 Kalmar and Hiab achieved record high operating profits |
Cargotec ended 2019 with mixed fortunes: Kalmar and Hiab achieved record high operating profits while MacGregor made a loss, according to the company's latest financial report. "Our comparable operating profit increased by 9%, but mainly due to restructuring costs in MacGregor; the group's operating profit decreased by 5%," says CEO Mika Vehviläinen.
Vehviläinen says the value of the group's order book at the end of 2019 was higher than in the previous year. Kalmar's order book was positively affected by increased demand for port automation solutions. "Customers are now taking concrete steps towards automation investments and consider how and when they could automate their sites," he explains.
"Demand of mobile equipment trended downwards at the end of the year. Nevertheless, Kalmar managed to improve its comparable operating profit by 13%."
Cargotec was particularly pleased with Hiab's results. The business area's order intake increased by 4% and comparable operating profit by 27% compared to the previous year. The result improved due to higher sales. "We managed to solve the supply chain-related challenges that started in 2018. This was also visible in Hiab's order backlog that returned to a normalised level."
MacGregor's situation remained challenging, he says. Order intake - excluding the TTS acquisition - remained at the previous year's level. The business area's sales and comparable operating profit decreased further in the subdued market environment. "During the year, we conducted significant restructuring actions in MacGregor and we expect the results to be visible in our result this year.
"In 2019, we also completed the acquisition of the marine and offshore businesses of TTS Group ASA. The integration has started well and the scale benefits of the acquisition and synergies thereof create an opportunity to further improve MacGregor's productivity and global presence.
"I am pleased with the continued positive development in our service and software business. Service sales increased by 8% and software sales by 15% year-on-year. We are well on track towards reaching our targets."
Looking ahead, Vehviläinen explains that due to market uncertainties, "our visibility to 2020 is limited, but I think that we have a solid foundation.
"Our order book is strong and, thanks to TTS integration and other ongoing restructuring actions, MacGregor's result is expected to improve. We expect the service business's growth and the group-wide savings and efficiency programs to support our result development. We will continue our efforts to develop our corporate structure and improve our cost efficiency that may result in restructurings in 2020."