12.02.2016

Hiab & Kalmar soar

Hiab and Kalmar owner Cargotec has reported a strong year and an excellent fourth quarter for the two companies

Hiab and Kalmar owner has reported a strong year and a dazzling fourth quarter for the two divisions, while its third business Macgregor suffered from the slowdown in the offshore energy business.

Hiab
Full year revenues at Hiab increased 10 percent to €928 million, while order intake outpaced shipments at €967 million, leaving the order book at the end of December at €305 million, 15 percent higher than at the end of 2014. Operating profit for the Hiab more than doubled – rising 135 percent to €99.6 million.
In the fourth quarter revenues increased 18 percent to €249 million, while operating income jumped around 165 percent to €31 million. Order intake was eight percent higher at €250 million.

Kalmar
Reachstacker and port crane company Kalmar had full year revenues of €1.66 billion, 12 percent higher than in 2014. Order intake in the same period increased 19 percent to €1.76 billion, leaving an order book of €877 million. Operating profit also more than doubled rising 130 percent to €127.3 million.
Looking at the fourth quarter revenues improved by a more modest four percent to €468 million, order intake increased by the same percentage to €395 million. Operating income was 34.8 million just four percent higher than last year.

MacGregor
MacGregor fared less well towards the end of the year, but year to date revenues are still 10 percent higher at €1.14 billion, but operating income plunged from almost €52 million in 2014, to €15.8 million in 2015. Revenues in in the fourth quarter dropped 14 percent to €259 million while last years profit of €22 million turned into a loss of €13.6 million.

Cargotec as a whole ended the year with revenues of €3.73 billion 11 percent higher than the prior year, while pre-tax profits almost doubled to €186.2 million.

Cargotec chief executive Mika Vehviläinen said: “The year was a milestone for Cargotec with regard to our set targets. Kalmar and Hiab reached the profitability improvement measures two years ago ahead of time by the end of the second quarter. MacGregor's market situation is challenging, but we are confident that we are taking the correct measures in order to adapt to the situation in that business area. Orders received were strong also in the fourth quarter in Kalmar and Hiab, and therefore, orders for the full year 2015 reached the previous year's level despite clearly lower orders for MacGregor”.

“Towards the end of the year, we updated our strategy with the aim of transforming Cargotec into a market leader in intelligent cargo handling by building on services, digitalisation and people leadership. We will invest in R&D in order to ensure that our products remain market leaders and ahead of our competitors' products. We will develop our portfolio by investing in businesses with high growth, as well as by complementing our technological competence and geographical coverage. In particular, we will invest in competence development in order to accelerate our transformation process”.

“We have also updated our financial targets: the new goals for each of the business areas are to reach 10 percent operating profit margin over the cycle as well as to grow faster than the market, and for the group to reach 15 percent return on capital employed over the cycle. These targets reflect our growth strategy and expected high return on the planned investments”.

Vertikal Comment

This is a cracking result from Cargotec as both Hiab and Kalmar really begin to gather momentum, the change in the two business over the last couple of years, following the return to more decentralisation has been spectacular. There was a point where it looked like Hiab was on a slow – or perhaps not so slow - decline to oblivion leaving the market to Palfinger, Fassi and others. A sad situation for such a pioneer in the loader crane business and such a strong brand.

However the company is reformed has bounced back and is 'cooking on gas', it stand a very chance of recapturing the loader crane market leadership or at least keeping up and narrowing the gap with Palfinger. It is good to see. A market needs two or three dynamic players if it is to grow, develop and innovate.

A first class performance.