intelligent cargo handling Investor presentation February 2020 1 - PowerPoint PPT Presentation

Investor presentation, February 2020 Becoming the leader in intelligent cargo handling Investor presentation February 2020 1

Investor presentation February 2020 2

Content 1. Cargotec in brief 2. Investment highlights 3. Kalmar 4. Hiab 5. MacGregor 6. Recent progress 7. Appendix 3

Cargotec in brief 4 4

Strong global player with well-balanced business Sales: Sales split: new Sales by Sales by EUR 3,683 million equipment vs service business areas geographical area EBIT: 7.2% and software Service and Kalmar Kalmar MacGregor EMEA software 47% AMER 16% 48% Sales: EUR 1,723 million 33% 34% EBIT: 9.4% (EUR 161.8 million) Hiab Sales: EUR 1,350 million EBIT: 12.6% (EUR 170.2 million) Hiab MacGregor 37% APAC Sales: EUR 611 million New equipment 18% EBIT: -4.6% (EUR -28.2 million) 67% Strengths we are building upon Leading market positions Strong brands Loyal customers Leading in technology in all segments Figures: 2018 EBIT = Comparable operating profit Investor presentation February 2020 5

Key competitors Cargotec is a leading player in all of its business areas Global main competitors Other competitors Investor presentation February 2020 6

Currently two businesses performing well Trend in orders, Profitability: Comparable EBIT Net sales* in 2019 last 12 months margin EUR million ~400 Kalmar software (Navis) ~1,300 Above break-even and Automation and Projects division ~600 MacGregor +39% 3,683 -3.8% Hiab +23% 11.8% ~1,400 Kalmar equipment and service MacGregor Kalmar equipment Low double digit (excluding Automation and Kalmar APD and Hiab Projects Division & Navis) software * Figures rounded to closest 100 million Investor presentation February 2020 7

Investment highlights 8

Investment highlights: Why invest in Cargotec? 1. Technology leader and strong market positions, leading brands in markets with long term growth potential 2. Our vision is to become the global leader in intelligent cargo handling 3. Growing service & software business and asset-light business model are increasing stability 4. Capitalising global opportunities for future automation and software growth 5. On track for profitability improvement and to reach financial targets Investor presentation February 2020 9

1. Technology leader and strong market positions, leading brands in markets with long term growth potential Competitive Market Global Growth megatrends drivers advantages position  Globalisation  Container  Strong brands  #1 or #2 in all and trade throughput major  Full growth growth segments automation  Urbanisation  Construction offering activity  Growing  Technology middle class  Automation leadership  Digitalisation Investor presentation February 2020 10

2. Our vision is to become the global leader in intelligent cargo handling VISION GLOBAL LEADER IN INTELLIGENT CARGO HANDLING WIN THROUGH CUSTOMER CENTRICITY ACCELERATE DIGITALISATION We help our customers achieve their goals We build and expand our digital solutions to offer by aligning our offering and way of working to a great customer experience and more efficient serve them better. business processes. MUST-WIN BATTLES ADVANCE IN SERVICES PRODUCTIVITY FOR GROWTH We extend our offering towards intelligent solutions that We focus on activities that add value and benefit enable us to serve our customers wide across their our customers and us by developing our lifecycle. business operations and common platforms. Investor presentation February 2020 11

3. Growing service & software business and asset-light business model are increasing stability Service and software* sales Asset-light business model with a flexible cost structure MEUR  Kalmar and Hiab: efficient assembly operation 1,230 1,200 +8% 1,126 168 1,090 MacGregor: efficient project management and  1,100 1,052 1,053 +3% +4% 147 +0% +10% engineering office: > 90% of manufacturing and 152 1,000 955 121 149 +9% 30% of design and engineering capacity outsourced 873 900 108 107 800  No in-house component manufacturing 700 600 Next steps to increase service and software sales: 1,062 500 Improve service offering through digital solutions  980 931 938 905 847 400 766  Build on Navis position as industry leader 300  Increase spare parts capture rates 200 100  Boost service contract attachment rates 0 2013 2014 2015 2016 2017 2018 2019 Services Software *) Software sales defined as Navis business unit and automation software Investor presentation February 2020 12

4. Capitalising global opportunities for future automation and software growth Industry trends support growth Significant possibility in port Automation creates significant cost savings* in port automation: software: Labour costs 60% less labour costs  Only 40 terminals (out of 1,200  Container value chain is very Total costs 24% less costs terminals) are automated or semi- inefficient: total value of waste and Profit increase 125% automated currently globally inefficiency estimated at ~EUR 17bn  Ships are becoming bigger and  Over 50% of port software market is the peak loads have become an issue in-house, in long term internal solutions not competitive  Increasing focus on safety  Navis has leading position in  Customers require decreasing energy port ERP usage and zero emission ports  Optimum efficiency, space utilization Customers consider their automation and reduction of costs are increasingly decisions carefully important  Shipping line consolidation  Shortage and cost of trained and  Utilisation rates of the existing skilled labour pushes terminals to equipment base automation  Container throughput volumes * Change when manual terminal converted into an automated operation  Efficiency of the automation solutions Investor presentation February 2020 13

5. Clear plan for profitability improvement and to reach financial targets Sales and comparable operating Growth Profitability Target to grow faster than market Target 10% operating profit and profit development 15% ROCE in 3-5 years*  Megatrends and strong market 4,500 400 6.2% 4.4% 7.2% position supporting organic growth 7.1% Higher service and software sales 4,000 4.0% 3,358 3,729 8.0% 3,683 350 key driver for profitability M&A potential  3,181 3,500 3,514 3,304 300 improvement 3,000 250 Cost savings actions: 264 259 Service and software 2,500 250 242 231 200 Targeting service and software sales  2020 EUR 30 million (indirect 2,000 40% of net sales, minimum EUR 1.5 purchasing and new Business 150 1,500 Services operations) 149 billion in 3-5 years* 100 1,000 Product re-design and improved 50 500 project management Balance sheet and dividend 0 0 Target gearing < 50% and 2014 2015 2016 2017 2018 2019 increasing dividend in the range of 30-50% of EPS, dividend paid twice Comparable Net sales operating profit margin Comparable operating profit a year *Target announced in September 2017 Investor presentation February 2020 14

Kalmar Investor presentation 15 15

Container throughput still forecasted to grow year on year TEU million Growth from 2013 to 2023 42% 1,000 CAGR 3.6% 910 882 +3.3% 855 +3.1% 829 +3.1% 802 134 784 130 800 748 +3.3% 126 122 +2.3% 702 119 685 116 675 +4.9% 109 642 +6.5% 230 101 +2.6% 224 101 98 218 +1.5% 600 213 96 +5.1% 207 202 195 185 182 182 173 400 546 528 510 494 477 465 444 416 200 401 395 373 0 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 APAC EMEA AMER 2018-2023: Drewry: Container forecaster Q4 2019 2016-2017: Drewry: Container forecaster Q2 2019 2015 Drewry: Container forecaster Q2 2018 2013-2014 Drewry Global Container Terminal Operators Annual Report 2013 Investor presentation February 2020 16

Flexible and scalable Navis TOS software Terminal Operating System (TOS) Terminal Logistic System Truck / Transfer area Automated Horizontal Transportation Automatic stacking crane (ASC) area Quay crane area ASC stack area Equipment Equipment Investor presentation February 2020 17

Kalmar’s operating environment Provides integrated port automation The collaboration platform solutions including software, serving the needs of ocean services and a wide range of cargo carriers, terminals and their Transfer handling equipment shipping partners area Yard Horizontal Transportation Industry leading spreader TOS coordinates and optimises manufacturer the planning and management Quay of container and equipment moves in complex business environments. Navis provides also maritime shipping solutions:  Stowage planning  Vessel monitoring  Loading computer  Route planning Investor presentation February 2020 18

Services provide our biggest medium-term growth opportunity Equipment & Projects Software Services Market share 20-30% 20-30% 3-5% Market 8B€ 6B€ 0.5- 1B€ size Investor presentation February 2020 19