Mika Vehviläinen is optimistic
Cargotec CEO Mika Vehviläinen tells shareholders that orders have risen sharply as part of the gradual market recovery from the difficult pandemic situation.
"Our orders received increased by 43% compared to (Q1 2020) as all business areas increased their orders. Strong demand continued in Kalmar mobile equipment and Hiab solutions, and Hiab's orders received were once again its best ever," he says.
Interest in Kalmar's automation solutions also increased.
"MacGregor's orders received increased by 7%, driven by a pick-up merchant ship market."
Vehviläinen notes that the overall order book increased by 22% compared to the end of 2020, which positions the group well for 2021 onwards.
He does, however, note a 15% drop in sales over the quarter, "reflecting the expected low order intake during last year's second quarter and the beginning of the third quarter".
"The availability of product components did not have a material impact on our operations but, if prolonged, the global shortage of components could pose challenges," he warns. "We monitor closely our supply chain performance and are actively cooperating with our suppliers."
The CEO also points out that in March, Cargotec announced the agreement to sell Navis software business to the US investment firm Accel-KKR for an enterprise value of EUR380 million (USD457 million). "The final purchase price will be determined at closing. The agreement delivers a great home for Navis and secures the best possible growth and value creation for its next development phase," he adds.
Another significant corporate development is the plan to combine Cargotec and Konecranes through a merger. The implementation of the merger is subject to obtaining the necessary approvals from the competition authorities.
Meanwhile, the Cargotec board has confirmed the company's refined strategy and vision, focused on sustainability and profitable growth.
For Kalmar, MacGregor and Hiab, Cargotec's vision is to become the global leader in sustainable cargo flow.
"Our previous vision - becoming the global leader in intelligent cargo handling - highlighted the importance of digitalisation. With our present operating model, digitalisation already constitutes an integrated part of our processes, solutions and offering. Intelligent solutions enable sustainable and profitable growth. The importance of sustainability has significantly increased in our customers' operations and we lift it into our vision," Vehviläinen explains.
In concrete terms, Cargotec aims to reduce the CO2 emissions of its value chain by 1 million tons by 2024.
Looking ahead, Cargotec reiterates its outlook published on 4 February 2021 and continues to predict an improvement in operating profit.