2010-04-29 07:30:00 CEST
2010-04-29 07:32:21 CEST
REGULATED INFORMATION
Cargotec - Interim report (Q1 and Q3)
Cargotec's Interim Report January-March 2010 - Order intake illustrates market improvement
CARGOTEC CORPORATION, INTERIM REPORT, 29 APRIL 2010 AT 8:30 AM EEST
Cargotec's Interim Report January-March 2010 - Order intake illustrates market
improvement
Report highlights - first quarter
· Orders received totalled EUR 598 (456) million, which was 31 percent
more than in the comparison period.
· Order book was EUR 2,239 (31 Dec 2009: 2,149) million at the end of
the reporting period.
· Sales were EUR 555 (675) million. The decline from the comparison
period was 18 percent.
· Operating profit excluding restructuring costs was EUR 15.8 (15.0)
million, representing 2.8 (2.2) percent of sales.
· Operating profit was EUR 13.5 (6.2) million. Operating profit includes
EUR 2.3 (8.8) million in restructuring costs.
· Cash flow from operating activities before financial items and taxes
totalled EUR 46.5 (59.6) million.
· Net income for the period amounted to EUR 9.8 (1.5) million.
· Earnings per share were EUR 0.13 (0.01).
· Sales and operating profit guidance reiterated.
Cargotec's President and CEO Mikael Mäkinen:"While the market situation improved in the first quarter, it will take time to
return to the pre-recession level. Industrial and Marine businesses saw more
orders than in the previous quarter. Supported by this gradual recovery in the
markets, our guidance for the entire year remains unchanged. Our major
restructuring measures have now been concluded. Investment in our new assembly
factory in Poland has proceeded according to plan and production in rented
facilities has got off to a good start", affirms President and CEO Mikael
Mäkinen.
Press conference for analysts and media
A press conference for analysts and media will be combined with a live
international telephone conference and arranged on the publishing day at 11:00
am (EEST) at Cargotec's head office, Sörnäisten rantatie 23, Helsinki. The event
will be held in English. The interim report will be presented by President and
CEO Mikael Mäkinen. The presentation material will be available on
www.cargotec.com by 11:00 am (EEST).
The telephone conference, during which questions may be presented, may be
accessed at the following numbers ten minutes before the beginning of the event:
US callers +1 334 323 6203, non-US callers +44 20 7162 0125, access code
Cargotec/863070.
The event can also be viewed as a live webcast at www.cargotec.com. An on-demand
audiocast of the conference will be published on Cargotec's website later during
the day.
A replay of the conference call will be available for two days until midnight on
1 May 2010, in the following numbers: US callers +1 954 334 0342, non-US callers
+44 20 7031 4064, access code 863070.
For further information, please contact:
Eeva Sipilä, CFO, tel. +358 204 55 4281
Paula Liimatta, IR Manager, tel.+358 204 55 4634
Cargotec improves the efficiency of cargo flows on land and at sea - wherever
cargo is on the move. Cargotec's daughter brands, Hiab, Kalmar and MacGregor are
recognised leaders in cargo and load handling solutions around the world.
Cargotec's global network is positioned close to customers and offers extensive
services that ensure the continuous, reliable and sustainable performance of
equipment. Cargotec's sales totalled EUR 2.6 billion in 2009 and it employs
approximately 9,500 people. Cargotec's class B shares are quoted on the NASDAQ
OMX Helsinki. www.cargotec.com <http://www.cargotec.com/>
Operating environment
In both Europe and the United States, the tentative recovery in demand for load
handling equipment continued, mainly in areas other than construction-related
customer segments. In particular, demand for loader cranes, truck-mounted
forklifts and forklift trucks as well as tail lifts picked up compared both to
the previous quarter and the same period last year.
Markets for container handling equipment in ports around the world remained to a
large extent quiet. Replacement investments in container handling equipment were
subdued due to low utilisation rates. Meanwhile, uncertainty about the timing of
the recovery in container traffic led customers to further postpone investments.
However, the number of containers handled showed signs of an upturn in the Asian
ports. There has been a modest improvement in container traffic forecasts for
year 2010, which is also supported by a slight rise in tenders at the end of the
quarter.
The market for marine cargo handling equipment showed signs of picking up,
especially in terms of equipment for offshore and bulk vessels. In addition, the
slight increase in demand for RoRo equipment continued. While the amount of
order cancellations for marine cargo handling equipment was low in the first
quarter, shipowners are still expected to postpone or cancel previously made
ship and equipment orders.
Despite signs of recovery glimpsed towards the end of the quarter, especially in
spare parts, the services markets were fairly quiet at the beginning of the
year. However, an improvement in customers' capacity utilisation rates should
feed through into demand for cargo-handling services.
Orders received and order book
Orders received during the first quarter totalled EUR 598 (456) million, which
was 31 percent more than in the comparison period. Orders received increased in
both reporting segments. Previously received orders by Marine for EUR 26 million
were cancelled, and thereafter, removed from the order book during the period.
At the end of March, the order book totalled EUR 2,239 (31 Dec 2009: 2,149)
million. Management estimates that the order book includes some EUR 300 million
of Marine orders, which bear a risk of cancellation.
Orders received by reporting segment
+---------------------+--------+---+--------+---+--------+---------+
|MEUR |1-3/2010| %|1-3/2009| %|Change %|1-12/2009|
+---------------------+--------+---+--------+---+--------+---------+
|Industrial & Terminal| 415| 69| 361| 79| 15| 1,260|
+---------------------+--------+---+--------+---+--------+---------+
|Marine | 183| 31| 96| 21| 91| 569|
+---------------------+--------+---+--------+---+--------+---------+
|Internal orders | 0| | 0| | | -1|
+---------------------+--------+---+--------+---+--------+---------+
|Total | 598|100| 456|100| 31| 1,828|
+---------------------+--------+---+--------+---+--------+---------+
Industrial & Terminal's orders received during the first quarter totalled EUR
415 (361) million, 15 percent higher than a year before. Orders secured mainly
included small individual orders.
During the first quarter, Industrial & Terminal received new orders worth USD
110 million for rough terrain container handlers from Tank-Automotive Armament
Command (TACOM), part of the US Department of Defence. The orders were received
under a five-year production contract signed in 2008. Orders received under this
contract now total approximately USD 350 million.
Industrial & Terminal's order book at the end of the reporting period totalled
EUR 637 (31 Dec 2009: 546) million, which was 17 percent higher than at the end
of 2009.
Marine's orders received during the first quarter accounted for EUR 183 (96)
million, 91 percent more than in the comparison period. Orders were received for
offshore-cranes in particular, as well as cranes and hatch covers for bulk
ships.
During the first quarter, Marine received a major order for two knuckle-jib
cranes from Singapore. The value of this order is approximately EUR 12 million.
These active heave compensated cranes will be installed on an ultra-deepwater
supply vessel and self-propelled accommodation barge. In addition, Marine will
deliver an active heave compensated knuckle-jib crane for an offshore vessel
being built in the Netherlands.
Orders for container lashings, hatch covers and RoRo equipment were also
received during the reporting period. It was agreed with a Korean shipyard that
lashings will be delivered for 17 mega container ships. Lashings will also be
delivered for 13 container ships owned by a Canadian shipowner. Hatch covers for
six bulk ships under construction at a Korean shipyard will be delivered in
2011. This contract follows an order from December 2009 for 24 cranes on the
same vessels. Moreover, a contract was signed for RoRo equipment for six
vessels, and self-unloading systems will be delivered for three cement carriers
for an Indian customer.
Marine's order book at the end of the first quarter was at the year-end level
and totalled EUR 1,602 (31 Dec 2009: 1,604) million. More than 60 percent of the
order book is bulk, general cargo and container ship-related. Offshore support
vessels-related orders comprise more than 10 percent of the order book. Orders
cancelled during the reporting period, EUR 26 million, were removed from the
order book.
Services orders received during the first quarter were at the comparison period
level. Although a large number of small contracts typical of the service
business were signed, customers were delaying decision making related to major
contracts. Major service orders received during the quarter included a
three-year full service contract for RoRo equipment for nine vessels from
Grimaldi and an agreement for conversions of RoRo equipment on three vessels
with a Swedish owner. In addition, a refurbishment project for a cement ship
unloader was received from a Singaporean cement terminal.
Sales
First quarter sales declined 18 percent from the comparison period and totalled
EUR 555 (675) million. In terms of sales, EMEA (Europe, Middle East, Africa) was
the largest market, its share being 42 (54) percent of consolidated sales. The
Americas' share of sales was 18 (17) and that of Asia Pacific 40 (29) percent.
Sales by reporting segment
+---------------------+--------+---+--------+---+--------+---------+
|MEUR |1-3/2010| %|1-3/2009| %|Change %|1-12/2009|
+---------------------+--------+---+--------+---+--------+---------+
|Industrial & Terminal| 314| 57| 457| 68| -31| 1,573|
+---------------------+--------+---+--------+---+--------+---------+
|Marine | 241| 43| 218| 32| 11| 1,009|
+---------------------+--------+---+--------+---+--------+---------+
|Internal sales | 0| | 0| | | -1|
+---------------------+--------+---+--------+---+--------+---------+
|Total | 555|100| 675|100| -18| 2,581|
+---------------------+--------+---+--------+---+--------+---------+
Industrial & Terminal's sales for the first quarter totalled EUR 314 (457)
million, which was 31 percent less than a year before. This sales decline was a
result of the clearly lower order book at the end of the year compared to that
of a year before. Moreover, sales for the first quarter were lower than
expected. Changes in cranes required by the EU Machinery Directive were executed
at the beginning of the year in parallel with ongoing transfers of production
between assembly factories. This together with higher order intake lead to
temporary bottle necks in production. The process of ramping-up production to
meet increased demand is in progress.
Marine's sales for the first quarter totalled EUR 241 (218) million,
representing 11 percent growth on the comparison period.
Services sales during the first quarter amounted to EUR 158 (175) million,
representing 28 (26) percent of total sales. Services sales amounted to EUR 113
(120) million at Industrial & Terminal, representing 36 (26) percent of the
reporting segment's sales. Services sales at Marine amounted to EUR 44 (55)
million, which was 18 (25) percent of its sales.
Financial result
The operating profit for the first quarter increased from the comparison period
totalling EUR 13.5 (6.2) million. Operating profit includes EUR 2.3 (8.8)
million in restructuring costs, of which EUR 1.6 (8.3) million are related to
Industrial & Terminal, EUR 0.1 (-) million to Marine and EUR 0.6 (0.5) million
to corporate functions.
Operating profit for the first quarter, excluding restructuring costs, was EUR
15.8 (15.0) million, representing 2.8 (2.2) percent of sales. Operating profit
for Industrial & Terminal, excluding restructuring costs, was EUR -7.3 (5.6)
million and EUR 34.3 (18.4) million for Marine.
Industrial & Terminal's operating profit was burdened by low volumes during the
first quarter. In addition, profitability was hampered by additional costs
related to challenges in ramping-up production. Marine's deliveries during the
first quarter were still related to high-margin orders received prior to the
downturn.
Net financing expenses were EUR -6.7 (-5.3) million for the first quarter.
Net income for the first quarter was EUR 9.8 (1.5) million and earnings per
share EUR 0.13 (0.01).
Balance sheet, cash flow and financing
The consolidated balance sheet total was EUR 2,721 (31 Dec 2009: 2,687) million
at the end of the reporting period. Equity attributable to the equity holders of
the company was EUR 895 (871) million representing EUR 14.58 (14.20) per share.
Return on equity (ROE) was 4.4 (31 Mar 2009: 0.7) percent, return on capital
employed (ROCE) 3.8 (31 Mar 2009: 1.9) percent and the total equity/total assets
ratio 38.4 (37.5). Tangible assets on the balance sheet were EUR 309 (301)
million and intangible assets EUR 814 (784) million.
Cash flow from operating activities before financial items and taxes for the
first quarter was EUR 46.5 (59.6) million. At the end of the reporting period,
net working capital was EUR 116 million, which was EUR 8 million lower than at
year-end.
Cargotec's liquidity is healthy. The dividend payment totalled EUR 24.4 (34.4)
million.
Net debt on 31 March 2010 was EUR 336 (31 Dec 2009: 335) million, including EUR
612 (612) million in interest-bearing debt. Gearing fell to 37.1 (38.0) percent
despite of dividend payment in March.
Cargotec's financing structure is healthy. Interest-bearing debt consists mainly
of long-term corporate bonds maturing from the year 2012. Cargotec had EUR 585
million of unused long-term credit facilities at the end of the reporting
period.
New products and product development
Research and product development expenditure for the first quarter was EUR 9.5
(9.8) million, representing 1.7 (1.5) percent of sales.
Cargotec strengthened its position as an industry pioneer in the development of
sustainable and safe cargo and load handling solutions during the first quarter.
Numerous new features and technological solutions in compliance with the new
Machinery Directive 2006/42/EC have been implemented on Hiab cranes, to render
them more productive and avoid worksite accidents. In addition, the launch of
the EcoService concept in February will aim at bringing new levels of cost
efficiency, productivity and reliability to customers' operations.
In March, Cargotec signed an agreement with the multinational Ros Roca
Environment, according to which Cargotec will undertake the representation of
Dennis Eagle and Ros Roca waste compactors for refuse collection vehicles in
Finland, Sweden and Norway. This cooperation comprises sales, marketing and
service. In addition, three new hooklifts were introduced in the demountable
product family.
Cargotec has designed an innovative vehicle transfer system for the US Navy to
transfer military vehicles including tanks between ships at sea. Sea trials were
successfully completed during the reporting period. The aim is to provide the US
military with the capability for large-scale logistics movements from sea to
shore without dependency on foreign ports.
Capital expenditure
Capital expenditure for the reporting period, excluding acquisitions and
customer financing, totalled EUR 17.2 (17.7) million. Investments in customer
financing were EUR 2.4 (10.0) million. Depreciation for the first quarter
amounted to EUR 12.8 (14.6) million.
In 2009, Cargotec made the decision to invest in a multi-assembly unit (MAU) in
Stargard Szczecinski in Northern Poland. Production began in rented premises at
the end of the third quarter of 2009. Production in Cargotec's own premises at a
new site is planned for the second quarter of 2010. This investment proceeded
according to plan during the reporting period and the cash flow impact of the
investment cost was EUR 6 million for the first quarter.
Acquisitions and disposals
In March, Cargotec signed a letter of intent to acquire the remaining 25 percent
minority share holding in MacGREGOR-Kayaba Ltd in Japan. After the transaction,
Cargotec's ownership in the company will increase from 75 percent to 100
percent. The transaction is expected to close during Q2 of 2010.
In January, Cargotec sold its US-based hydraulic cylinders manufacturing
business Waltco Hydraulics to Ligon Industries, LLC. Waltco Hydraulics, situated
in Ohio, was part of Waltco Lift Corp. belonging to the Industrial & Terminal
business area at Cargotec. Waltco Hydraulics employed 25 people.
Personnel
Cargotec employed 9,509 (11,467) people at the end of the reporting period, 97
fewer than at the end of 2009. Number of personnel declined due to finalised
restructuring measures. Industrial & Terminal employed 6,960 (8,694) people and
Marine 2,197 (2,495). The average number of employees for the first quarter was
9,447 (11,649).
At the end of the reporting period, 19 (20) percent of Cargotec's total
employees were located in Sweden, 11 (12) percent in Finland and 31 (31) percent
in the rest of Europe. North and South American personnel represented 11 (10)
percent, Asia Pacific 26 (25) percent and the rest of the world 3 (2) percent of
total employees.
Adjusting capacity to demand and other restructuring measures
Capacity adjustments and other restructuring measures that began in 2008 were
finalised during the reporting period. As a result, the number of employees fell
by approximately 3,200: some 2,860 in Industrial & Terminal, 350 in Marine and
10 in group administrative functions.
Restructuring initiatives, including structural capacity adjustment measures,
are estimated to create total annual cost savings exceeding EUR 150 million.
This savings estimate includes all cost structure streamlining actions announced
since the beginning of 2008. By end of the first quarter, the running rate of
savings achieved was EUR 150 million.
Changes in the organisation and management
Cargotec's governance model was further developed, resulting in changes in the
responsibilities of three Executive Board members as of 1 April 2010. Pekka
Vauramo was appointed Chief Operating Officer (COO) and will continue as Deputy
to CEO. Previously, he led the Industrial & Terminal business area. In his new
role, Mr Vauramo is responsible for Cargotec's three business areas and three
regions.
As of 1 April 2010 Cargotec's businesses was reorganised into three business
areas: Marine, Industrial & Terminal and Services. As announced earlier,
Cargotec's financial reporting is based on two reporting segments: Marine and
Industrial & Terminal. In financial reporting, the Services business is included
in the figures of these two reporting segments, while its sales will continue to
be reported as additional information.
The development of services in both Marine and Industrial & Terminal segments is
driven by a joint Services organisation. Stefan Gleuel, who previously led
Service Solutions in the Industrial & Terminal business area, was appointed
Executive Vice President, Services. The Industrial & Terminal organisation
encompasses the previous Product Solutions organisation. Unto Ahtola, who was
previously responsible for Product Solutions, Industrial & Terminal, was
appointed to lead the Industrial & Terminal business area as Executive Vice
President.
Other members of the Cargotec Executive Board are: Mikael Mäkinen, President and
CEO; Olli Isotalo, Executive Vice President, Marine business area; Axel
Leijonhufvud, Executive Vice President, Supply; Eeva Sipilä, Executive Vice
President, Chief Financial Officer; Kirsi Nuotto, Executive Vice President, HR
and Communications; Matti Sommarberg, Executive Vice President, Chief Technology
Officer; Harald de Graaf, Executive Vice President, EMEA region; Ken Loh,
Executive Vice President, Asia Pacific region and Lennart Brelin, Executive Vice
President, Americas region.
Senior Executive Vice President, Kari Heinistö, and Executive Vice President of
Hiab business area, Pekka Vartiainen, left the Executive Board in January.
Annual General Meeting
Decision taken at Cargotec Corporation's Annual General Meeting
Cargotec Corporation's Annual General Meeting (AGM) was held on 5 March 2010 in
Helsinki. The AGM approved the financial statements and consolidated financial
statements and granted discharge from liability to the President and CEO and the
members of the Board of Directors for the accounting period 1 January-31
December 2009.
The AGM approved a dividend of EUR 0.39 per class A share and EUR 0.40 per class
B share outstanding be paid.
The number of the members of the Board of Directors was confirmed at seven.
Tapio Hakakari, Ilkka Herlin, Peter Immonen, Karri Kaitue, Antti Lagerroos and
Anja Silvennoinen were re-elected to the Board of Directors. Teuvo Salminen was
elected as a new member to the Board of Directors. The meeting decided that a
yearly remuneration of EUR 80,000 be paid for the Chairman, EUR 55,000 for the
Deputy Chairman and EUR 40,000 for the other Board members. In addition, it was
decided that members receive EUR 500 for attendance at Board and Committee
meetings and that 30 percent of the yearly remuneration will be paid in Cargotec
Corporation's class B shares and the rest in money.
Authorised public accountants Johan Kronberg and PricewaterhouseCoopers Ltd were
re-elected as auditors.
Stock options
The AGM confirmed that stock options will be issues to the key personnel of
Cargotec and its subsidiaries. The maximum total number of stock options issued
will be 1,200,000 and the stock options entitle their owners to subscribe for a
maximum total of 1,200,000 new class B shares in Cargotec or existing class B
shares held by the Company. The share subscription price will be based on the
volume weighted average price of the Company's class B share on the NASDAQ OMX
Helsinki Ltd. during two full weeks following the AGM in 2010, 2011 and 2012.
More information about stock options follows in the section "Shares and trading,
Stock options".
Authorisations granted by the Annual General Meeting
The AGM authorised the Board of Directors to decide on repurchasing of own
shares with non-restricted equity. The shares may be repurchased in order to
develop the capital structure of the Company, to finance or carry out possible
acquisitions, to implement the Company's share-based incentive plans, to be
transferred for other purposes or to be cancelled. Altogether no more than
6,400,000 own shares may be purchased, of which no more than 952,000 are class A
shares and 5,448,000 are class B class. The above mentioned amounts include the
2,959,487 class B shares repurchased during 2005-2008 in Company's possession on
the AGM date.
In addition, the AGM authorised the Board to decide on issuance of a maximum of
6,400,000 treasury shares, of which no more than 952,000 are class A shares and
5,448,000 are class B shares, in one or more lots. The share issue can be
directed and it is to be used to as compensation in acquisitions and in other
arrangements, to finance acquisitions or for personnel incentive purposes. The
Board of Directors has also the right to decide on the transfer of the shares in
public trading in the NASDAQ OMX Helsinki Ltd. according to its rules and
regulations. The Board of Directors was also authorised to decide on other
conditions of the share issue.
Both authorisations shall remain in effect for a period of 18 months from date
of decision of the AGM.
Organisation of the Board of Directors
The Board of Directors elected Ilkka Herlin to continue as Chairman of the Board
and Tapio Hakakari as Deputy Chairman. Outi Aaltonen, Senior Vice President,
Cargotec's General Counsel, was elected as Secretary to the Board of Directors.
The Board of Directors elected among its members Ilkka Herlin, Karri Kaitue,
Anja Silvennoinen and Teuvo Salminen (chairman) as members of the Audit
Committee. Board members Tapio Hakakari, Ilkka Herlin (chairman), Peter Immonen
and Antti Lagerroos were elected to the Nomination and Compensation Committee.
Shares and trading
Share capital
Cargotec's share capital on 31 March 2010 totalled EUR 64,304,880. There were no
changes in the share capital during the first quarter. On 31 March 2020, the
number of class B shares listed on the NASDAQ OMX Helsinki Ltd. was 54,778,791
while that of unlisted class A shares totalled 9,526,089.
Own shares
At the end of the reporting period, Cargotec held a total of 2,959,487 own class
B shares. The shares were repurchased in 2005-2008.
The Board of Directors decided to exercise the authorisation conferred by the
AGM held on 5 March 2010, to acquire own shares. No own shares were repurchased
during the first quarter.
Share-based incentive programme
On 5 March 2010, the Board of Directors decided to establish a new share-based
incentive programme for Cargotec Executives. The programme includes three
earnings periods, each of them lasting for three calendar years, and they
commence on 2010, 2011 and 2012. The Board of Directors will decide on the
earnings criteria and on targets to be established for them, as well as the
maximum amount of the payable reward for each earning period. The earnings
criteria for the earning period 2010-2012 are Cargotec's operating profit margin
and sales of the fiscal year 2012.
The potential reward will be paid partly as Cargotec's class B shares and partly
in cash in 2013, 2014 and 2015. The proportion to be paid in cash is intended to
cover taxes and tax-related costs arising from the reward. The rewards to be
paid on the basis of the earning period 2010-2012 will correspond to the
approximate value of a maximum total of 100,000 Cargotec class B shares
(including also the proportion to be paid in cash).
The remaining earning periods 2010 and 2011 of the former share-based incentive
programme 2007-2011 will not be commenced as the new programme replacing the
current programme will be implemented as from the beginning of 2010. On the
basis of the former programme, a total of 31,356 class B shares were paid as
reward to key personnel for the first earning period 2007-2008. No rewards were
paid for the second earning period 2009 as the targets established for the
earnings criteria were not attained. A total of 387,500 series B shares were
initially reserved for the programme.
Stock options
The AGM confirmed that stock options will be issues to the key personnel of
Cargotec and its subsidiaries. The target group of the programme is
approximately 60 persons including the members of Cargotec Executive Board. The
share subscription period for stock options 2010A, will be 1 April 2013-30 April
2015, for stock options 2010B, 1 April 2014-30 April 2016 and for stock options
2010C, 1 April 2015-30 April 2017.
The beginning of the share subscription period requires attainment of targets
established for a performance criterion determined by the Board of Directors
annually. Those stock options, for which the targets have not been attained,
will expire. The Board of Directors has decided that if the operating profit of
the financial year 2010 is below EUR 100 million, the share subscription period
with stock options 2010A will not commence; if the operating profit of the
financial year 2010 is at least EUR 100 million but below EUR 120 million, the
share subscription period will commence with half of the stock options 2010A; if
the operating profit of the financial year 2010 is EUR 120 million or above, the
share subscription period will commence with all of the stock options 2010A. The
share subscription price for stock option 2010A is EUR 21.35/share.
Market capitalisation and trading
At the end of the first quarter, the total market value of class B shares was
EUR 1,110 million, excluding treasury shares held by the Company. The period-end
market capitalisation, in which unlisted class A shares are valued at the
average price of class B shares on the last trading day of the reporting period,
was EUR 1,314 million, excluding treasury shares held by the Company.
The class B share closed at EUR 21.42 on 31 March 2010. The average share price
for the quarter was EUR 21.14, the highest quotation being EUR 23.46 and the
lowest EUR 19.16. In January-March, approximately 14 million class B shares were
traded on the NASDAQ OMX Helsinki Ltd., corresponding to a turnover of
approximately EUR 297 million.
Short-term risks and uncertainties
Despite signs of recovery in the world economy, its development is still
characterised by uncertainty. In particular, this uncertainty surrounds the
timing of the recovery in investments in port container handling equipment.
Improvements in the sales and profit of Terminal business may be retarded by
possible postponements of investments. During the year underway, developments in
customers' capacity utilisation rates will have an effect on demand and
development of services.
In view of the prevailing uncertainty, Cargotec monitors, and continues seeking
to proactively manage, both customer and supplier risks, which may have a
detrimental effect through credit losses or delivery chain problems.
Cargotec still estimates that approximately EUR 300 million of Marine's order
book involves a risk of cancellation. A continuation in shipping overcapacity
may lead to a reappraisal by shipowners of the need to cancel ordered vessels or
postpone deliveries.
Outlook
There are tentative positive signs visible in the order intake for the
Industrial business whereas uncertainty continues in the Terminal business.
Based on the strong order book, sales in the Marine business are expected to
remain on a healthy level in 2010. Cargotec's 2010 sales are estimated to be on
2009 level and operating profit to exceed EUR 100 million.
Financial calendar 2010
Interim Report January-June 2010, on Wednesday, 21 July 2010
Interim Report January-September 2010, on Wednesday, 27 October 2010
Helsinki, 28 April 2010
Cargotec Corporation
Board of Directors
This interim report is unaudited.
Condensed consolidated statement of income
MEUR 1-3/2010 1-3/2009 1-12/2009
--------------------------------------------------------------------------------
Sales 555.1 674.9 2,580.9
Cost of goods sold -448.4 -565.6 -2,158.7
--------------------------------------------------------------------------------
Gross profit 106.7 109.3 422.2
Gross profit, % 19.2 16.2 16.4
Costs and expenses -90.9 -94.4 -361.6
Restructuring costs -2.3 -8.8 -61.1
Share of associated companies' and joint
ventures' net income 0.1 0.1 0.8
--------------------------------------------------------------------------------
Operating profit 13.5 6.2 0.3
Operating profit, % 2.4 0.9 0.0
Financing income and expenses -6.7 -5.3 -27.0
--------------------------------------------------------------------------------
Income before taxes 6.8 0.9 -26.7
Income before taxes, % 1.2 0.1 -1.0
Taxes 3.0 0.6 33.9
--------------------------------------------------------------------------------
Net income for the period 9.8 1.5 7.1
Net income for the period, % 1.8 0.2 0.3
Net income for the period attributable to:
Equity holders of the Company 7.8 0.7 3.1
Non-controlling interest 2.1 0.8 4.0
--------------------------------------------------------------------------------
Total 9.8 1.5 7.1
Earnings per share for profit attributable to the equity holders of the
Company:
Basic earnings per share, EUR 0.13 0.01 0.05
Diluted earnings per share, EUR 0.13 0.01 0.05
Consolidated statement of comprehensive income
MEUR 1-3/2010 1-3/2009 1-12/2009
--------------------------------------------------------------------------------
Net income for the period 9.8 1.5 7.1
Gain/loss on cash flow hedges 7.7 -55.5 6.9
Gain/loss on cash flow hedges transferred to
Statement of Income 1.2 22.6 36.2
Translation differences 48.5 6.6 20.5
Taxes relating to components of other
comprehensive income -16.6 4.9 -14.6
--------------------------------------------------------------------------------
Comprehensive income for the period 50.6 -19.9 56.1
Comprehensive income for the period
attributable to:
Equity holders of the Company 48.2 -19.9 52.1
Non-controlling interest 2.4 0.0 4.0
--------------------------------------------------------------------------------
Total 50.6 -19.9 56.1
Condensed consolidated statement of financial
position
ASSETS
MEUR 31 Mar 2010 31 Mar 2009 31 Dec 2009
--------------------------------------------------------------------------------
Non-current assets
Intangible assets 813.6 764.0 784.3
Tangible assets 308.8 295.0 301.2
Loans receivable and other
interest-bearing assets 1) 7.5 7.6 7.4
Investments 12.0 9.0 9.0
Non-interest-bearing assets 130.3 146.0 131.0
--------------------------------------------------------------------------------
Total non-current assets 1,272.1 1,221.5 1,233.0
Current assets
Inventories 617.6 858.3 609.3
Loans receivable and other
interest-bearing assets 1) 3.2 0.2 2.9
Accounts receivable and other
non-interest-bearing assets 563.1 719.9 575.6
Cash and cash equivalents 1) 265.2 95.7 266.6
--------------------------------------------------------------------------------
Total current assets 1,449.1 1,674.2 1,454.5
--------------------------------------------------------------------------------
Total assets 2,721.1 2,895.6 2,687.4
EQUITY AND LIABILITIES
MEUR 31 Mar 2010 31 Mar 2009 31 Dec 2009
--------------------------------------------------------------------------------
Equity
Shareholders' equity 894.6 798.8 870.8
Non-controlling interest 11.0 8.6 10.6
--------------------------------------------------------------------------------
Total equity 905.6 807.4 881.5
Non-current liabilities
Loans 1) 524.9 499.8 511.2
Deferred tax liabilities 26.5 38.6 29.7
Provisions 28.4 25.5 19.0
Pension obligations and other
non-interest-bearing
liabilities 81.6 142.6 94.7
--------------------------------------------------------------------------------
Total non-current liabilities 661.4 706.5 654.7
Current liabilities
Loans 1) 83.9 113.8 83.0
Provisions 48.8 72.7 66.2
Advances received 363.4 433.6 339.0
Accounts payable and other
non-interest-bearing
liabilities 658.1 761.7 663.0
--------------------------------------------------------------------------------
Total current liabilities 1,154.1 1,381.8 1,151.3
--------------------------------------------------------------------------------
Total equity and liabilities 2,721.1 2,895.6 2,687.4
1) Included in interest-bearing net debt. In addition, the calculation of the
interest-bearing net debt includes the hedging of cross-currency risk relating
to the USD 300 million Private Placement bond, totalling on 31 March 2010, EUR
3.2 (31 March 2009: 0.3 and 31 December 2009: 17.5) million.
Consolidated statement of changes in
equity
Attributable to the equity holders of the Company
| |
Trans | Non|
Share lation Fair | control|
Share premium differ- value Retained | ling| Total
MEUR capital account ences reserves earnings Total|interest|equity
----------------------------------------------------------------+--------+------
Equity on 1 Jan | |
2009 64.3 98.0 -20.4 -54.6 768.0 855.3| 9.1| 864.4
| |
Comprehensive | |
income for | |
the period* 6.7 -27.3 0.7 -19.9| 0.0| -19.9
| |
Dividends | |
paid -36.7 -36.7| | -36.7
| |
Share-based | |
incentives, | |
value of | |
received | |
services * 0.0 0.0| | 0.0
| |
Other changes | -0.5| -0.5
----------------------------------------------------------------+--------+------
Equity on | |
31 Mar 2009 64.3 98.0 -13.7 -81.9 732.1 798.8| 8,6| 807.4
| |
| |
----------------------------------------------------------------+--------+------
Equity on | |
1 Jan 2010 64.3 98.0 -1.1 -24.9 734.6 870.9| 10.6| 881.5
| |
Comprehensive | |
income | |
for the period* 34.6 5.9 7.8 48.2| 2.4| 50.6
| |
Dividends paid -24.4 -24.4| -1.8| -26.3
| |
Share-based | |
incentives, | |
value of | |
received | |
services * 0.0 0.0| | 0.0
| |
Other changes | -0.3| -0.3
----------------------------------------------------------------+--------+------
Equity on 31 Mar | |
2010 64.3 98.0 33.5 -19.1 717.9 894.6| 11.0| 905.6
| |
* Net of tax
Key figures
1-3/2010 1-3/2009 1-12/2009
---------------------------------------------------------------
Equity/share EUR 14.58 13.02 14.20
Interest-bearing net debt MEUR 336.1 510.3 334.8
Total equity/total assets % 38.4 32.8 37.5
Gearing % 37.1 63.2 38.0
Return on equity % 4.4 0.7 0.8
Return on capital employed % 3.8 1.9 0.2
Condensed consolidated statement of cash flows
MEUR 1-3/2010 1-3/2009 1-12/2009
--------------------------------------------------------------------------------
Net income for the period 9.8 1.5 7.1
Depreciation and impairments 12.8 14.6 60.0
Other adjustments 3.7 4.6 -7.6
Change in working capital 20.2 38.9 230.2
--------------------------------------------------------------------------------
Cash flow from operations 46.5 59.6 289.7
Cash flow from financial items and taxes -8.7 -30.3 -25.5
--------------------------------------------------------------------------------
Cash flow from operating activities 37.8 29.4 264.2
Acquisitions -0.6 -2.8 -7.6
Cash flow from investing activities, other
items -13.6 -23.8 -79.6
--------------------------------------------------------------------------------
Cash flow from investing activities -14.2 -26.5 -87.2
Proceeds from share subscriptions - 0.0 0.0
Acquisition of treasury shares - - 0.0
Proceeds from long term borrowings 1.1 50.0 100.6
Repayments of long term borrowings -2.4 -2.0 -4.2
Proceeds from short term borrowings 0.5 8.5 16.5
Repayments of short term borrowings -4.9 -5.7 -46.9
Dividends paid -24.4 -34.4 -37.4
--------------------------------------------------------------------------------
Cash flow from financing activities -30.1 16.3 28.6
--------------------------------------------------------------------------------
Change in cash -6.5 19.1 205.6
Cash, cash equivalents and bank overdrafts at
the beginning of period 252.5 45.9 45.9
Effect of exchange rate changes 2.5 0.3 0.9
--------------------------------------------------------------------------------
Cash, cash equivalents and bank overdrafts at
the end of period 248.5 65.3 252.5
Bank overdrafts at the end of period 16.7 30.4 14.2
--------------------------------------------------------------------------------
Cash and cash equivalents at the end of period 265.2 95.7 266.6
Segment reporting
Sales, MEUR 1-3/2010 1-3/2009 1-12/2009
--------------------------------------------------------------------------------
Industrial & Terminal 314 457 1,573
Marine 241 218 1,009
Internal sales 0 0 -1
--------------------------------------------------------------------------------
Total 555 675 2,581
Operating profit, MEUR 1-3/2010 1-3/2009 1-12/2009
--------------------------------------------------------------------------------
Industrial & Terminal -7.3 5.6 -10.3
Marine 34.3 18.4 105.2
Corporate administration and support
functions -11.2 -9.0 -33.5
--------------------------------------------------------------------------------
Operating profit excluding restructuring
costs 15.8 15.0 61.3
Restructuring costs:
Industrial & Terminal 1.6 8.3 43.2
Marine 0.1 - 1.9
Corporate administration and support
functions 0.6 0.5 15.9
--------------------------------------------------------------------------------
Total restructuring costs 2.3 8.8 61.1
--------------------------------------------------------------------------------
Total 13.5 6.2 0.3
Operating profit, % 1-3/2010 1-3/2009 1-12/2009
--------------------------------------------------------------------------------
Industrial & Terminal -2.3 * 1.2 * -0.7 *
Marine 14.2 * 8.5 10.4 *
Cargotec, operating profit excluding
restructuring costs 2.8 * 2.2 * 2.4 *
Cargotec 2.4 0.9 0.0
* Excluding restructuring costs.
Sales by geographical area, MEUR 1-3/2010 1-3/2009 1-12/2009
--------------------------------------------------------------------------------
EMEA 234 366 1,193
Americas 97 113 457
Asia Pacific 224 196 931
--------------------------------------------------------------------------------
Total 555 675 2,581
Sales by geographical area, % 1-3/2010 1-3/2009 1-12/2009
--------------------------------------------------------------------------------
EMEA 42.1 54.2 46.2
Americas 17.5 16.8 17.7
Asia Pacific 40.3 29.0 36.1
--------------------------------------------------------------------------------
Total 100.0 100.0 100.0
Orders received, MEUR 1-3/2010 1-3/2009 1-12/2009
--------------------------------------------------------------------------------
Industrial & Terminal 415 361 1,260
Marine 183 96 569
Internal orders received 0 0 -1
--------------------------------------------------------------------------------
Total 598 456 1,828
Order book, MEUR 31 Mar 2010 31 Mar 2009 31 Dec 2009
--------------------------------------------------------------------------------
Industrial & Terminal 637 759 546
Marine 1,602 2,013 1,604
Internal order book 0 0 0
--------------------------------------------------------------------------------
Total 2,239 2,772 2,149
Capital expenditure, MEUR 1-3/2010 1-3/2009 1-12/2009
--------------------------------------------------------------------------------
In fixed assets (excluding
acquisitions) 17.2 17.7 86.9
In leasing agreements 0.1 0.0 0.9
In customer financing 2.3 10.0 19.0
--------------------------------------------------------------------------------
Total 19.5 27.7 106.8
Number of employees at the end of
period 31 Mar 2010 31 Mar 2009 31 Dec 2009
--------------------------------------------------------------------------------
Industrial & Terminal 6,960 8,694 6,989
Marine 2,197 2,495 2,286
Corporate administration and support
functions 352 278 331
--------------------------------------------------------------------------------
Total 9,509 11,467 9,606
Average number of employees 1-3/2010 1-3/2009 1-12/2009
--------------------------------------------------------------------------------
Industrial & Terminal 6,874 8,860 8,023
Marine 2,227 2,531 2,476
Corporate administration and support
functions 347 258 285
--------------------------------------------------------------------------------
Total 9,447 11,649 10,785
Notes
Taxes in income statement
MEUR 1-3/2010 1-3/2009 1-12/2009
--------------------------------------------------------------------------------
Current year tax expense 10.0 3.5 20.9
Change in deferred tax
assets and liabilities -13.0 0.9 -44.5
Tax expense for previous
years -0.1 -5.0 -10.3
--------------------------------------------------------------------------------
Total -3.0 -0.6 -33.9
Commitments
MEUR 31 Mar 2010 31 Mar 2009 31 Dec 2009
--------------------------------------------------------------------------------
Guarantees 0.5 0.2 0.5
Dealer financing 0.0 0.2 0.1
End customer financing 9.9 11.2 10.3
Operating leases 48.5 48.5 49.1
Other contingent liabilities 3.6 3.9 3.7
--------------------------------------------------------------------------------
Total 62.6 63.9 63.7
Cargotec Corporation has guaranteed obligations of Cargotec companies, arising
from ordinary course of business, up to a maximum of EUR 554.7 (31 Dec
2009: 554.7) million.
Cargotec leases property, plant and equipment under non-cancellable operating
leases. The leases have varying terms and renewal rights. It is not anticipated
that any material liabilities will arise from trade finance commitments.
Fair values of derivative financial instruments
Positive Negative Net fair Net fair Net fair
fair value fair value value value value
31 Mar
MEUR 31 Mar 2010 31 Mar 2010 2010 31 Mar 2009 31 Dec 2009
--------------------------------------------------------------------------------
FX forward
contracts, cash
flow hedges 39.9 68.1 -28.2 -127.8 -30.1
FX forward
contracts,
non-hedge accounted 2.0 8.4 -6.4 32.8 1.6
Cross-currency and
interest rate
swaps, cash flow
hedges 4.9 - 4.9 20.6 -9.9
--------------------------------------------------------------------------------
Total 46.8 76.5 -29.7 -74.4 -38.5
Non-current
portion:
FX forward
contracts, cash
flow hedges 8.4 13.1 -4.7 -56.7 -9.4
Cross-currency and
interest rate
swaps, cash flow
hedges 4.9 - 4.9 20.6 -9.9
--------------------------------------------------------------------------------
Non-current portion 13.3 13.1 0.1 -36.1 -19.3
--------------------------------------------------------------------------------
Current portion 33.5 63.3 -29.8 -38.4 -19.2
Cross currency and interest rate swaps hedge the US Private Placement corporate
bond funded in February 2007.
Nominal values of derivative financial instruments
MEUR 31 Mar 2010 31 Mar 2009 31 Dec 2009
----------------------------------------------------------------------------
FX forward contracts 2,381.5 3,312.3 2,386.5
Cross-currency and interest rate swaps 225.7 225.7 225.7
----------------------------------------------------------------------------
Total 2,607.2 3,538.0 2,612.3
Disposals
In January, Cargotec sold its US-based hydraulic cylinders manufacturing
business Waltco Hydraulics to Ligon Industries, LLC. This transaction had no
material impact on Cargotec's result or cash flow.
Accounting principles
The interim report has been prepared according to the International Accounting
Standard 34: Interim Financial Reporting. The accounting policies adopted are
consistent with those of the annual financial statements for 2009. All figures
presented have been rounded and consequently the sum of individual figures may
deviate from the presented sum figure.
Adoption of the new and revised IFRS standards as of January 1, 2010
Starting from January 1, 2010 Cargotec has adopted the following revised
standards published in 2008 and 2009 by the IASB:
- IFRS 3R, Business Combinations (revised). The adoption of the revised standard
has an impact on the accounting of business combinations.
- Amendment to IAS 27 Consolidated and Separate Financial Statements. The
amendment has an impact on accounting of the changes in ownership in
subsidiaries.
- Amendment to IAS 39, Financial Instruments: Recognition and Measurement:
Eligible Hedged Items. The amendment clarifies the guidance of the hedge
accounting.
Additionally, Cargotec has adopted the amendments related to the IFRS 2008 and
2009 Annual Improvements, which have been endorsed by EU. Aforementioned changes
have no material impact on the interim report.
Restatement of reporting segments' comparable figures
As of January 1, 2010 Cargotec has two reporting segments, Industrial & Terminal
and Marine. At the same time the definition of Services business was clarified.
Reporting segments' financial information for comparable periods has been
restated accordingly.
Calculation of key figures
Total equity attributable to the equity holders
of the Company
Equity / share = ______________________________________
Share issue-adjusted number of shares
at the end of period (excluding treasury shares)
Interest-bearing net
debt = Interest-bearing debt* - interest-bearing assets
Total equity
Total equity / total
assets (%) = 100 x ______________________________________
Total assets - advances received
Interest-bearing debt* - interest-bearing assets
Gearing (%) = 100 x ______________________________________
Total equity
Net income for period
Return on equity (%) = 100 x ______________________________________
Total equity (average for period)
Income before taxes + interest and other
financing expenses
Return on capital
employed (%) = 100 x _______________________________________________
Total assets - non-interest-bearing debt (average
for period)
Net income for the period attributable to the
equity holders of the Company
Basic earnings /
share = ___________________________________
Share issue-adjusted weighted average
number of shares during the
period (excluding treasury shares)
* Including cross currency hedging of the USD 300 million Private Placement
corporate bonds.
Quarterly figures
Cargotec Q1/2010 Q4/2009 Q3/2009 Q2/2009 Q1/2009
----------------------------------------------------------------------------
Orders received MEUR 598 464 437 471 456
Order book MEUR 2,239 2,149 2,371 2,555 2,772
Sales MEUR 555 669 559 678 675
Operating profit MEUR 15.8 * 31.7 * 11.6 * 3.0 * 15.0 *
Operating profit % 2.8 * 4.7 * 2.1 * 0.4 * 2.2 *
Basic earnings/share EUR 0.13 0.18 -0.02 -0.12 0.01
Industrial & Terminal Q1/2010 Q4/2009 Q3/2009 Q2/2009 Q1/2009
----------------------------------------------------------------------------
Orders received MEUR 415 304 278 317 361
Order book MEUR 637 546 586 652 759
Sales MEUR 314 364 331 421 457
Operating profit MEUR -7.3 * -2.3 * -7.3 * -6.3 * 5.6 *
Operating profit % -2.3 * -0.6 * -2.2 * -1.5 * 1.2 *
Marine Q1/2010 Q4/2009 Q3/2009 Q2/2009 Q1/2009
----------------------------------------------------------------------------
Orders received MEUR 183 160 158 155 96
Order book MEUR 1,602 1,604 1,785 1,903 2,013
Sales MEUR 241 305 229 257 218
Operating profit MEUR 34.3 * 40.5 * 22.9 23.3 18.4
Operating profit % 14.2 * 13.3 * 10.0 9.1 8.5
* Excluding restructuring costs
[HUG#1409746]
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