22 October 2019 Profitability improved Cargotec’s interim report January–September 2019 Mika Vehviläinen, CEO • Mikko Puolakka, CFO Cargotec’s January-September 2019 interim report 22/10/2019 1
Contents 1. Group level development 2. Business areas 3. Financials and outlook
Highlights of Q3 2019 – strong improvement in operating profit 7.7% 7.6% Comparable operating profit up by 18% 7.2% 7.1% 6.7% compared to Q3/18 70 68 64 Kalmar’s comparable operating profit 58 57 increased by 24% compared to Q3/18 Hiab’s comparable operating profit up by 41% MacGregor’s comparable operating profit was MEUR -5.8 million TTS result has been consolidated into MacGregor's financial figures as of 1 August 2019 Cargotec’s January–September 2019 interim report Q3/18 Q4/18 Q1/19 Q2/19 Q3/19 Mika Vehviläinen, CEO • Mikko Puolakka, CFO Comparable operating profit EUR million Comparable operating profit margin Cargotec’s January-September 2019 interim report 22/10/2019 3
TTS acquisition completed Strategic rationale Overview of the acquired Acquisition business Service growth potential Employs ca. 600 people Acquired businesses represent around 90% of total sales of the Strengthening MacGregor’s Services 26% of revenues TTS Group position also in China Estimated 2019 sales EUR 50 million, Announced enterprise value Based on revised estimates, comparable operating profit at break- EUR 87 million potential cost synergies are even estimated to be around Acquisition was completed on Closing balance sheet expected to be EUR 25-30 million on annual 31 July 2019 completed during Q4 level TTS results have been Restructuring costs ca. EUR 40 million consolidated into MacGregor's in 2019 financial figures as of 1 August 2019 Cargotec’s January-September 2019 interim report 22/10/2019 4
Market Global container throughput (MTEU) – Key driver for Kalmar Source: Drewry environment 600 603 588 500 +2.6% 400 1-9/2019 300 200 100 0 1-9/18 1-9/19 Growth in number of containers handled at ports continued Construction output – Key driver for Hiab Source: Oxford Economics Customers are starting automation United States Europe projects mainly with phased investments +0.5% +3.0% Construction activity increased in Europe and grew slightly in the US 1-9/18 1-9/19 1-9/18 1-9/19 In the merchant sector, the orders Long term contracting – Key driver for MacGregor Source: Clarkson Research (number of ships and offshore units) received remained at a low level Merchant ships > 2,000 gt (excl. ofs & misc) Offshore mobile units Indicative historical average In offshore, activity remained on a 2,000 500 Historical average 400 low level. Sales declined slightly Historical average 1,500 300 1,000 200 -19% 56 500 683 32 100 554 -43% 0 0 1-9/18 1-9/19 1-9/18 1-9/19 Cargotec’s January-September 2019 interim report 22/10/2019 5
Orders received declined from the comparison period Orders received MEUR 1,200 1,022 991 981 1,000 921 165 872 863 131 858 184 -19 % +10% 141 784 116 (y/y) 800 124 156 (y/y) 126 301 341 294 357 600 307 340 +4% 307 289 (y/y) 400 550 516 486 450 -19% 432 417 200 396 369 -19 % (y/y) (y/y) 0 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Kalmar Hiab MacGregor Cargotec’s January-September 2019 interim report 22/10/2019 6
Order book increased Order book Order book by reporting MEUR segment, Q3 2019 2,400 2,251 2,145 2,200 2,072 1,995 2,000 1,887 1,786 712 536 32% -11 % 519 1,800 1,684 530 (y/y) 513 1,600 503 519 1,400 483 453 458 453 1,200 371 337 1,000 329 800 600 48% 1,127 1,101 1,083 1,003 1,012 947 837 400 200 20% 0 0 0 0 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 Q3/19 Kalmar Hiab MacGregor Kalmar Hiab MacGregor Cargotec’s January-September 2019 interim report 22/10/2019 7
Sales increased, comparable operating profit up by 18% Sales Comparable operating profit MEUR MEUR 1,000 80 910 911 69.6 901 68.3 64.3 856 70 816 805 127 57.8 57.2 57.4 149 170 60 139 750 133 130 50 358 318 40 307 316 260 295 500 30 20 10 250 444 427 424 415 401 0 389 -10 0 -20 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 Q3/19 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 Q3/19 Kalmar Hiab MacGregor Kalmar Hiab MacGregor Cargotec total EBIT* *) Including Corporate admin and support Cargotec’s January-September 2019 interim report 22/10/2019 8
Service and software sales increased Service and software* sales Q3 2019 service sales Services MEUR Software Kalmar +4% • +3% in comparable FX and adjusted for 350 divestments Hiab +14% 300 44 47 41 MacGregor +27% 38 29 39 250 Total service sales +7% in comparable FX and adjusted for 200 acquisitions and divestments 150 Software sales +11% 269 259 257 249 247 239 100 Service and software sales 50 constituted 34% of total sales in 1-9/19 0 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 Q3/19 *Software sales defined as strategic business unit Navis and automation software Cargotec’s January-September 2019 interim report 22/10/2019 9
Business areas Cargotec’s January-September 2019 interim report
Kalmar Q3 – comparable operating profit increased MEUR Q3/19 Q3/18 Change Orders received decreased Orders 396 486 -19% Decline in automation solutions, received projects and in mobile equipment Order book 1,083 1,003 +8% Sales increased Sales 424 415 +2% Services growth +3% in Comparable 47.8 38.6 +24% comparable FX and adjusted for operating divestments profit Comparable 11.3% 9.3% +196bps Profitability improvement driven operating by growth in sales and by a profit margin favourable mix Cargotec’s January-September 2019 interim report
Hiab Q3 – solid orders continued MEUR Q3/19 Q3/18 Change Orders received grew by 4% Orders 307 294 +4% Growth in the Americas (+27%), received decline in EMEA (-7%) Order book 458 371 +23% Sales +18% Sales 307 260 +18% Sales +12% excl. Effer acquisition Comparable 34.1 24.2 +41% Service sales +14% operating profit Comparable operating profit Comparable 11.1% 9.3% +179bps increased due to growth in sales operating profit margin Cargotec’s January-September 2019 interim report
MacGregor Q3 – further productivity actions required Orders received increased by 10% MEUR Q3/19 Q3/18 Change Decline in equipment orders, Orders 156 141 +10% service orders +30% received Order book 712 513 +39% Sales increased by 31% Sales growth excl. TTS 17% Sales 170 130 31% Service sales +27%, +9% excl. TTS Comparable -5.8 1.0 < -100% operating Comparable operating profit profit declined Comparable -3.4% 0.8% -417bps Low capacity utilisation, lower sales operating profit margin margins, and cost overruns in certain offshore projects Productivity improvements are ongoing TTS consolidated since 1 August 2019 Cargotec’s January-September 2019 interim report
Financials and outlook Cargotec’s January-September 2019 interim report
Key figures – profitability improved 7-9/19 7-9/18 Change 1-9/19 1-9/18 Change 858 921 -7% 2,752 2,766 0% Orders received, MEUR 2,251 1,887 +19% 2,251 1,887 +19% Order book, MEUR 901 805 +12% 2,669 2,394 +11% Sales, MEUR 68.3 57.8 +18% 190.0 172.5 +10% Comparable operating profit, MEUR 7.6% 7.2% Comparable operating profit, % 7.1% 7.2% -10.5 Items affecting comparability, MEUR -3.3 < -100% -28.1 -43.4 +35% 57.9 54.5 Operating profit, MEUR 6% 162.0 129.1 +26% 6.4% 6.8% Operating profit, % 6.1% 5.4% Net income, MEUR 29.7 37.9 -22% 89.7 73.9 +21% Earnings per share, EUR 0.46 0.58 -21% 1.39 1.13 +23% Earnings per share, EUR* 0.56 0.63 -11% 1.68 1.71 -2% Cargotec’s January-September 2019 interim report 22/10/2019 15 *) Excluding items affecting comparability and adjusted with related tax effect
Cash flow from operations improved Cash flow from operations before financing items and taxes MEUR 120 112 100 88 86 81 80 60 41 40 40 31 27 17 20 12 0 -4 -20 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 Q3/19 Cargotec’s January-September 2019 interim report 22/10/2019 16
Strong financial Net debt and gearing MEUR position 64.5% 1,200 59.2% 60% 1,000 46.7% 46.4% 43.8% 178 800 36.0% Two bonds issued in Q3 in the 40% 33.1% 749 600 719 aggregate amount of EUR 250 million 622 625 578 400 503 472 20% 200 Interest-bearing net debt EUR 927 0 0% million (31 Dec 2018: 625) 2013 2014 2015 2016 2017 2018 Q3/19 Average interest rate* 1.8% (2.4%) Net debt IFRS 16 Lease liability** Gearing-% Net debt/EBITDA 2.8 (2.3) Maturity profile Net debt and gearing increased MEUR mainly due to IFRS 16 300 273 Gearing without IFRS 16 250 approximately 52% 198 200 166 150 142 Total shareholders’ equity 150 125 100 EUR 1,434 million (1,426) 100 Equity/total assets 36.0% (40.9%) 50 0 Balanced maturity profile 2019 2020 2021 2022 2023 2024 Later EUR 150 million loans maturing in 2019 *Excluding on-balance sheet lease liabilities Cargotec’s January-September 2019 interim report 22/10/2019 17 **IFRS 16 transition adjustment 1 January 2019
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