08.02.2018

Billion Euro year for Hiab

Hiab has reported a €billion year in terms of revenues, with a strong improvement in profitability.

Looking at the full year numbers Hiab revenues were five percent higher at €1.08 billion with order intake up 10 percent to €1.12 billion. Operating profits for the year were 13 percent higher at €157.1 million. Sister company Kalmar saw revenues decline five percent to €1.6 billion, with order intake down 10 percent to €1.55 billion, operating profit however was 13 percent higher at €130.2 million.

Moving on to the fourth quarter Hiab sales were up nine percent to €280 million, on order intake two percent higher at €289 million. The order book at the end of December was five percent up on the same time last year at €299 million. Operating profits for the quarter jumped 23 percent to €39.9 million. Kalmar revenues were flat at €479 million, while order intake fell 16 percent to €369 million. Operating profits at the port handling business were 31 percent higher however at €41.7 million.

Cargotec as a whole – which also includes MacGregor – reported a seven percent fall in revenues to €3.28 billion however pre-tax profit climbed 15 percent to $193.8 million.

Cargotec chief executive Mika Vehviläinen said: “2017 was as a year of changes in our industry. We saw large-scale consolidation, as shipping lines formed alliances and reorganised cargo handling routes. The shipping market was still recovering from severe overcapacity. The on road load handling market was strong both in the US and in Europe.”

“In terms of orders received, the year was twofold for us: orders received declined in Kalmar and MacGregor, but the strong development in Hiab continued. In Kalmar, the development in the project business did not meet our expectations. MacGregor's orders grew during the second half of the year. Hiab's orders received grew in all our main markets supported by the good level of construction activity, and the development was strong especially in Europe.”

"Also, sales declined at Kalmar and MacGregor but grew in Hiab. The delivery volumes were in line with our expectations in the fourth quarter. We are satisfied that we were able to grow our operating profit despite the sales being lower than in the previous year. We expect that our operating profit, excluding restructuring costs, will improve also in 2018.”

“Strategy implementation, driven by our three must win battles - digitalisation, services and leadership - progressed well. A number of new digital products were introduced during the year. We have an ambitious approach to development and to delivering our promise to be the leader in intelligent cargo handling in 2020. In addition to our product and system level digitalisation initiatives, we have launched several projects that focus on utilising robotics and artificial intelligence both internally and in our commercial offering.”

“During the year, we were also able to agree on three interesting acquisitions. Argos is one of Brazil's leading loader crane manufacturers. With the acquisition, Hiab will extend its operations to the Brazilian market. MacGregor agreed to acquire Rapp Marine Group in order to strengthen its offering for the fishery and research vessel segment. In addition, Kalmar acquired the port services business of Inver Engineering in Australia. Our balance sheet is strong, enabling further acquisitions.”

Vertikal Comment

This is another great result from Hiab which has been gaining momentum for the past three years. The company continues to make progress and looks set to have a fifth year of growth in 2018.

Kalmar on the other hand has been struggling to regain its former strength, since a challenging period a few years back. It has not been helped by a challenging, and at times volatile market. But does appear to be regaining its equilibrium following a few years of profit growth.

Cargotec is still struggling a little with MacGregor, but overall the group is on a sound and improving trajectory. Thanks to its more devolved organisation.