Q1 2016 Milan road show – 25 May 2016...Q1 2016 Milan road show – 25 May 2016 . President and...
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Transcript of Q1 2016 Milan road show – 25 May 2016...Q1 2016 Milan road show – 25 May 2016 . President and...
Q1 2016 Milan road show – 25 May 2016
President and CEO Mika Vehviläinen
Cargotec in brief
May 2016 3
Cargotec Group Sales: EUR 3,729 million EBIT: 6.2% Services: 24%
MacGregor 30% of sales EBIT: 2.6% Services: 20%
Geographical split of sales in 2015 Geographical split of sales in 2015 Geographical split of sales in 2015
Today’s leader in cargo handling equipment
May 2016 4
EMEA
APAC
AMER
EMEA
APAC
AMER EMEA
APAC
AMER
Figures: 2015 EBIT % excluding restructuring costs
Kalmar 45% of sales EBIT: 7.8% Services: 26%
Hiab 25% of sales EBIT: 10.8% Services: 23%
Key competitors
May 2016 5
MacGregor Kalmar Hiab
From turnaround to leader in intelligent cargo handling with sector leading profitability
10% operating profit margin (EBIT) in each business area over the cycle
Turnaround is delivering results in Hiab and Kalmar; MacGregor has improvement plan in place
Transformation has started from equipment business to world class services offering and leadership in intelligent cargo handling
Investing to ensure a leading position
Shaping the portfolio to increase shareholder value
May 2016 6
Investing in our transformation to be the leader in intelligent cargo handling
May 2016 7
PRODUCT LEADERSHIP Good equipment company Product R&D drives offering development
SERVICES LEADERSHIP World-class service offering Connected equipment and data analytics building value on data Significant software business
LEADER IN INTELLIGENT CARGO HANDLING 40% of the sales from services and software More efficient and optimised cargo handling solutions
2020
2018
2013
Must-win battles to support transformation
Lead digitalisation
Build world-class leadership
Build world-class services offering
May 2016 8
Committed to improve shareholder return
May 2016 9
Gearing Dividend
of earnings per share
Group targets
<50% 30-50%
Operating profit margin (EBIT) in each business area over the cycle
Growth Faster than market growth
Business area targets
10%
15%
Return on capital employed over the cycle (ROCE pre-tax)
May 2016 10
Well positioned to become the leader in intelligent cargo handling Execution capabilities in place and profitability improving
Building on tremendous strengths
Transforming from equipment company to a company that will shape the cargo handling industry
Investing to ensure a leading position
Shaping our portfolio to drive growth and shareholder value
Kalmar
May 2016 11
Container throughput forecasted to grow year on year
May 2016 12
359 375 399 406 415 429 469 490
169 172 182 180 182 186 198 207 94 95 99 101 104 108 113 116
0
200
400
600
800
1 000
2012* 2013* 2014* 2015* 2016* 2017* 2018** 2019**
APAC EMEA AMER
Source: Drewry: Global Container Terminal Operators Annual Report 2015** & Container forecaster Q1 2016*
622 642 680 687 702 722
813
+3.4% +5.7%
+1.1% +2.1%
+2.9%
1,000
779
TEU ’000
Kalmar has strong position in attractive segments
Automation & Projects
Mobile equipment
Bromma
Navis
Services
Market position Trend Market size
#1-2
EUR 7.5 billion #1
#1
#1
#1 EUR 7.6 billion
Over 80% of Kalmar business is in ports and terminals
May 2016 13
Kalmar’s profit improvement potential 2016-2018
2015 2016 2017 2018
Automation
Software
Mobile equipment
Services Excel in spare parts
Project delivery capability development
Expand Rainbow Cargotec Industries (China) joint venture offering
Continuous improvements in design-to-cost and sourcing
Strengthen distribution network
Expand software business
Further development of integrated port automation solutions
+20-30 EUR million
Total 60-100
EUR million improvement
potential
+10-20 EUR
million
+20-30 EUR million
+10-20 EUR million
May 2016 14
Kalmar’s focus on profitable growth
10% operating profit margin (EBIT) over the cycle
Solid foundation for further improvement
Win in automation
Grow in software
Sustain global leadership in mobile equipment
Digital services and spare parts excellence
May 2016 15
Hiab
May 2016 16
Construction output driving growth opportunity
EMEA construction output AMER construction output
May 2016 17
y/y change (%) y/y change (%)
0
20
40
60
80
100
120
-14
-12
-10
-8
-6
-4
-2
0
2
4
Index Change %
0
20
40
60
80
100
120
-10
-8
-6
-4
-2
0
2
4
6
Index Change %
Source: Oxford Economics: Industry output forecast 4/2016
Hiab has strong positions in attractive markets
May 2016 18
Loader cranes
Tail lifts
Demountables
Truck-mounted forklifts
Forestry cranes
Market size (€B) Growth Hiab position & trend
1.3 GDP #2
0.5 GDP+
0.4 GDP
0.2 GDP+
0.2 GDP #2
#1
#1
#1
Hiab’s key growth drivers are:
Cranes
Tail lifts
Truck-mounted forklifts
Services
Gain market share in big loader cranes and crane core markets
Enter fast growing emerging markets and standardise and globalise business model
Accelerate penetration in North America and Europe
Increase spare parts capture rates driven by connectivity and e-commerce
May 2016 19
Hiab’s investments for profitable growth
10% operating profit margin (EBIT) over the cycle
E2E value chain – optimise our distribution network and supply chain
Product innovation – strengthening our market positions
Digitalisation – all new products connected by 2018
Services – further expand our offering
May 2016 20
MacGregor
May 2016 21
Merchant shipping and offshore markets currently challenging
Long-term contracting 2005–2025 Merchant ships > 2,000 gt
Avg
2006
2008
2010
2012
2014
2016
2018
2020
2022
2024
Long-term contracting 2012–2022 Mobile offshore units
0
100
200
300
400
500
600
700
800
900
Avg
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
May 2016 22
Sources: UNCTAD, Clarkson Research, March 2016
No of units
Forecast History
Hist avg 2005-2015
No of ships
5,000
4,000
3,000
2,000
1,000
0
Hist avg 1996-2015
Forecast History
Marine
MacGregor has strong positions in both the marine and offshore market
May 2016 23
Hatch covers Container lashing
Offshore advanced load handling
Offshore winches
Offshore
Cranes and selfunloaders
RoRo
#1 #1-2
#1 #2
#1 #1
RoRo=roll-on/roll-off
Mooring systems
#1 #1
Loading and offloading systems
Cost reduction and cost control measures set in place in MacGregor in 2015 Reduction of over 300 employees
Organisational development
Targeted annual savings of EUR 27 million
Measures taken in 2015 will have a full impact in 2016
May 2016 24
Headcount reduced by 11% Internal headcount 2,900
2,800
2,700
2,600
2,500
2,400
2,300
2,200 Status
1.1.2015Key position
increasesServicesbranches
restructuring
Uetersenrestructuring
Norway andSingaporeoffshoredivisions
Otherrestructuring
Status1.1.2016
MacGregor’s asset-light business model gives flexibility
Cost-efficient scaling
85% of manufacturing outsourced
30% of design and engineering capacity outsourced
May 2016 25
MacGregor MacGregor
Manufacturing Installation Lifecycle support
Sales & marketing
Design & engineering
MacGregor
Outsourced
MacGregor
Outsourced Outsourced
MacGregor
Outsourced
MacGregor is improving profitability
10% operating profit margin (EBIT) over the cycle
Improving profitability by cost reductions, product and project cost improvements, services development Cost reduction measures started in 2015 will
result in targeted EUR 27 million annual savings Targeted savings of EUR 10 million from design-
to-cost will materialise in 2016 Share of services will exceed 25% of sales in
2016 Asset-light model with 85% of manufacturing
outsourced allows for cost-efficient scaling
80% of orders for 2016 in backlog by the end of the year
May 2016 26
January–March financials
May 2016 27
Highlights of the first quarter
Market situation for Kalmar and Hiab healthy, but challenging for MacGregor
Order book remained strong at EUR 2,095 million, orders received at EUR 903 (939) million
Sales declined 7% y-o-y- to EUR 828 (889) million
Operating profit excluding restructuring costs increased 12% and totalled EUR 58.5 (52.3) million or 7.1 (5.9)% of sales
Operating profit was EUR 57.7 (51.3) million
Cash flow from operations strong at EUR 90.8 (51.6) million, gearing at 45.3%
INTERSCHALT acquisition
May 2016 28
Market environment in the first quarter
Demand for container handling equipment, and services as well as interest for automation solutions was healthy
Market for load handling equipment was strong in the US, in Europe, market situation showed slight positive development
Market for marine cargo handling equipment was weak Demand for RoRo and special vessel
related cargo handling equipment grew and was active
May 2016 29
First-quarter key figures
May 2016 30
*excluding restructuring costs
1–3/16 1–3/15 Change 2015 Orders received, MEUR 903 939 -4% 3,557
Order book, MEUR 2,095 2,469 -15% 2,064
Sales, MEUR 828 889 -7% 3,729
Operating profit, MEUR* 58.5 52.3 12% 230.7
Operating profit margin, %* 7.1 5.9 6.2
Cash flow from operations, MEUR 90.8 51.6 314.6
Interest-bearing net debt, MEUR 603 789 622
Earnings per share, EUR 0.61 0.56 2.21
Kalmar Q1 – order intake continued strong
Order intake at comparison period’s level or EUR 454 (455) million
Order book strengthened 11% from 2015 year-end level to EUR 973 million
Sales declined 7% y-o-y to EUR 367 (395) million due to the timing of the deliveries
Profitability excluding restructuring costs was 7.0%
May 2016 31
455 454
395 367
4
6
8
10
0
100
200
300
400
500
Q1/15 Q2/15 Q3/15 Q4/15 Q1/16
Orders Sales Operating profit%*
MEUR %
*excluding restructuring costs
7.4 7.0
Hiab Q1 – strong development continued
Orders grew 8% y-o-y to EUR 275 (256) million
Order book strengthened 8% from 2015 year-end to EUR 328 million
Sales grew 16% y-o-y to EUR 246 (212) million
Profitability excluding restructuring costs was 13.2%
May 2016 32
256 275
212
246
4
6
8
10
12
14
0
50
100
150
200
250
300
Q1/15 Q2/15 Q3/15 Q4/15 Q1/16
Orders Sales Operating profit%*
MEUR %
*excluding restructuring costs
9.0
13.2
MacGregor Q1 – satisfactory profitability
Order intake declined 24% y-o-y to EUR 173 (228) million
Order book decreased 10% from 2015 year-end to EUR 795 million
Sales declined 23% y-o-y to EUR 216 (282) million
Profitability excluding restructuring costs was 4.2% supported by restructuring measures in 2015
May 2016 33
228
173
282
216
-4
-2
0
2
4
6
0
100
200
300
400
Q1/15 Q2/15 Q3/15 Q4/15 Q1/16
Orders Sales Operating profit%*
MEUR %
*excluding restructuring costs
4.4 4.2
Cash flow from operations strong
May 2016 34
33 52
91
0
50
100
150
200
250
300
350
2013 2014 2015 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16
MEUR
Balanced geographical mix in sales
May 2016 35
44%
30%
26%
Kalmar Hiab MacGregor
39%
28%
33%
EMEA APAC Americas
Equipment 77 (78)% Services 23 (22)%
Equipment 71 (73)% Services 29 (27)%
Equipment 77 (76)% Services 23 (24)%
Sales by reporting segment 1–3/2016, % Sales by geographical segment 1–3/2016, %
(39)
(32)
(29)
(44)
(24)
(32)
Sales by geographical segment by business area 1–3/2016
May 2016 36
Kalmar Hiab MacGregor
APAC 63% (63) APAC 21% (21)
EMEA 29%
Americas 8% (7) Americas 40% (37)
EMEA 47% (48) (30)
Americas 44% (42)
EMEA 39%
APAC 9% (10)
(42)
Positive development in key financial metrics continued
2
4
6
8
10
12
14
16
2010 2011 2012 2013 2014 2015 Q1/16
ROCE Operating profit margin %*
May 2016 37
%
ROCE, annualised *excluding restructuring costs
10.8
7.1
2016 outlook unchanged
Cargotec’s 2016 sales are expected to be at the 2015 (EUR 3,729 million) level or slightly below.
Operating profit excluding restructuring costs for 2016 is expected to improve from 2015 (EUR 230.7 million).
May 2016 38
