SEB Seminar Executive Vice President and CFO Eeva Sipilä
Cargotec s business areas MacGregor MacGregor offers integrated cargo flow solutions for maritime transportation and offshore industries Global company with facilities near ports worldwide Wide offering for ships, ports and terminals and offshore industry Kalmar Kalmar offers the widest range of cargo handling solutions and services to ports, terminals, distribution centres and heavy industry Industry forerunner in terminal automation and in energy efficient container handling Hiab Hiab is the global market leading brand in on-road load handling solutions Load handling solutions are used in various sectors of on land transport and delivery, including construction, distribution, forestry, warehousing, waste and recycling, and defence 8.1.2015 3
Cargotec s business basics Cargotec sales split in 1-9/2013 Geographical split of sales in 1-9/2014 Services share of sales in 1-9/2014 Order to delivery lead time MacGregor 26% 43% 31% AMER APAC EMEA 22% 12-24 months MacGregor Kalmar Hiab Kalmar Cargotec geographical split of sales in 1-9/2014 28% AMER APAC EMEA 28% 6-9 months 42% Hiab 30% EMEA APAC AMER AMER APAC EMEA 23% 2-4 months 8.1.2015 4
January September key figures Q3/14 Q3/13 Change Q1-Q3/14 Q1-Q3/13 Change 2013 Orders received, MEUR 829 724 15% 2,685 2,348 14% 3,307 Order book, MEUR 2,327 2,048 14% 2,327 2,048 14% 1,980 Sales, MEUR 840 752 12% 2,395 2,267 6% 3,181 Operating profit, MEUR* 48.4 35.4 37% 77.8 87.9-12% 126.5 Operating profit margin, %* 5.8 4.7 3.2 3.9 4.0 Cash flow from operations, MEUR 63.4 38.2 120.3 47.0 180.9 Interest-bearing net debt, MEUR 835 577 835 577 578 Earnings per share, EUR 0.43 0.31 0.48 0.77 0.89 *excluding restructuring costs 8.1.2015 5
Container throughput forecast illustrates that Kalmar is in a growth business TEU 000 1,0001 800 600 400 621.9 +3.6% 644.0 94.1 95.6 168.7 173.6 +5.2% 677.3 99.1 180.4 +5.5% 714.4 102.5 188.5 +5.9% 756.5 108.0 197.6 +6.0% 802.2 114.0 207.5 +5.9% 849.6 119.0 217.8 200 359.2 374.9 397.8 423.3 450.9 480.7 512.9 0 2012 2013 2014 2015 2016 2017 2018 APAC EMEA AMER Source: Drewry: Container forecaster Q3 2014, Base case, October 2014 8.1.2015 6
Slow recovery in merchant shipping Long-term contracting 2002 2023 World fleet additions 2002 2026 ship nos ship nos 6,000 3,500 History Forecast History Forecast 5,000 4,000 3,000 2,000 1,000 0 x4 3 Boom Collapse 02 04 06 08 10 12 14 16 18 20 22 Source: Clarkson Newbuilding Market Forecast, September 2014 8.1.2015 7 ~3% p/a Recovery x4 3,000 2,500 2,000 1,500 1,000 500 Magnitude of expansion / contraction in ship numbers 0 x3 2 Fleet expansion ~3% p/a Over-capacity Recovery 02 04 06 08 10 12 14 16 18 20 22 24 26
Despite reducing oil price offshore offers potential for MacGregor Break-even price for non-producing assets in USD/barrel Global oilfield service purchases, 2014 2020 CAGR Maintenance and operations 0% 2% 4% 6% 8% 10% 12% 80 USD/barrel EPCI Subsea Drilling contractors Well services and commodities Seismic All offshore purchases Downside on CAGR in an 80 USD/barrel scenario Source: Rystad energy EPCI = Engineering procurement construction and installation 8.1.2015 8
Two-fold market environment for Hiab Truck sales growth GVW over 15 ton - regions % 80 60 40 20 0-20 -40-60 EMEA AMER APAC 2008 2009 2010 2011 2012 2013 2014 2015 2016 8 4 0-4 -8-12 -4-8 -12 EMEA construction output y/y change (%) Index 2005 = 100 2005 2007 2009 2011 2013 2015 AMER construction output INDEX CHANGE (%) 120 110 100 90 80 70 60 y/y change (%) Index 2005 = 100 8 4 0 2005 2007 2009 2011 2013 2015 INDEX CHANGE (%) 110 100 90 80 70 60 Source: IHS Global Insight Q3/2014 forecast 8.1.2015 9
Building Hiab into a sustainably profitable and growing business Preparation for growth 2015 2016 Profitable growth 2017 Turnaround 2013 2014 Closing the cost gap Building the foundation Demonstrating clear profitability improvement Cost leadership Operational excellence Investment to product portfolio, processes & systems Targeting 10% operating profit margin in 2016 Leverage cost leadership & operational excellence to drive growth Targeted emerging market expansion Regain leadership in cranes Targeting 10% operating profit margin over a business cycle 8.1.2015 10
Cargotec s must wins 2014 2015 Driving Hiab to best in class profitability and capital return Driving MacGregor profitability over the cycle through better effectiveness Safeguarding competitiveness in mobile equipment in Kalmar Driving services offering development and growth in MacGregor and Kalmar Driving growth in automation in Kalmar 8.1.2015 11
Cargotec financial targets for 2016 Operating profit margin (EBIT) Return on capital employed (ROCE pre-tax) Gearing Dividend of earnings per share 8.1.2015 12
Enabling better performance Building world class business platforms Performance culture Better control, predictability and capital returns Embracing digitalisation 8.1.2015 13