Annual General Meeting 2019 19 March 2019 Annual General Meeting - PowerPoint PPT Presentation

CEO Mika Vehviläinen Annual General Meeting 2019 19 March 2019 Annual General Meeting 19 March 2019 1

Agenda 1. Extended Executive Board introduction 2. Financial review 2018 3. Strategic development 4. Sustainability as a driver for future growth 5. Dividend and outlook for 2019 Annual General Meeting 19 March 2019 2

Cargotec's Extended Executive Board from 1 April 2019 Mika Vehviläinen Mikko Puolakka Antti Kaunonen Scott Phillips Stefan Lampa Michel van CEO CFO President, Kalmar President, Hiab President, Kalmar Roozendaal Automation Solutions Mobile Solutions President, MacGregor Mikael Laine Mikko Pelkonen Soili Mäkinen Outi Aaltonen Carina Geber-Teir SVP, Strategy SVP, Human Resources CIO SVP, General Counsel SVP, Communications Annual General Meeting 19 March 2019 3

Kalmar's business operations are reorganised to accelerate growth Business Areas Business Strategic Scott Phillips * Antti Kaunonen * Stefan Lampa * Benoit de la Tour ** Michel van Roozendaal * Units Hiab Kalmar Automation Solutions Kalmar Mobile Solutions Navis MacGregor * Member of the Executive Board Annual General Meeting 19 March 2019 4 ** Reports to CEO

Financial review 2018: Strong growth in orders received

Year 2018 at Cargotec – Orders received increased in all business units Orders received increased by 18% 8.0% 7.4% 7.1%  Growth in all business units 6.2% – Kalmar +23% 259 – Hiab +13% 250 244 – 231 MacGregor +11% 4.4% 4.0% Net sales increased by 2%  At comparable currency rates, net sales 149 127 increased by 4% Operating profit* decreased by 6%  Kalmar's operating profit* increased  Hiab was burdened by exchange rate fluctuations 2013 2014 2015 2016 2017 2018 and supply chain bottlenecks Operating profit* MEUR Operating profit*, %  MacGregor’s operating profit* slightly above zero * Excluding restructuring costs Annual General Meeting 19 March 2019 6

Market Global container throughput (MTEU) – Kalmar’s demand driver Source: Drewry 800 environment 700 782 745 600 +4.7% 500 400 in 2018 300 200 100 0 2017 2018 Kalmar Construction output – Hiab’s demand driver The number of containers Source: Oxford Economics United States Europe handled in ports continued to grow +2.9% +3.3% Hiab Construction activity at a good 2017 2018 2017 2018 level Ship and offshore unit order volumes – MacGregor’s demand driver Source: Clarkson Research (number of ships and offshore units) Merchant ships > 2,000 gt (excl. offshore and miscellaneous) Mobile offshore units Historical indicative average MacGregor 2,000 600 Historical avg. The market improved slightly in Historical avg. 500 1,500 400 the merchant ship sector, but 1,000 300 200 936 orders remained below historical 91 827 +13% 500 75 +21% 100 levels 0 0 2017 2018 2017 2018 Annual General Meeting 19 March 2019 7

We continued investing in the development of our operations in 2018 Investment targets in 2018:  Digitalisation  More competitive and cost- efficient products  Digital solutions development hub to Tampere  Investments in global systems  Sofia Business Service Centre Annual General Meeting 19 March 2019 8

Kalmar – Orders received MEUR 2,000 1,800 and operating profit 1,600 1,400 increased 1,200 1,000 800 600 Orders received increased by 23% 400 200 – Five new automation projects 0 2013 2014 2015 2016 2017 2018 – Orders for container handling equipment Sales Orders received increased MEUR 10% Operating profit* increased by 8% and 140 operating margin* improved to 8.9% 120 8% 100 80 Service business developed favourably 5% 60 – Comparable growth 9% 40 3% 20 0 0% 2013 2014 2015 2016 2017 2018 Operating profit* Operating profit*, % * Excluding restructuring costs Annual General Meeting 19 March 2019 9

Hiab – Demand remained MEUR 1,400 strong, but operating profit 1,200 1,000 declined 800 600 400 Orders received increased by 13% 200 0 – Growth in both Europe and Americas 2013 2014 2015 2016 2017 2018 Sales Orders received Sales increased by 6% – Comparable growth in service MEUR 18% business 9% 150 15% 125 Operating profit* declined compared to the 13% 100 10% previous year 75 8% – Weakening of the US dollar against the euro 50 5% 25 3% – Additional costs related to the supply chain 0 0% 2013 2014 2015 2016 2017 2018 Operating profit* Operating profit*, % *) Excluding restructuring costs Annual General Meeting 19 March 2019 10

MacGregor – Orders MEUR 1,200 received increased, market 1,000 environment still 800 600 challenging 400 200 0 2013 2014 2015 2016 2017 2018 Orders received increased by 11% Sales Orders received Net sales and operating profit* declined, MEUR 100 10% operating profit* remained slightly above zero 75 8% The market situation is still challenging 50 5% 25 3% 0 0% 2013 2014 2015 2016 2017 2018 Operating profit* Operating profit*, % *) Excluding restructuring costs Annual General Meeting 19 March 2019 11

Order book grew strongly Order book Distribution of order book at MEUR the end of 2018 2,500 2,200 1,995 2,064 26% 1,980 2,000 1,769 630 1,566 1,131 883 51% 1,500 980 587 481 453 305 286 1,000 264 300 203 500 1,012 896 877 799 805 786 23% 0 2013 2014 2015 2016 2017 2018 Kalmar Hiab MacGregor Kalmar Hiab MacGregor Annual General Meeting 19 March 2019 12

Cash flow from operations declined due to the increase in working capital MEUR 400 373 350 315 300 253 250 204 181 200 150 126 100 50 0 2013 2014 2015 2016 2017 2018 Annual General Meeting 19 March 2019 13

Gearing remained below our target MEUR 59.2 % 800 60% 700 46.7 % 46.4 % 43.8 % 600 36.0 % 40% 500 33.1 % 400 719 622 625 300 578 20% 503 472 200 100 0 0% 2013 2014 2015 2016 2017 2018 Interest-bearing net debt, MEUR Gearing, % Annual General Meeting 19 March 2019 14

Progress in M&A in 2018 Kalmar Rough Effer Terrain Center Siwertell TTS Annual General Meeting 19 March 2019 15

Strategy developed well

Must-win battles of the strategy period 2015 – 2018 create a solid base for future Build world-class leadership Lead digitalisation World-class service offering Annual General Meeting 19 March 2019 17

Effective leadership enables strategy implementation Our model for leadership development is at the heart of succession planning and the development of managerial work 1,800 of our leaders have completed our leadership training We measure leadership and working atmosphere regularly Our teams’ working atmosphere has improved markedly

Strong progress in digitalisation The world's largest port operator, Cosco, concluded a contract for the deployment of the Navis N4 system Orders received in the software business grew by 33% Digital solutions support industry eco- efficiency Hiab HiConnect to the commercial market MacGregor's new Voyage and Port Optimiser system

Service sales grew in all business units Comparable growth in service sales was 6% Service sales MEUR 932 907 1,000 883 872 814 729 28% 28% 750 25% 24% 24% 23% 500 250 0 2013 2014 2015 2016 2017 2018 Service sales, MEUR % of Cargotec's sales

Service develops through digitalisation Kalmar's new innovation centre accelerates the development of services The increase in the amount of data from equipment enables eg. intelligent service solutions Kalmar Insight enables more efficient operations in ports Hiab's HiVision now has possibility for remote service MacGregor's OnWatch Scout reduces unplanned downtime

Our vision is to become the market leader in intelligent cargo handling VISION GLOBAL MARKET LEADER IN INTELLIGENT CARGO HANDLING Win through customer centricity Accelerate digitalisation MUST-WIN BATTLES Advance in services Productivity for growth Annual General Meeting 19 March 2019 22

Sustainability as a driver for future growth Annual General Meeting

Climate change will have an impact on the transport sector and the needs of our customers in the future Emission reduction targets and requirements for transport are being continuously assessed The need for electrification and streamlined transport chains will grow Image: Espen Rønnevik, Worldcam / Statoil

Eco-efficient solutions promote our competitiveness The offering for eco-efficiency accounted for about 21% of net sales in 2018 Systems Efficiency for Emission efficiency Resources efficiency environmental industries efficiency Annual General Meeting 19 March 2019 25

Ethics and Compliance Profitable and sustainable business requires ethical ways of working Organisation and leadership Processes and controls Speak-Up    Strong commitment from Internal controls and audits Employees are encouraged top management to discuss possible  Policies and related concerns  Top management monitors trainings  Code of Conduct matters Anonymous reporting line in  Ethical aspects in business regularly use acquisitions   Strongly enhanced Systematic way for  Ethical practices required resources on monitoring investigating and reacting to also from our partners and change leadership possible misconduct Annual General Meeting 19 March 2019 26