive
plans, or to be transferred for other purposes or to be cancelled.
Class B shares will be purchased at public trading in the NASDAQ OMX
Helsinki at the market price. Class A shares will be purchased
outside the Stock Exchange at the price equivalent to the average
price of class B shares paid in the NASDAQ OMX Helsinki on the
purchase date.
A total of 1,086,000 own shares were repurchased following the AGM
and until the end of September 2008 at an average price of EUR 21.73.
Cargotec held a total of 2,990,725 class B shares on September 30,
2008.
Short-term Risks and Uncertainties
The global economic environment is in a state of major uncertainty.
Financial market turbulence has increased short-term risks and its
impacts on investment activity are difficult to predict. Cargotec
considers that its principal short-term risks and uncertainties
relate to global economic development and its impact on customer
demand.
There is an increased risk that the economic uncertainty will spread
into general investment activity, which would affect demand for
Cargotec equipment. Lack of financing may defer customers' investment
decisions or lead to order cancellations. Furthermore, the financial
situation of customers and suppliers has an impact on collecting
receivables and the amount of credit losses.
Weaker demand will increase the need for the company to adjust its
operations. Profitability may be negatively affected if the speed at
which demand decreases is faster than the rate at which restructuring
measures can be implemented.
The availability of components has slightly improved and pricing
pressures have eased. However, there is still a risk that these may
create extra costs or delay deliveries.
Restructuring program
As a result of lower demand and profitability Cargotec announced in
September that it would initiate restructuring measures, mainly in
Western Europe and North America, affecting some 700 people. The
measures are aimed at adjusting capacity in Hiab to the prevailing
market situation and improving Hiab's and Kalmar's profitability. The
main need for measures planned to affect personnel is in Finland,
Sweden and USA. Finland is estimated to account for close to 300
people.
In order to adjust Hiab's capacity, a plan has been drawn to
consolidate crane manufacturing capacity in Europe into three
factories. According to the plan manufacturing would cease in the
Salo factory in Finland. Alternative solutions for the Salo factory
are being investigated. In addition, Hiab's manufacturing operations
at the truck-mounted forklift unit in Ohio, USA will be closed and
manufacturing will be consolidated to a joint Cargotec production
unit in Kansas.
The savings actions aim, in addition to adjusting capacity, at an
annual result improvement of approximately EUR 25 million. The
savings actions are expected to result in costs and asset write downs
of approximately EUR 35 million.
Outlook
The market situation in the large project side of container handling
is healthy, and offers are at a high level. On the other hand in
construction related customer segments in Europe and the US the
market situation in load handling has further weakened from
September. The ship building market is evening out as earlier
expected. Order intake in the final quarter of the year is according
to earlier expectations expected to be below the high level of
previous quarters.
Cargotec's 2008 sales growth is expected to be approximately 13
percent. The growth rate in the final quarter is likely to slow from
January-September due to the economic uncertainty and a possibility
of project deliveries being delayed.
Operating margin for full year 2008 is estimated to be at the
January-September margin level. The margin estimate is excluding the
expected costs and asset write downs from restructuring operations,
in total approximately EUR 35 million.
Financial calendar
Financial Statements Review January-December 2008 on Monday February
2, 2009
Helsinki, October 20, 2008
Cargotec Corporation
Board of Directors
This interim report is unaudited.
Cargotec's Interim Report January-September 2008
Condensed Consolidated Income Statement
MEUR 7-9/2008 7-9/2007 1-9/2008 1-9/2007 1-12/2007
Sales 848.4 713.4 2,475.7 2,150.7 3,018.2
Cost of goods
sold -688.6 -562.0 -1,981.9 -1,687.6 -2,376.8
Non-recurring
items * - - - - -18.0
Gross profit 159.8 151.3 493.7 463.1 623.4
Gross profit,
% 18.8 % 21.2 % 19.9 % 21.5 % 20.7 %
Costs and
expenses -95.7 -84.6 -294.6 -266.8 -360.8
Depreciation -14.6 -14.3 -42.3 -39.7 -59.8
Share of
associated
companies'
and joint
ventures'
income 0.0 0.1 0.0 0.2 0.3
Operating
profit 49.6 52.5 156.9 156.8 203.1
Operating
profit, % 5.8 % 7.4 % 6.3 % 7.3 % 6.7 %
Financing
income and
expenses -3.8 -4.3 -15.0 -12.1 -18.7
Income before
taxes 45.8 48.2 141.8 144.7 184.4
Income before
taxes, % 5.4 % 6.8 % 5.7 % 6.7 % 6.1 %
Taxes -4.0 -13.6 -30.0 -35.2 -46.0
Net income
for the
period 41.7 34.6 111.9 109.5 138.4
Net income
for the
period, % 4.9 % 4.9 % 4.5 % 5.1 % 4.6 %
Net income
for the
period
attributable
to:
Equity
holders of
the Company 41.0 34.3 109.9 108.8 136.5
Minority
interest 0.8 0.3 2.0 0.7 1.8
Total 41.8 34.6 111.9 109.5 138.4
Earnings per
share for
profit
attributable
to the equity
holders of
the Company:
Basic
earnings per
share, EUR 0.66 0.55 1.77 1.72 2.17
Diluted
earnings per
share, EUR 0.66 0.55 1.77 1.72 2.16
* Kalmar business area related container spreader inspection and
repair programme
Condensed Consolidated Balance
Sheet
ASSETS
MEUR 30.9.2008 30.9.2007 31.12.2007
Non-current assets
Intangible assets 776.7 754.8 751.2
Tangible assets 272.9 254.9 253.7
Loans receivable and other
interest-bearing assets 1) 6.6 2.2 5.5
Investments 8.7 4.1 7.2
Non-interest-bearing assets 93.7 64.5 76.4
Total non-current assets 1,158.7 1,080.5 1,094.0
Current assets
Inventories 885.8 660.1 657.4
Loans receivable and other
interest-bearing assets 1) 0.3 0.4 0.4
Accounts receivable and other
non-interest-bearing assets 737.0 574.2 651.9
Cash and cash equivalents 1) 121.9 94.0 179.0
Total current assets 1,745.2 1,328.8 1,488.7
Total assets 2,903.9 2,409.2 2,582.6
EQUITY AND LIABILITIES
MEUR 30.9.2008 30.9.2007 31.12.2007
Equity
Shareholders' equity 874.1 871.6 890.6
Minority interest 7.8 5.2 6.1
Total equity 881.9 876.7 896.7
Non-current liabilities
Loans 1) 438.5 408.3 433.3
Deferred tax liabilities 33.3 35.8 38.5
Provisions 41.9 21.8 38.4
Pension benefit and other
non-interest-bearing liabilities 99.2 67.1 103.3
Total non-current liabilities 612.9 533.0 613.6
Current liabilities
Loans 1) 79.2 53.0 55.1
Provisions 53.9 45.0 70.8
Accounts payable and other
non-interest-bearing liabilities 1,276.0 901.5 946.5
Total current liabilities 1,409.1 999.5 1,072.4
Total equity and liabilities 2,903.9 2,409.2 2,582.6
1) Included in interest-bearing
net debt
Consolidated Statement of Changes in Equity
Attributable to the equity holders of
the company
Sha- Share Trans- Fair Mino-
re pre Trea- lation value Retai- rity
capi- mium sury diffe- reser- ned inte- Total
MEUR tal account shares rences ves earnings Total rest equity
Equity on
31.12.2006 64.0 96.0 -23.9 -12.0 10.5 734.2 868.8 8.0 876.8
Gain/
loss
on cash
flow
hedges
booked
to
equity * 12.0 12.0 12.0
Gain/
loss
on cash
flow
hedges
trans-
ferred
to IS -3.7 -3.7 -3.7
Translation
differences -14.1 -14.1 -0.5 -14.5
Net
income
recog-
nised
directly
in
equity - - - -14.1 8.3 - -5.8 -0.5 -6.2
Net
income
for the
period 108.8 108.8 0.7 109.5
Total
recog-
nised
income
and
expenses
for the
period - - - -14.1 8.3 108.8 103.0 0.2 103.3
Divi-
dends
paid -63.2 -63.2 -0.4 -63.6
Shares
subscribed
with
options 0.1 0.7 0.8 0.8
Acqui-
sition
of treasury
shares -39.2 -39.2 -39.2
Share-based
incentives,
value
of received
services * 1.3 1.3 1.3
Other
changes - -2.6 -2.6
Equity
on
30.9.2007 64.1 96.7 -63.1 -26.1 18.9 781.0 871.6 5.2 876.7
Equity on
31.12.2007 64.2 97.4 -70.0 -29.6 19.9 808.7 890.6 6.1 896.7
Gain/
loss
on cash
flow
hedges
booked to
equity * -45.9 -45.9 -0.3 -46.2
Gain/
loss
on cash
flow
hedges
trans-
ferred
to IS -1.5 -1.5 0.0 -1.4
Trans-
lation
differ-
rences 8.9 8.9 0.3 9.2
Total
net
income
recognised
directly
in equity - - - 8.9 -47.3 - -38.5 0.0 -38.4
Net
income
for the
period 109.9 109.9 2.0 111.9
Total
recognised
income
and
expenses
for the
period - - - 8.9 -47.3 109.9 71.4 2.0 73.4
Dividends
paid -65.3 -65.3 -0.6 -65.9
Shares
subscribed
with
options 0.1 0.4 0.4 0.4
Acquisition
of
treasury
shares -23.6 -23.6 -23.6
Share-
based
incentives,
value of
received
services * 0.5 0.5 0.5
Other
changes - 0.3 0.3
Equity on
30.9.2008 64.3 97.7 -93.6 -20.7 -27.4 853.8 874.1 7.8 881.9
* Net of
tax
Condensed Consolidated Cash Flow
Statement
MEUR 1-9/2008 1-9/2007 1-12/2007
Net income for the period 111.9 109.5 138.4
Depreciation 42.3 39.7 59.8
Other adjustments 45.0 47.1 64.4
Change in working capital -41.0 -57.5 -27.4
Cash flow from operations 158.1 138.8 235.1
Cash flow from financial items and
taxes -33.4 -56.5 -62.5
Cash flow from operating activities 124.8 82.3 172.6
Acquisitions -40.4 -169.3 -172.5
Cash flow from investing
activities, other items -72.3 -65.7 -91.8
Cash flow from investing activities -112.7 -235.0 -264.3
Acquisition of treasury shares -23.6 -39.2 -46.1
Proceeds from share subscriptions 0.4 0.8 1.5
Dividends paid -65.9 -63.9 -63.8
Proceeds from long-term borrowings 0.7 226.9 274.5
Repayments of long-term borrowings -2.2 -10.8 -29.5
Proceeds from short-term borrowings 38.0 20.1 40.8
Repayments of short-term borrowings -24.6 -14.4 -31.5
Cash flow from financing activities -77.2 119.6 145.9
Change in cash -65.1 -33.1 54.2
Cash, cash equivalents and bank
overdrafts at the beginning of
period 167.5 114.5 114.5
Effect of exchange rate changes 2.5 -1.0 -1.1
Cash, cash equivalents and bank
overdrafts at the end of period 104.9 80.4 167.5
Bank overdrafts at the end of
period 17.0 13.6 11.4
Cash and cash equivalents at the
end of period 121.9 94.0 179.0
Key Figures
1-9/2008 1-9/2007 1-12/2007
Equity/share EUR 14.26 13.96 14.29
Interest-bearing net debt MEUR 388.7 364.6 303.6
Total equity/total assets % 35.3 40.2 38.3
Gearing % 44.1 41.6 33.9
Return on equity % 16.8 16.7 15.6
Return on capital employed % 15.1 17.6 16.8
Segment Reporting
Sales by geographical
segment, MEUR 1-9/2008 1-9/2007 1-12/2007
EMEA 1,410 1,187 1,677
Americas 397 498 647
Asia Pacific 669 466 695
Total 2,476 2,151 3,018
Sales by geographical
segment, % 1-9/2008 1-9/2007 1-12/2007
EMEA 56.9 % 55.2 % 55.6 %
Americas 16.0 % 23.2 % 21.4 %
Asia Pacific 27.0 % 21.7 % 23.0 %
Total 100.0 % 100.0 % 100.0 %
Sales, MEUR 1-9/2008 1-9/2007 1-12/2007
Hiab 691 687 931
Kalmar 1,103 979 1,343
MacGREGOR 687 487 748
Internal sales -6 -2 -4
Total 2,476 2,151 3,018
Operating profit, MEUR 1-9/2008 1-9/2007 1-12/2007
Hiab 45.7 54.6 73.8
Kalmar 77.5 78.6 105.5 *
MacGREGOR 52.9 37.1 59.4
Corporate administration
and other -19.2 -13.5 -17.5
Operating profit from
operations 156.9 156.8 221.1
None-recurring items - - -18.0
Total 156.9 156.8 203.1
* Excluding the one-off cost of EUR 18.0 million related to a
container spreader inspection and repair programme
Operating profit, % 1-9/2008 1-9/2007 1-12/2007
Hiab 6.6 % 8.0 % 7.9 %
Kalmar 7.0 % 8.0 % 7.9 % *
MacGREGOR 7.7 % 7.6 % 7.9 %
Cargotec, operating
profit from
operations 6.3 % 7.3 % 7.3 % *
Cargotec 6.3 % 7.3 % 6.7 %
* Excluding the one-off cost of EUR 18.0 million related to a
container spreader inspection and repair programme
Orders received, MEUR 1-9/2008 1-9/2007 1-12/2007
Hiab 661 731 985
Kalmar 1,217 1,083 1,429
MacGREGOR 1,264 1,080 1,696
Internal orders received -7 -3 -4
Total 3,136 2,892 4,106
Order book, MEUR 30.9.2008 30.9.2007 31.12.2007
Hiab 229 255 260
Kalmar 778 684 660
MacGREGOR 2,480 1,614 1,946
Internal order book -1 0 -1
Total 3,486 2,552 2,865
Capital expenditure, MEUR 1-9/2008 1-9/2007 1-12/2007
In fixed assets
(excluding acquisitions) 46.5 37.7 52.5
In leasing agreements 0.6 0.3 0.7
In customer financing 26.0 23.5 37.5
Total 73.1 61.5 90.7
Number of employees at the end
of period 30.9.2008 30.9.2007 31.12.2007
Hiab 4,508 4,405 4,418
Kalmar 4,777 4,431 4,459
MacGREGOR 2,548 2,162 2,223
Corporate administration 167 83 87
Total 12,000 11,081 11,187
Average number of employees 1-9/2008 1-9/2007 1-12/2007
Hiab 4,540 3,981 4,091
Kalmar 4,639 4,159 4,233
MacGREGOR 2,410 1,773 1,880
Corporate administration 126 68 72
Total 11,716 9,981 10,276
Notes
Taxes in income statement
MEUR 1-9/2008 1-9/2007 1-12/2007
Current year tax expense 55.0 42.3 56.2
Deferred tax expense -9.6 -0.7 -3.9
Tax expense for previous years -15.4 -6.4 -6.3
Total 30.0 35.2 46.0
Commitments
MEUR 30.9.2008 30.9.2007 31.12.2007
Guarantees 0.2 2.4 2.2
Dealer financing 0.2 5.6 8.4
End customer financing 6.7 5.9 7.5
Operating leases 53.2 50.0 47.7
Off balance sheet investment
commitments 4.2 - 1.2
Other contingent liabilities 3.8 5.3 3.7
Total 68.2 69.2 70.6
Fair values of derivative financial instruments
Positive Negative Net fair Net fair Net fair
fair value fair value value value value
MEUR 30.9.2008 30.9.2008 30.9.2008 30.9.2007 31.12.2007
FX forward
contracts
cash flow hedges 28.0 84.9 -56.9 19.9 11.3
FX forward
contracts,
non-hedge
accounted 24.7 9.8 14.9 5.5 20.7
Cross currency
and
interest rate
swaps,
cash flow hedges - 2.5 -2.5 -5.2 -4.9
Total 52.7 97.2 -44.5 20.2 27.1
Non-current
portion:
FX forward
contracts,
cash flow
hedges 11.7 37.9 -26.2 4.8 -1.1
Cross currency
and
interest rate
swaps,
cash flow hedges - 2.5 -2.5 -5.2 -4.9
Non-current
portion 11.7 40.4 -28.6 -0.4 -6.0
Current portion 41.0 56.9 -15.8 20.6 33.2
Nominal values of derivative financial instruments
MEUR 30.9.2008 30.9.2007 31.12.2007
FX forward contracts 3,430.6 2,306.4 2,610.0
Cross currency and interest
rate swaps 225.7 225.7 225.7
Total 3,656.3 2,532.1 2,835.7
Acquisitions
During January-September 2008, Cargotec made seven acquisitions of
which four in Hiab business area.
In February, in order to strengthen its R&D capabilities, Cargotec
acquired 60 percent of Idea Design & Consulting S.r.l. Italy. The
accounting of this business combination also includes the minority
share, which include a redemption obligation. The acquisition was
finalised in February.
In February, Hiab made an agreement to acquire the UK-based Del
Equipment (UK) Limited and the US-based Ultron Lift Corp. These
companies manufacture tail lifts in UK and US. The acquisitions were
finalised at the end of March. In February, Hiab signed also an
agreement to acquire 70 percent of the operations of Australian
O'Leary's Material Handling Services Pty Ltd., the leading supplier
of tail lifts in Western Australia. The acquisition was closed in
April. At the end of March, Hiab concluded an agreement to acquire
the majority of the operations of South African Bowman Cranes (Pty)
Limited. This company supplies, installs and services truck-related
load handling equipment. The acquisition was finalised in June. In
June, Hiab concluded an agreement to acquire the business of Zepro
Tailgate (1987) Limited in New Zealand. In addition to tail lift
sales, the business comprises installation, repairs, maintenance and
spare parts sales. The acquisition was closed in July.
In April, MacGREGOR signed an agreement to acquire US-based Platform
Crane Service, Inc (PCS). The acquisition was closed in May.
Kalmar acquired Argentinean Equipos y Servicios Terminales y Puertos
SRL (ESTP). In addition to new equipment distribution the company
provides equipment commissioning, technical and spare part support as
well as equipment repairing and refurbishing in South America.
Management estimates that the consolidated sales for Jan 1- Sep 30,
2008 would have been EUR 2,494 million, if the acquisitions had been
completed on Jan 1, 2008.
The table below summarizes the acquisitions completed in
January-September 2008. The business combinations were accounted as
preliminary as the determination of fair values to be assigned to the
assets, liabilities and contingent liabilities were yet not
finalised.
Net fair values of Assets and
identifiable liabilities
assets and immediately
liabilities of before the
the acquired business
businesses combination
MEUR
Other intangible assets 3.0 0.0
Property, plant and equipment 1.5 1.7
Inventories 11.2 11.1
Non-interest-bearing assets 11.2 11.2
Interest-bearing assets and Cash and
cash equivalents 0.9 0.9
Interest-bearing liabilities -5.0 -5.0
Other non-interest-bearing liabilities -16.1 -15.0
Acquired net assets 6.7 4.9
Transaction price 37.7
Costs related to acquisitions 1.5
Goodwill 32.5
Transaction price paid in cash 30.7
Costs related to acquisitions 1.5
Cash and cash equivalents in
acquired businesses -0.9
Total cash outflow from
acquisitions 31.3
The business combinations of Hydramarine AS. Indital Construction
Machinery Ltd. Bay Equipment Repairs Inc and Balti ES were accounted
as preliminary at the end of 2007, as the determination of fair
values was not yet finished. The accounting of these acquisitions has
been finalised during the review period. It had no impact on the
previous year's figures.
Accounting Principles
The interim report has been prepared according to the International
Accounting Standard 34: Interim Financial Reporting.
The accounting policies adopted are consistent with those of the
annual financial statements of 2007. All figures presented have been
rounded and consequently the sum of individual figures may deviate
from the presented sum figure.
Adoption of new interpretation starting in January 1, 2008
Starting from January 1, 2008 Cargotec has adopted the following new
interpretation by the IASB published in 2007:
- IFRIC 14, IAS 19 - The Limit on a Defined Benefit Asset. Minimum
Funding Requirements and their interaction.
The adoption of the interpretation does not have a material effect on
the interim financial statements.
Calculation of key
figures
Total equity attributable to the shareholders
of the parent company
Equity /
share = ___________________________________
Share issue adjusted number of shares
at the end of period
(excluding treasury shares)
Interest-bearing
net debt = Interest-bearing debt - interest-bearing assets
Total equity
Total equity / 100
total assets (%) = x ____________________________________
Total assets - advances received
Interest-bearing debt - interest-bearing assets
100
Gearing (%) = x _____________________________________
Total equity
Net income for period
Return on equity 100
(%) = x _____________________________________
Total equity (average for period)
Income before taxes + interest and other
financing expenses
Return on
capital employed 100
(%) = x _________________________________________________
Total assets - non-interest-bearing debt (average
for period)
Net income for the period attributable
to the shareholders of the parent company
Basic earnings /
share = _________________________________________________
Share issue adjusted weighted average number
of shares during period
(excluding treasury shares)
Quarterly Figures
Cargotec Q3/2008 Q2/2008 Q1/2008 Q4/2007 Q3/2007
Orders received MEUR 967 1,013 1,155 1,214 1,028
Order book MEUR 3,486 3,360 3,287 2,865 2,552
Sales MEUR 848 901 727 868 713
Operating profit MEUR 49.6 63.1 44.2 64.3 * 52.5
Operating profit % 5.8 7.0 6.1 7.4 * 7.4
Basic
earnings/share EUR 0.66 0.61 0.50 0.45 0.55
Hiab Q3/2008 Q2/2008 Q1/2008 Q4/2007 Q3/2007
Orders received MEUR 194 238 228 254 223
Order book MEUR 229 238 253 260 255
Sales MEUR 209 253 230 244 202
Operating profit MEUR 9.5 18.5 17.7 19.1 13.7
Operating profit % 4.5 7.3 7.7 7.8 6.8
Kalmar Q3/2008 Q2/2008 Q1/2008 Q4/2007 Q3/2007
Orders received MEUR 365 363 490 346 324
Order book MEUR 778 790 824 660 684
Sales MEUR 386 396 322 364 326
Operating profit MEUR 25.8 32.3 19.4 26.9 * 27.8
Operating profit % 6.7 8.2 6.0 7.4 * 8.5
MacGREGOR Q3/2008 Q2/2008 Q1/2008 Q4/2007 Q3/2007
Orders received MEUR 411 415 439 616 483
Order book MEUR 2,480 2,334 2,211 1,946 1,614
Sales MEUR 256 254 177 261 187
Operating profit MEUR 19.1 21.9 11.9 22.3 15.0
Operating profit % 7.5 8.6 6.7 8.6 8.0
* Excluding the one-off cost of EUR 18.0 million in Kalmar business
area related to a container spreader inspection and repair programme
