Cargotec’s interim report January–March 2023: Record-high comparable operating profit
January–March 2023 in brief: Comparable operating profit margin above 10 percent
- Orders received decreased by 7 percent and totalled EUR 1,059 (1,135) million.
- Order book amounted to EUR 3,467 (31 Dec 2022: 3,541) million at the end of the period.
- Sales increased by 26 percent and totalled EUR 1,074 (851) million.
- Service sales increased by 22 percent and totalled EUR 346 (284) million.
- Service sales represented 32 (33) percent of consolidated sales.
- Eco portfolio sales increased by 21 percent and totalled EUR 346 (285) million.
- Eco portfolio sales represented 32 (34) percent of consolidated sales.
- Operating profit was EUR 104 (37) million, representing 9.7 (4.4) percent of sales. The operating profit includes items affecting comparability worth EUR -8 (-23) million.
- Comparable operating profit increased by 85 percent and amounted to EUR 112 (61) million, representing 10.5 (7.2) percent of sales.
- Cash flow from operations before finance items and taxes totalled EUR 26 (-70) million.
- Profit for the period amounted to EUR 73 (21) million.
- Basic earnings per share was EUR 1.13 (0.33).
Cargotec’s President and CEO Casimir Lindholm: Core businesses drove strong development in sales and comparable operating profit
The first quarter provided a strong start to the year 2023 and a solid base for me to enter as Cargotec’s new CEO as of 1 April. Despite a 7 percent decrease in orders received, demand remained at a good level. Service orders continued to grow significantly and increased by 18 percent. Stemming from our solid order book, our sales increased by 26 percent to EUR 1,074 million. Driven by our core businesses Kalmar and Hiab, we reached a record-high comparable operating profit of EUR 112 million and a comparable operating profit margin of 10.5 percent.
In Kalmar, demand was steady. We saw some delays in purchase decisions in larger projects whereas demand for services and eco portfolio solutions remained strong. Sales increased by 31 percent to EUR 485 million. Sales growth was supported by successful supply chain management despite persisting tightness and volatility of the component availability. Service sales increased, driven by improved spare parts capture rates. Kalmar’s comparable operating profit margin improved to a record level of 13 percent, driven by higher sales, improved management of supply chain and lower losses related to heavy cranes business.
In Hiab, underlying demand drivers remained at a good level. Orders received declined from the comparison period, which was partly due to large orders received in the first quarter of 2022. Order intake was also affected by inflation, high interest rates, and extended truck lead times. Bottlenecks in truck chassis supply also limited Hiab’s sales growth. However, the operational execution was strong and Hiab’s sales grew by 27 percent to EUR 432 million and comparable operating profit by 29 percent to EUR 61 million.
In MacGregor, orders received improved, driven by strong container vessel and car carrier markets. Going forward, the order pipeline looks healthy but, due to limited shipyard capacity, container vessel contracting is estimated to be slower. MacGregor’s orders received increased also in offshore and service businesses. Sales in MacGregor were still at a relatively low level of EUR 157 million with 56 percent of sales coming from services. MacGregor’s comparable operating profit improved to EUR 1 million stemming from higher service sales. As announced earlier, we will continue to focus on a turnaround of the business and to look for a solution for MacGregor in 2024.
To conclude, the first quarter was a robust start to the year. Despite elevated market uncertainty, many of our customers and partners are performing well. We have a solid order book covering almost the entire 2023 equipment sales and we are tracking well against our outlook for 2023 as well as performance targets for core businesses. The MacGregor restructuring is progressing and the business is on path to deliver a positive comparable operating profit in 2023. Our core businesses' comparable operating profit increased by 62 percent and posted a comparable operating profit margin of 12.4 percent. Share of eco portfolio orders in our core business continued to increase and core businesses’ sales grew clearly faster than the global GDP.