Cargotec Corporation’s Financial Statements Review Q4 · 2 Cargotec Corporation’s Financial...
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Cargotec Corporation’s Financial Statements Review
January–December 2008
Q4
2 Cargotec Corporation’s Financial Statements Review 2008
Cargotec Corporation’s Financial Statements Review 2008
• OrdersreceivedtotalledEUR3,769(4,106)million.Duringthefourthquarter,ordersreceivedwereEUR633(1,214)million.
• TheorderbookwasEUR3,054(2,865)million.
• Salesgrewby13percent,amountingtoEUR3,399(3,018)million.SalesforthefourthquarterwereEUR924(868)million.
• SalesforservicesgrewtoEUR871(757)million,representing26(25)percentoftotalsales.
• OperatingprofitexcludingrestructuringcostswasEUR192.8(203.1)millionwithEUR35.9(46.3)attributabletothefourthquarter.Operating
marginexcludingrestructuringcostswas5.7(6.7)percentand3.9(5.3)forthefourthquarter.
• OperatingprofitwasEUR173.7(203.1)millionwithEUR16.8(46.3)millionattributabletothefourthquarter.Operatingprofitincludes
EUR19millionofcostsfromtherestructuringprogramannouncedinSeptember.
• CashflowfromoperatingactivitiesbeforefinancialitemsandtaxestotalledEUR133.8(235.1)million.
• NetincomefortheperiodamountedtoEUR120.8(138.4)million.
• EarningspersharewereEUR1.91(2.17)withEUR0.14(0.45)attributabletothefourthquarter.
• Thenumberofpersonneltotalled11,826(11,187)attheendoftheperiod.
• TheBoardofDirectorswillproposetotheAnnualGeneralMeeting,thatofthedistributableprofit,adividendofEUR0.59pereachclass
AshareandEUR0.60pereachclassBshareoutstandingbepaid.
• InthecurrentuncertaineconomicsituationitisdifficulttoestimatethedemandforCargotec’sproducts.Thisisfurthercomplicatedby
possibleordercancellationsanddelays.ThepreconditionsforsalesgrowthexistinservicesandMacGREGOR.SalesofHiabandKalmarare
expectedtodeclinefrom2008.SignificantrestructuringmeasurescostingEUR35millionweredecidedonduring2008tocreateanew
supplyplatformandimproveprofitabilityinCargotec.Focusisontherapidimplementationofthesemeasures.ApproximatelyEUR16million
ofthesecostsremainfor2009.
Thefiguresinthisfinancialstatementsreviewareaudited.
Operating Environment
ThemarketsforloadhandlingequipmentwerestronginEurope
forthefirstpartoftheyearbutweakenedsignificantlyduringthe
secondhalfasaresultofageneralslowdowninconstruction-
relatedcustomersegments.IntheUnitedStates,demandforload
handlingequipmentwasslackthroughouttheyear.However,
thereareopportunitiesingovernmentbusinessasvarious
countriesarelookingforwaystoboosteconomicgrowth.InAsia
Pacific,growthremainedhealthy,withtheexceptionofJapan.
Themarketsforcontainerhandlingequipmentremainedhealthy
untilthelastquarter,duringwhichtheeconomicuncertainty
begantobereflectedincustomers’investmentdecisions.The
marketsforreachstackers,straddlecarriersandrubber-tyred
gantry(RTG)craneswereactive.Demandformediumandlight
forklifttrucksaswellasterminaltractorsinmaturemarkets
slackenedtowardstheendoftheyear.Portoperators’interestin
automationcontinuedwithseveralautomationprojectsin
simulationandplanningphase.
Themarketsformarinecargoflowsystemsandoffshoresolu-
tionswerestrongthroughouttheyear,whichcanbeseeninthe
highnumberofordersreceived.However,theturbulenceinthe
financialmarketsandlowershipcapacityutilisationsloweddown
newshiporderstowardstheendoftheyear.Marketuncertainty
wasincreasedbyspeculationrelatingtocancellationsofalready
placedshiporders.
Demandforservicesremainedfavourable,theeconomic
downturnhavingnosignificanteffectonactivity.Customersare
increasinglyinterestedinimprovingtheiroperationalflexibility.In
emergingmarkets,highusageratesofequipmentsupported
demandforservices.ServicedemandinEuropewashealthy.
IntheUS,weakeconomicenvironmentaffecteddemandfor
services.
Orders Received
Ordersreceivedin2008totalledEUR3,769(4,106)million.
Especially,theboominshipbuildingboostedtheordersreceived
byMacGREGORduringJanuary-September.Thevalueoforders
securedbyCargotecduringthefourthquarterwasdowntoEUR
633(1,214)millionreflectingthesharplyincreasedeconomic
uncertainty.
3Cargotec Corporation’s Financial Statements Review 2008
Hiab
Oftotalordersreceived,HiabaccountedforEUR818(985)million
whileitsshareofordersreceivedinOctober–Decemberwas
EUR157(254)million.MajorpartoftheordersHiabsecured
weresmallindividualorders,whichistypicalofitsoperations.
Ordersreceivedhavedeclinedasaresultofadropindemand
inconstruction-relatedcustomersegmentsintheUSandalsoin
Europeduringthesecondhalfoftheyear.
Duringthefourthquarter,HiabreceivedanorderforoverEUR16
millionfromtheIraqiMinistryofElectricity.Thisorderincludes95
loadercranesandcargobodiesassembledontrucks.Mostofthe
deliverieswilltakeplaceduring2009.Inaddition,Hiabreceived
anorderfor21hookliftsand9loadercranesfromtheFinnish
Armyandanorderfor100demountablesand20loadercranes
tobeinstalledbyHiabfromtheDutchFireBrigadeandHighway
Police.
InSeptember,HiabreceivedasignificantorderfromBAESystems
Inc.intheUSfor428loadercranesand32hooklifts.Deliveryof
theequipmentstartedduringthefourthquarterof2008,with
mostofthedeliveriestakingplaceduring2009.
Duringthesecondquarter,Hiabbookedanorderfor90
demountablestobedeliveredtotheUnitedKingdom’sMinistry
ofDefence.Furthermore,Hiabdelivereddemountablesanddeep
wastecollectionunitstotheOlympicVillageinBeijing,China.
Kalmar
Oftotalordersreceived,KalmaraccountedforEUR1,566(1,429)
millionwhileitsshareofordersreceivedinOctober–December
wasEUR348(346)million.Severalordersincludenavigation,
containerpositionverificationandremotemonitoringsystems
developedbyKalmar.Orderintakeforreachstackerswasona
recordhighlevelduring2008.
Duringthefourthquarter,Kalmarwasawardedanewfive-year
contracttosupplyRoughTerrainContainerHandlers(RTCH)to
theUSDepartmentofDefence.Thisnewcontractwasawarded
bytheTank-AutomotiveArmamentCommand(TACOM)and
isstructuredtohavemultipledeliveryorderreleasesoverthe
termofthecontract.Thevalueoftheinitialdeliveryorderswill
bearoundEUR100millionandtheequipmentwillbedelivered
during2009–2010.Thetotalvalueofthefive-yearcontractis
estimatedtobeoverEUR300million.
Duringthesecondhalf,Kalmaradditionallyreceivedseveral
ordersforE-One+rubber-tyredgantrycranes(RTG),straddle
carriersandterminaltractors.Duringthefirsthalfof2009,four
E-One+rubber-tyredgantrycranes(RTG)willbedeliveredtothe
EvyapPortinTurkeyandduringthethirdquarter,twoE-One+
rubber-tyredgantrycranes(RTG)tothePortofKoper’scontainer
terminalinSlovenia,eighttothePortofKumportinTurkeyand
fourtothePortofLivorno,Italy.
OrdersforstraddlecarrieswerereceivedfromtheUnited
Kingdom,GreeceandAustralia.Twoofthe15straddlecarries
beingdeliveredtoDPWorldSouthamptonandoneofthesix
beingdeliveredtoTilburyContainerServicesduringthefirsthalf
of2009willbefittedwithKalmar’snewhybridtechnology,while
theremainderarecapableofbeingupgradedtohybridsinthe
future.Duringthefirsthalfof2009,anadditional10straddle
carrierswillbedeliveredtothePiraeusPortAuthorityinGreece.
Fournewautomaticstraddlecarrierswillbebroughtintoservice
attheFishermanIslandscontainerterminalinBrisbane,Australia
bySeptember2009.Some42terminaltractorsweredeliveredto
thePortofSalalahinOmanbytheendof2008.
Duringthethirdquarter,Kalmarbookedasignificantorderfor
E-One+rubber-tyredgantrycranes(RTG)fromSouthAfrica.
Atotalof32RTGswillbedeliveredtoTransnetPortTerminalsin
CapeTown,SouthAfricastartinginthesummerof2009withthe
lastunitsarrivinginautumn2010.
Duringthefinancialperiod,Kalmaralsoreceivedanorderof
sevenE-One+rubber-tyredgantrycranes(RTG)and10reach-
stackersfromIndianArshiyaInternational.Thedeliveryofthis
equipmentstartedattheendof2008.
InJune,Kalmarreceivedanorderfor30terminaltractors,
sevenE-One+rubber-tyredgantrycranes(RTG)andfivereach-
stackersfromSociedadPortuariaRegionaldeCartagena(SPRC)
ofColombia.ThisequipmentwilloperateatSPRC’snewContecar
terminalinCartagena.Thesmallerequipmenthasbeendelivered
andtheRTGswillbeoperationalbyMay2009.
InMay,Kalmarreceivedanorderfor30straddlecarriersfrom
TransnetPortTerminals(TPT)ofSouthAfrica.Thedeliveriesto
TPT’scontainerterminalinthePortofDurbanbeganinthe
summer,withthefinalunitsarrivinginJanuary2009.
Orders received, MEUR 1-12/2008
Share,% 1-12/2007
Share,%
Change,%
Hiab 818 22 985 24 -17
Kalmar 1,566 41 1,429 35 +10
MacGREGOR 1,393 37 1696 41 -18
Internalordersreceived -9 -4
Total 3,769 100 4,106 100 -8
4 Cargotec Corporation’s Financial Statements Review 2008
InMarch,Kalmarreceivedanorderfor48EDRIVE®straddle
carriersforEurogate’soperationsinGermany.Atotalof22units
havebeenorderedforEurogate’sCTBBremerhavencontai-
nerterminal,and13unitswillgotoEurogate’sCTHHamburg.
Another13unitswillbedeployedattheMSCGateBremerhaven
terminal,ajointventurebetweenEurogateandMediterranean
ShippingCompany.Equipmentdeliveriesbeganintheautumn
withthelastunitsarrivingatthebeginningof2009.Inaddition,
KalmarprovidedStevecoOywithtenKalmarEDRIVE®straddle
carriersfortheMussalocontainerterminalinKotka,Finland.
Duringthefirstquarter,KalmarreceivedE-One+rubber-tyred
gantrycrane(RTG)ordersfrom,forexample,Vietnam,Thailand,
India,BrazilandMorocco.Kalmarwilldeliver17ofthesecranes
toVietnamInternationalContainerTerminals’HoChiMinhCityfa-
cilitybetween2008and2010.LCMTCompanyLtd.fromThailand
orderedsixRTGsforitsterminalatthePortofLaemChabang.
ThecranesareduetofordeliverybyMarch2009.Kalmarwill
alsodeliver11RTGstoGatewayTerminalsIndiaatNhavaSheva
inJanuary2009.SouthAmerica’slargestcontainerterminal
operator,SantosBrasilS/A,ordered12RTGsfordeliverybyMarch
2009.Furthermore,SomaportoperatingintheportofCasablanca,
Morocco,orderedtenRTGstobedeliveredinearly2009.
InFebruary,Kalmarreceivedanorderfor22E-One+rubber-tyred
gantrycranes(RTGs)fromSouthAfricanTransnetLimited.This
equipmentwillbedeliveredin2008–2009forthenewPortof
Ngqura.InFebruary,KalmaralsosecuredanorderfromthePort
ofTacomaontheUSWestCoastforthesupplyofsevenstraddle
carriers.Thesewillbeusedincontainerhandlinginon-dockrail
facilitiesandwillbeequippedwithKalmar’smonitoringsystem,
speedinguptheiroperation.Themachinesweredeliveredduring
thesecondhalfof2008.
MacGREGOR
Oftotalordersreceived,MacGREGORaccountedforEUR1,393
(1,696)millionwhileitsshareofordersreceivedinOctober–
DecemberwasEUR129(616)million.Thedropinordersreceived
duringthefourthquarterreflectedtheexceptionalshipbuilding
boomofthepastcoupleofyearsclearlyslowingdown.Also
theglobaleconomicslowdownattheendoftheyearcreateda
situationofovercapacityinmanyshiptypes,whichhasleadship
ownerstoreconsidertheirinvestmentplans.
Duringthefourthquarter,MacGREGORreceivedordersworth
nearlyEUR30millionfromChinafortenshipsetsofcranes,
hatchcoversandfixedcontainerfittings.Thisequipmentwillbe
deliveredin2010–2011.
Duringthethirdquarter,MacGREGORreceivedsignificanthatch
cover,shipcraneandRoRoequipmentordersfromKorea,
Singapore,ChinaandJapan.Hatchcoverswillbe
deliveredfor39containerships.Anorderofnewshipcranesand
hatchcoversforfourheavy-liftvesselswasreceivedfrom
Singapore.RoRoequipmentandhoistablecardeckswillbe
deliveredfor16purecar/truckcarriersin2009–2011.
InAugust,theOffshoredivisionreceivedamajororderfortwoac-
tiveheavecompensatedoffshorecranesfromFinnishFinstaship.
Thecraneswilldeliveredduringthesecondhalfof2010.
Duringthesecondquarter,MacGREGORobtainedextensivehatch
coverandRoRoequipmentorders,mainlyfromKoreaandJapan.
Thehatchcoverordersareforalargenumberofcontainerand
bulkvesselstobedeliveredin2009–2012.TheRoRoequipment
ordersincludethedesignandmanufactureofRoRoequipment
aswellashoistablecardecksforfourdeep-seaConRos(vessels
carryingbothcontainerandRoRocargo).Theequipmentwillbe
deliveredin2010–2011.
InJune,MacGREGORsignedacontracttosupplyself-loadingand
unloadingcementhandlingsystemsforthreecementcarriers.
Deliveriesofthesystemswillbeginduringsummer2009.
InMay,theOffshoredivisionreceivedacraneorderfromthe
US-basedEdisonChouestOffshore.Thecraneswillbedelive-
redbythefirstquarterof2009.Furthermore,alargenumberof
orderswerereceived,inparticularfordavits,fordeliveryduring
2008–2009.
Duringthefirstquarter,MacGREGORreceivedalargenumberof
shipcraneandhatchcoverorders,mainlyfromChinaandKorea.
MacGREGORwilldeliveratotalof276bulkhandlingcranesfor
vessels,tobedeliveredtoshipownersinGermany,Singapore,
ChinaandKorea.MacGREGORalsoagreedtodeliverhatchcovers
for70containervessels,120bulkvesselsand41generalcargo
ships.Theequipmentwillbedeliveredin2009–2011.
InMarch,MacGREGORreceivedamajorbulkhandlingequip-
mentorderfromtheTaiwanPowerCompanyforcoal-handling
equipment.MacGREGOR’sSiwertellbulkhandlingsystemfeatures
atotallyclosedconveyingsystemthatlimitstheamountofcargo
dustreleasedintotheair.
InMarch,MacGREGORalsoreceivedanorderfor30shipsetsof
tankercranesforaChineseshipyard.Provisionandhosehand-
lingcraneswillbedeliveredin2008–2010fortankersorderedby
Turkish,Norwegian,RussianandCypriotshipowners.
5Cargotec Corporation’s Financial Statements Review 2008
InJanuary,MacGREGORreceivedRoRoequipmentordersfor12
purecar/truckcarriers(PCTCs).Theseordersincludehoistable
cardecksforfourvesselsthatwillbebuiltintheKoreanHyundai
HeavyIndustriesshipyardanddeliveredduring2009–2010.
Additionally,theordersincludethedesignanddeliveryofkey
componentsforeightPCTCsunderconstructioninChina.
Cargotec Services
Theservicesmarketcontinuedtobeactive,whichwasreflected
inthedemandformaintenance,modernisationcontracts
andspareparts.Maintenancecontractswerereceivedfrom
Europeanaswellasemergingmarketcustomersinfor
exampleIndia,RussiaandAfrica.Cargoteccontinuedtoenhance
itsservicenetwork.
Anorderforannualmaintenanceofsome600loadercraneswas
receivedfromElectricitéRéseauDistributionFrance.
Themarketforshipconversionswasveryactiveandseveral
orderswerereceivedfordeliveryduring2008–2009.However,
theeconomicuncertaintysloweddowndemandduringthe
secondhalf.Thehatchcoverconversionorderreceivedfrom
EverlastShippingS.A.inGreeceinSeptemberwascancelled.
ContractsreceivedduringMayincludeoneforthesupplyof
electricallydrivenhoistablecardecksforFinnlines’twoRoRo
vessels,aswellasacontractfortheconversionofavessel’s
controlsystems.
InMay,afive-yearoperationandmaintenancecontractfor
rubber-tyredgantrycranesandreachstackerswassignedwith
ArshiyaInternationalinMumbai,Indiaandathree-yearleasing
andfullmaintenancecontractforreachstackersintheportof
Gothenburg,Sweden.
Additionalcontractsincludeafive-yearfullmaintenancecontract
inAprilonfourship-to-shorecranesdeliveredtotheportof
Vuosaari,Finland.Anothercontractinthesameportcoversthe
maintenanceofstraddlecarriers,terminaltractorsandreachst-
ackers.
InMarch,afive-yearservicecontractwassignedwiththe
Norwegiancompany,NorsteveOslo,coveringthemaintenance,
sparepartsandrepairsoffivestraddlecarriersattheSjursøya
containerterminalinthePortofOslo.
Duringthefirstquarter,amajormaintenancecontractforship
unloaderswasreceivedfromthePhilippines.
Sales
Cargotec’ssalesgrewby13percentandtotalledEUR3,399
(3,018)million.Salesderivedfrom2008acquisitionswere
EUR32million.Salesgrowthisaresultofincreaseddelivery
volumesinKalmarandMacGREGORandgrowthinservice.Sales
growthwasstrongestinAsiaPacific.
SalesforthefourthquarterwereEUR924(868)million.Hiab’s
salesamountedtoEUR216(244)million,Kalmar’sEUR413(364)
millionandMacGREGOR’sEUR298(261)million.Hiab’ssales
declinedduetotheweakenedmarketinEuropeduringthe
secondhalfoftheyear.Kalmar’sandMacGREGOR’ssalesgrewas
aresultofstrongorderintakeandincreaseddeliveries.
Salesfromservicesincreasedby15percentyear-on-yearand
amountedtoEUR871(757)million,representing26(25)percent
oftotalsales.Thisgrowthwasboostedbystrongdemandfor
sparepartsandmaintenanceagreements.Servicesaccounted
for23(17)percentofJanuary–DecembersalesatHiab,29(30)
percentatKalmar,and23(25)percentatMacGREGOR.
Order Book
Cargotec’sorderbooktotalledEUR3,054(2,865)milliononDe-
cember31,2008.Oftheorderbook,HiabaccountedforEUR164
(260)million,KalmarEUR704(660)million,andMacGREGOREUR
2,187(1,946)million.OrdercancellationsbookedinMacGREGOR
inthefourthquartertotalledEUR119million.
Order book, MEUR 31.12.2008
Share,% 31.12.2007
Share, %
Change,%
Hiab 164 5 260 9 -37
Kalmar 704 23 660 23 +7
MacGREGOR 2,187 72 1,946 68 +12
Internalorderbook -1 -1
Total 3,054 100 2,865 100 +7
Sales, MEUR 1-12/2008Share,
% 1-12/2007Share,
%Change,
%
Hiab 907 27 931 31 -3
Kalmar 1,515 44 1,343 44 +13
MacGREGOR 985 29 748 25 +32
InternalSales -8 -4
Total 3,399 100 3,018 100 +13
6Cargotec Corporation’s Financial Statements Review 2008
Financial Result
Cargotec’sfinancialresultreflectsayearoftwoverydistinct
halves,inwhichthefirsthalfwascharacterisedbysoaring
demand,whichthenplummetedduetotheglobalfinancialcrisis
andslowingmarketsespeciallyinHiab.
Cargotec’soperatingprofitfor2008totalledEUR173.7(203.1)
million.TheoperatingprofitincludesEUR19millionofcosts
andassetwrite-downsbookedinthefourthquarterfromthe
restructuringactionsinitiatedinSeptember.The2007comparison
operatingprofitincludesthecostofEUR18millioninKalmarbusi-
nessarearelatedtoacontainerspreaderinspectionandrepair
programmebookedinthefourthquarter.
Excludingrestructuringcoststheoperatingprofitfor2008was
EUR192.8(203.1)million,representing5.7(6.7)percentofsales.
TheoperatingprofitincludesaEUR8.3(9.9)millioncostimpact
fromthepurchasepriceallocationtreatmentofacquisitionsand
EUR9millionincostsfromtheOntheMovechangeprogramme.
OperatingprofitforthefourthquarterexcludingtheEUR19mil-
lionrestructuringcostsandwrite-downswasEUR35.9(46.3)milli-
on,equalto3.9(5.3)percentofsales.HiabaccountedforEUR3.7
(19.1)millionofthefourthquarteroperatingprofit,KalmarforEUR
12.1(26.9)million,andMacGREGORforEUR30.7(22.3)million.
OfCargotec’sbusinessareas,MacGREGORimproveditsprofitabi-
lityfromthepreviousyear,recordingarecordresultforthefinal
quarter;majorbusinessgrowthhasbeenachievedduringthelast
twoyears,alongsideanimprovementinprofitability.
Kalmar’soperatingprofitfortheyearincludesasignificant
amountofexpensesduetocostoverrunsinprojects.Duringthe
year,projectcostprovisionsofEUR16millionwerebookedinthe
businessarea’soperatingprofit:EUR4millionforthefirstquarter,
EUR5millionforthethirdandEUR7millionforthefourth.
Capacityutilisationrateswereloweredbyamajorslowdownin
theEuropeanmarketduringthethirdquarter,clearlyerodingthe
profitabilityofHiabinthesecondhalfoftheyear.Hiab’soperating
profitwasfurtherburdenedbytheslowerandmore-expensive-
than-expectedramp-upofHiab’scomponentplantextensionin
Narva,Estonia.
InbothHiabandKalmar,rawmaterialandmaterialcosts
continuedtoriseinthesecondhalfwhich,alongsidefaltering
demand,affectedprofitability.Clearsignsoffallingcosts,dueto
reductionsinrawmaterialprices,andlowercapacityutilisation
ratesamongsubcontractors,onlyemergedattheveryendofthe
year.
Duetoweakeningmarkets,Septembersawtheinitiationofa
restructuringprogramme,theoriginalreductionforecastsof700
employeesbeingincreasedtoalmost1,000.Thesemeasures
wereaimedatadjustingcapacityinHiabtotheprevailingmarket
situationandimprovingbothHiab’sandKalmar’sprofitability.
Moreover,anannualprofitabilityimprovementofaroundEUR
25millioninadditiontocapacityadjustmentsisbeingsought
throughthecostsavingprogramme.Therelatedcostsandwrite-
downsareestimatedatapproximatelyEUR35million.Ofthese,
EUR19millionwasbookedinthefinalquarterof2008,including
EUR3millioninwrite-downs.Theremainderisexpectedtoincur
inearly2009.
Netincomefor2008wasEUR120.8(138.4)millionandearnings
pershareEUR1.91(2.17).
Balance Sheet, Financing and Cash Flow
Cargotec’snetworkingcapitalgrewand,byDecember31,2008,
amountedto324(253)million.Capitalremainedemployedin
componentsandunfinishedproducts.Ontheotherhand,
advancepaymentsreceivedasorderconfirmationsfrom
MacGREGOR’scustomershadapositiveimpactonnetworking
capital.AdvancesreceivedtotalledEUR420(244)millionatthe
endoftheyear.TangibleassetsonthebalancesheetwereEUR
284(254)millionandintangibleassetsEUR754(751)million.
Cashflowfromoperatingactivitiesbeforefinancialitemsand
taxeswasEUR133.8(235.1)million.InJanuary–December,the
dividendpaymenttotalledEUR66.6(63.8)millionandacquisitions
amountedtoEUR46.5(172.5)million.NetdebtwasEUR478(326)
milliononDecember31,2008,includingEUR555(488)millionin
interest-bearingdebt.Thetotalequity/totalassetsratiowas33.0
(38.3)percentwhilegearingincreasedto55.3(36.3)percent.
Cargotec’sfinancingstructureishealthy.Interest-bearingdebt
consistsmainlyoflong-termcorporatebondsmaturingfromthe
year2012.OnDecember31,2008,CargotechadEUR635million
ofunusedcreditfacilities.
Returnonequityforthefinancialyearwas13.7(15.6)percentand
returnoncapitalemployedwas12.7(16.8)percent.
7Cargotec Corporation’s Financial Statements Review 2008
New Products and Product Development
In2008,Cargotec’sresearchandproductdevelopment
expenditurewasEUR47.0(46.4)million,representing1.4(1.5)
percentofsales.
InApril,CargotecopenedanengineeringcentreinPune,India,
providingengineeringresourcesinemergingmarketsinsupport
ofproductdevelopmentthatbetterrespondstolocalneeds.
Theengineeringcentrehasbeenestablishedasaresourcepool
forCargotecR&Dcentresaroundtheworld.Itcoversvarious
engineeringactivitiesfromdraftingtostructuralanalysisaswell
assoftwareengineering.Theunitemployedalmost40engineers
attheendoftheyear.
InSeptember,Hiabexpandeditscraneofferingwithasolution
thatfulfilsthenewEU-standardandenablesusingtruck-mounted
cranestoliftpersonnelbaskets.
Hiabintroducedanewautomaticloadcoveringsystemtobe
usedwithdemountableunitswhentransportingwasteand
recyclingmaterials.
Duringthefirstquarter,Hiabopenedastate-of-the-artcrane-
testingcentreatitsloadercraneproductionfacilityinHudiksvall,
Sweden.ThecentreoffersHiabandotherbusinessareasthe
opportunitytotestmoreandlongercranesandcomponentsas
wellasensuringthattestingismoreprecisethanbefore.
Kalmarlaunchedin2008theProFuture™conceptencompassing
allofitsenvironmentallyfriendlyequipment.Thisequipmentwill
beratedagainstfiveecologicaldecision-makingdrivers:sourceof
power,energyefficiency,emissions,noisepollutionandrecycla-
bility.
ThefirsttwoProFuture™solutionslaunchedwereanAC
electricalforklifttruckforemptycontainerhandlingandahybrid
straddlecarrier.Kalmarreceivedthefirstorderforahybrid
straddlecarrierduringthethirdquarter.TheseProFuture™
solutionswerefollowedinthethirdquarterbyavariablespeed
rubber-tyredgantrycraneandavariablespeedelectricstraddle
carrier.Duringthefourthquarter,Kalmarintroducedanadditional
twonewProFuture™solutions:anautomaticstackingcraneand
aship-to-shorecranewithregenerativeenergysource.
Duringthefirstquarter,Kalmarlaunchedanew,fully-automated
shuttlecarrierthatisabletopick,placeandtransportcontainers
betweenship-to-shore(STS)andyardstackingcraneswithouta
driver.ThenewKalmarAutoshuttle™ensuresthecostefficiency,
productivityandflexibilityofportoperations,particularlyinthe
verybigportsofthefuture.
During2008,Kalmarintroducedanewmediumrangeterminal
tractorofferingbetterergonomicsanddrivercomfortaswellas
lowernoiselevelsthanearliermodels,alsoanelectricforklift
truckwaslaunchedinthemediumliftrange.
MacGREGORcontinuedtodevelopelectronicallyoperatedcargo
handlingsolutionsandanewshipcranecontrolsystem.The
Offshoredivisionfocusedonthedevelopmentofdeckequip-
mentenablingtheuseofcranesindifficultweatherconditions
andwhenoperatingindeepwaters.InSeptember,MacGREGOR
signedthefirstcontracttodelivertotallyelectrically-drivensetsof
RoRoequipmenttotwopurecar/truckcarriers.
InFebruary,MacGREGORsignedanagreementwiththeUSNavy
onthedevelopmentofaship-to-shipvehicletransfersystem.
Withthehelpofthissystem,largevehiclescanbetransferred
fromoneshiptoanotherwhiletheshipsareinmotion.Theproto-
typeofthesystemwillbedeliveredbytheendof2009.
Capital Expenditure
Cargotec’scapitalexpenditurefor2008,excludingacquisitions
andcustomerfinancing,totalledEUR76.8(53.2)million.Invest-
mentsincustomerfinancingwereEUR35.9(37.5)million.
ThedecisionwastakentoconcentrateHiab’scranemanufacture
inEuropeinthreefactories,entailingtheclosureofproduction
attheSaloplantinFinland.Afurtherdecisionwastakentowind
downthemanufactureoftruck-mountedforkliftsinOhio,USA,
andfocusproductioninCargotec’scommonproductionunitin
Kansas,USA.
InApril,Cargotecformedasubsidiary,CargotecPortSecurity,
todevelopenhancedcontainersecuritysolutions.Cargotechas
beenexploringandinvestingintheareaofradiationdetectionin
containersecurityforthepasttwoyears.Ithasenteredintoan
exclusiveglobaltechnicallicensingagreementwiththeUS-based
InnovativeAmericanTechnology,andhassuccessfullyfieldtested
spreader-mountedradiationdetection.
Duringthesecondquarter,Hiabinitiatedtheextensionofatail
liftproductionplantinOborniki,Poland.Theprojectwas
completedduring2008.InKorea,Hiabinvestedinanew
paintinglineattheloadercranesproductionunit.Anotherproject
wasfinalisedinRaisio,Finland,resultinginamajorincreaseinthe
productioncapacityofdemountablesystemsduetotheimple-
mentationofamorecompetitiveproductionprocess.
Duringthesecondquarter,Kalmarstartedtoexpandits
productionfacilityforrough-terraincontainerhandlingequipment
inCibolo,Texas,USAaswellasinitiatinganexpansionofcapacity
8 Cargotec Corporation’s Financial Statements Review 2008
inIpoh,Malaysiaforcontainerspreaders.Investmentsinthe
firstquarterincludeexpandingitspresenceintheAmericasby
openinganewsalescompanyinMexicoaswellasanewservice
unitinZeebrugge,Belgium.
InMarch,MacGREGORopenedanewoffshoreequipment
productionunitinTianjin,China.Thenewunitalsoenables
productionoptimisationandefficiencyimprovementsinthe
offshoreproductionunitsofNorwayandSingapore.Partof
offshorecranesproductionweremovedfromNorwayto
Singaporetomakeroomfortheincreasedproductionofbigger
sizecranesinNorway.
On the Move change programme
InJanuary,CargotecannouncedthelaunchofanextensiveOn
theMovechangeprogrammeaimingataprofitabilityimprove-
mentofEUR80–100million.Thechangeprogrammeaimstoform
abasisforprofitablegrowththroughimprovedcustomerfocus
andefficiency.Theprojectsinthefirstphasehavefocusedon
streamliningsupportfunctionsandcompanystructureaswellas
initiatingITprojectsthatimproveefficiency.InFinland,Sweden,
SingaporeandUSA,operationsbeganinCargoteccountrycom-
panies.
InordertoimproveclosenesstocustomersHiab,Kalmarand
MacGREGORchangedtheirstructuretowardsmorecustomer
orientedorganisationsduringthereportingperiod.
Duringthesecondhalf,thefocuswasondevelopingtheglobal
supplyfootprintclosertocustomersaswellastowardslower
costenvironments.Forthisimplemention,Cargotecestablished
acommoncorporatelevelSupplyorganisation,whichisrespon-
sibleforsourcingandsupplyforthebusinessareas.
ThefirstjointsupplychainprojectsareproceedinginChina
andEstonia.TheproductioncapacityinShanghai,Chinawillbe
doubled.TheexpansionwillincludemovingHiab’sassemblyunit
tothesamesiteastheexistingKalmarfacility.Thecapacityand
productivityoftheproductionunitinNarva,Estonia,acquiredin
2007,hasbeenupgraded.Aspartoftheactionstoimprovethe
supplychain,Cargotecisplanningtoestablishanewassembly
factoryinPolandmainlyforKalmarequipment.
Acquisitions
DuringJanuary–December,Cargoteccompletedeightacquisi-
tions,ofwhichfourwereinHiab'sbusinessarea.
InordertostrengthenitsR&Dcapabilities,Cargotecacquired60
percentofIdeaDesigning&ConsultingS.r.l.inMassa,Italy.The
companyemploystenpeopleinproductdesign.
InOctober,Kalmaracquired80%oftwoItalianservice
companies,CVSTechnoportsS.r.l.andCVSServiceS.r.l.Subse-
quenttothetransaction,thecompaniesworkunderthename
OfficineCargotecFerrariandthecompaniesfocusondeveloping
theserviceofferingtowardscontainerandmaterialhandlingcus-
tomersinItaly.Thetwocompanies’combinedsalesturnoverin
2007wasapproximatelyEUR8millionandthecompaniesemploy
65people.
InAugust,KalmarsignedanagreementtoacquireArgentina-
basedEquiposyServiciosparaTerminalesyPuertosSRL.The
companyhasbeenKalmar’sdealerforArgentina,Uruguayand
Paraguay.Inadditiontonewequipmentdistribution,thecompany
providesequipmentcommissioning,technicalandsparepart
support,andequipmentrepairandrefurbishmentinSouthAmeri-
ca.Thecompany’ssalesin2007werearoundEUR1millionandit
employs17people.
InJune,Hiabconcludedanagreementtoacquirethebusinessof
along-termdistributoroftailliftsinNewZealand.Inadditionto
tailliftsales,thebusinesscomprisesinstallation,repairs,mainte-
nanceandsparepartssales.
AttheendofMarch,Hiabconcludedanagreementtoacquire
theoperationsoftheSouthAfricancompanyBowmanCranes
(Pty)Limited,Hiab’slong-termagentintheregion.Thiscompany
supplies,installsandservicestruck-relatedloadhandlingequip-
ment.In2007,itssaleswereapproximatelyEUR18millionandit
employs70people.
InFebruary,Hiabsignedanagreementtoacquire70percentof
theoperationsofanAustraliancompany,O’Leary’sMaterial
HandlingServicesPtyLtd.,theleadingsupplieroftailliftsin
WesternAustralia.Thecompanyemploys24peopleandhad
salesofapproximatelyEUR2.6millionin2007.
InFebruary,HiabalsoagreedtoacquireUK-basedDelEquipment
(UK)LimitedandUS-basedUltronLiftCorp.Bothofthesecompa-
niesmanufacturetaillifts.Theaggregatesalesofthecompanies
in2007wereapproximatelyEUR23millionandthecompanies
employ164persons.
9Cargotec Corporation’s Financial Statements Review 2008
InApril,MacGREGORsignedanagreementtoacquireUS-based
PlatformCraneService,Inc.Thesalesofthecompanyin2007
totalledUSD16millionandthecompanyemploys105persons.
Employees
OnDecember31,2008,Cargotecemployed11,826(11,187)
people.Duetotherestructuringmeasures,thenumberof
employeesdeclinedby370peoplemainlyinFinlandandSweden.
Hiabemployed4,308(4,418)people,Kalmar4,766(4,459),and
MacGREGOR2,577(2,223).Theaveragenumberofemployees
during2008was11,777(10,276).
OfCargotec’stotalemployees,13(14)percentwerelocatedin
Finland,20(22)percentinSwedenand30(30)percentintherest
ofEurope.NorthandSouthAmericanpersonnelrepresented11
(11)percent,AsiaPacific24(22)percentandtherestoftheworld
2(1)percentoftotalemployees.15(15)percentofthepersonnel
werefemaleand85(85)percentmale.3(3)percentofCargotec’s
totalemployeesworkedparttimeand97(97)percentfulltime.
SalariesandremunerationstoemployeestotalledEUR387(356)
millionforthefinancialperiod.
Asaresultoflowerdemandandprofitability,Cargotecinitiated
restructuringmeasuresinSeptember,mainlyinWesternEurope
andNorthAmerica.Thesemeasuresaimatadjustingcapacityin
HiabtotheprevailingmarketsituationandimprovingHiab’sand
Kalmar’sprofitability.Thenegotiationsendedbytheendofthe
yearresultedinareductionof954employees:271inFinland,
241inSweden,117intheUSA,91intheNetherlandsandatotal
of234inothercountries.Hiabsaw635employeereductions,
Kalmar309andcorporatefunctions10.
Restructuringcontinuedaftertheendofthefinancialyear,dueto
thefurtherweakeningofthemarkets.
Implementationofthenewpeoplestrategy,approvedby
Cargotec’sBoardin2007,wasenhancedinthereportingperiod.
Specialfocusareasincludedsupportforemployeeandchange
management,thedevelopmentofleadershipskillsandhuman
resourcescompetencedevelopment,alongsidecommittingthe
besttalents.Duringthereportingperiod,auniformoperating
modelandaglobalmatrixorganizationwerecreatedforhuman
resources(HR)managementinlinewiththeOnetheMove
changeprogramme.Thecomprehensiveintroductionofshared
HRmanagementprocessesandtoolswasreinforcedglobally.
Additionally,Cargotec’skeyHRpolicieswererenewedduringthe
year.
Environment
Cargotec’senvironmentalpolicydefinestheenvironmental
principles.ThemainenvironmentaleffectsofCargotec’sopera-
tionsarerelatedtotheuseofitsproducts.Forthisreason,the
Companyfocusedonindentifyingproduct-basedenvironmental
perspectivesin2008.
In2008,Cargotecintroduceditsnewsubcontractorcriteriain
whichenvironmentalsafety,occupationalhealthandsafetyand
qualityissueshavebeentakenintoaccountmoreextensively
thanbefore.
Cargotec’sstrategicbusinessdevelopmentgoalssupport
thecreationofholistic,sustainable,long-termsolutionsfor
customers.Inproductdevelopment,environmentalconside-
rationsformanintegralpartofplanningandmanufacturing.
Intheservicebusiness,thefocusisonextendingproductlife
cycleswhileanextensiveservicenetworkhelpsupholdefficient
operatingcharacteristics.Inadditiontoproductdevelopment
andservices,Cargotecisseekingtotrainitscustomerstouse
Cargotecequipmentsothatsafetyandenvironmentalmatters
reachanoptimallevel.
Energyefficiency,safetyandthepreventionofoilleakagesrepre-
sentkeyfocusareasinCargotec’sproductdevelopment.In2008,
Cargotecdeterminedaclearenvironmentalcriterionforenergy
efficiency,accordingtowhichitundertakestoreducetheuse
offossilfuelsby10percentinitsequipmentoverthenext6–10
years.Amajorstepwastakeninenvironmentalimpactassess-
mentwhenKalmar,partlyasaresultoftheaforementioned
commitment,launcheditsProFuture™environmentalcriteria.
Themostsignificantenvironmentaleffectsassociatedwith
Cargotec’sprocessesarerelatedtothoseoriginatingfromthe
operationsofthevariousbusinessunitsaswellastransportation
andcommutingtoandfromwork.ThecertifiedISO9001andISO
14001qualityandenvironmentalmanagementsystemsform
thebasisofCargotec’senvironmentalmanagement,andregular
internalandexternalauditsandmanagementauditsareaimedat
monitoringtheachievementoftherelatedobjectives.
Cargoteccontinuedtobuildcertifiedmanagementsystemsinto
itsproductionunitswiththeaimofcreatinganoperational
modelthathelpstoidentifythemostimportantenvironmental
effectsandrespondtotheminallunits.EightofHiab’s16
productionunitsandtwoofitssalescompaniesapplyenviron-
mentalmanagementsystemscertifiedunderISO14001.These
systemscoverapproximately80percentofthesalesofHiab’s
productionunits.SixofKalmar’ssevenproductionunitsapply
certifiedenvironmentalmanagementsystems,thesesystems
10CargotecCorporation’sFinancialStatementsReview2008Cargotec Corporation’s Financial Statements Review 2008
coveringalsoapproximately80percentofthesalesofKalmar’s
productionunits.MacGREGORcommissionsmostofitspro-
ductsfromselectedpartnersindependentlyresponsiblefor
theirproductionprocesses.Operationalguidelinesrelatedtothe
managementofenvironmentalissuesareincludedinthequality
systemsofmostMacGREGORunits.
Furthermore,anextensiveenvironmentalassessmentwas
conductedin14productionunitsinaccordancewithaprogram-
meintroducedin2007.Thisinvolvedtheevaluationofmanage-
mentsystems,facilitiesandproductionfromtheviewpointof
theirenvironmentaleffectswhiletakingintoaccounttheunits’
operatingenvironment.Extensivesoilcleaningworkwascarried
outintwoCargotecsitesin2008asaresultofindustrialactivities
thathadtakenplaceinthosesitesearlier.
Internal control and risk management
Cargotec’sPresidentandCEOandtheExecutiveBoardare
responsibleforthemethods,implementationandsupervisionof
riskmanagement,andreportonthesetotheBoardofDirectors.
TheCorporateriskmanagementfunctionisresponsiblefor
thedevelopmentofcomprehensiveriskmanagement.Thisis
supportedbythecreationofCorporate-wideriskmanagement
principles,practicesandriskreports,thedevelopmentoftools
andtheapplicationandadoptionofthesetools.Businessareas
andunitsareresponsibleforassigning,managingandreporting
therisksinvolvedintheirownoperations.TheCorporateTreasury
functionmanagesfinancialriskscentrally.Cargotechasaninter-
nalauditingfunctionwhichisresponsibleforinternalcontroland
businessriskauditing.TheInternalAuditunitoperatesunderthe
supervisionofthePresidentandCEOandtheBoardofDirectors’
AuditCommittee,reportingregularlytotheAuditCommitteeon
itsoperationsandauditresults.
Cargotecbeganthesystematicdevelopmentofitsinternal
controlin2007.Cargotec’sBoardofDirectorsapprovedthe
internalcontrolpolicyin2008.Responsibilityforinternalcontrol
atCargotecisdividedintothreetiers.Linemanagement
isprimarilyresponsibleforinternalcontrol.Itisaidedby
Corporatesupportfunctions,whichdefinepoliciesandinstruct
onandsuperviseriskmanagement.Internalandexternalaudits
formthethirdtier,theirtaskbeingtoensurethatthefirsttwo
tiersarefunctioningeffectively.AsCargotecbecomesmore
harmonised,itscapabilitiesforthedevelopmentandimplemen-
tationofriskmanagementwillbefurtherimproved.Thegoalis
that,besidesgeneralriskmanagementprinciplesandguidelines,
Cargotecalsohasriskmanagementtoolsthatfacilitatepractical
workandwhichareimplementedthroughouttheCompany.
Duringtheyear,Cargotechasdevelopedabasicriskmanage-
menttool,theapplicationandadoptionofwhichwillbestudied
intheoperations,businessprojectsandriskreportingofthe
businessunits.
Cargotecdefinesariskasanyinternalorexternalthreatoruncer-
taintywhichmaypreventorjeopardiseoperationsandthe
achievementofobjectives.Risksaredividedrisksintostrategic
andbusinessrisks,financialrisksandoperationalandhazard
risks.
Strategicandbusinessrisksarerelatedtobusinesscyclesin
theworldeconomyandCargotec’scustomersectors,the
availabilityofrawmaterialsandcomponentsandtrendsinthe
relatedprices,mergersandacquisitionsandtheoperationsof
dealersandsubcontractors.Cargotecaddressestheserisksby
strivingtoidentifythemandpreparefortheminadvance.
Cargotec’streasuryoperationsandfinancialriskmanagement
principlesaredefinedintheCorporateTreasuryPolicy.Financial
risksarisingfromCargotec’sbusinessactivitiesincludecurrency,
interestrate,refinancingandliquidity,counterpartyandoperative
creditrisks.TheCompanyseekstoprotectitselfagainstthese
risksinordertoensureafinanciallysoundbasisfordevelopingits
businessoperations.
Operationalrisksrelatetopersons,property,processes,products,
informationtechnologyandpractices.Cargotec’smainactivities
relatedtothemanagementoftheserisksarerelatedfirstand
foremosttoincreasingproductsafetyandinformationsecurity
andensuringbusinesscontinuity.Withrespecttokeyperson
risks,successionplansforleadershipandkeyassignments
areupdatedonanannualbasis,forthepurposeofensuring
continuityinoperations.
Cargotec’smainhazardrisksincluderisksrelatedtopersonnel,
property,businessinterruptionsandlogistics.Inadditionto
preventiveriskmanagementmeasures,Cargotecprotectsitself
againsttheserisksbytakingoutworldwideinsurancepolicies
thatcoverallunits.
Shares, Share Capital and Option rights
Cargotec’ssharecapitalonDecember31,2008totalled
EUR64,304,280.ThesharecapitalincreasedbyEUR83,907during
thefinancialperiodasaresultofthesubscriptionforclassB
sharesunderCargotecoptionrights.
OnDecember31,2008,thenumberoflistedclassBshares
totalled54,778,191whilethatofunlistedclassAsharestotalled
9,526,089.ClassBsharesaccountedfor85.2(85.2)percentofthe
11CargotecCorporation’sFinancialStatementsReview2008Cargotec Corporation’s Financial Statements Review 2008
totalnumberofsharesand36.5(36.5)percentofvotes.ClassA
sharesaccountedfor14.8(14.8)percentofthetotalnumberof
sharesand63.5(63.5)percentofvotes.Thetotalnumberofvotes
attachedtoallshareswas15,002,201(14,994,074)attheyear
end.Attheendofthefinancialperiod,Cargotecheldatotalof
2,990,725classBshares,whichcorrespondsto4.7percentofthe
totalnumberofsharesand2.0percentofvotes.
Tradingwith2005AoptionrightsendedonMarch20,2008.The
remaining2005Boptionrightsmaybeusedtosubscribefora
further104,730classBshares,therebyincreasingCargotec’s
sharecapitalbyEUR104,730.Thesaidnumberofsharesthatcan
besubscribedforundertheremainingoptionrightsconstitutes
0.2percentofCargotec’stotalnumberofsharesand0.07percent
ofthetotalnumberofvotes.
Market Capitalisation and Trading
TheclosingpriceofCargotec’sclassBsharesonDecember31,
2008wasEUR8.09.TheaveragesharepriceforJanuary–
DecemberwasEUR21.47,thehighestquotationbeingEUR36.49
andthelowestEUR7.63.Thesharepricedropped74percent
duringthefinancialperiod.InJanuary–December,approximately
86millionCargotecclassBsharesweretradedontheNASDAQ
OMXHelsinki,correspondingtoaturnoverofapproximatelyEUR
1,868million.TheaveragedailytradingvolumeofclassBshares
was338,722sharesorEUR7,381,727.
OnDecember31,2008,thetotalmarketvalueofCargotecclass
BshareswasEUR419million,excludingtreasurysharesheld
bytheCompany.Theperiod-endmarketcapitalisation,inwhich
unlistedclassAsharesarevaluedattheaveragepriceofclassB
sharesonthelasttradingdayofthefinancialperiod,wasEUR495
million,excludingtreasurysharesheldbytheCompany.
Changes in Cargotec’s Management
OnDecember18,Cargotec’sBoardofDirectorsappointedPekka
VauramoasSeniorExecutiveVicePresidentandDeputytoCEO
MikaelMäkinen.Vauramocontinuestoberesponsibleforthe
Kalmarbusinessarea.
AxelLeijonhufvudwasappointedasSeniorVicePresident,Pro-
ductSupply,startingfromJanuary1,2009.Leijonhufvudwasear-
lierresponsibleforproductsupplyinKalmarandwasChairman
ofKalmar’sRTCH(RoughTerrainContainerHandling)boardat
CargotecCorporation.LauriBjörklund,SeniorVicePresident,Pro-
ductionandPurchasing,wasappointedasSeniorVicePresident,
CorporateDevelopmentProjectsasofJanuary1,2009.
OnFebruary1,2008,Cargotec’sSeniorExecutiveVicePresident
KariHeinistöwasappointedtoleadtheOntheMovechange
programme.HecontinuesasamemberoftheExecutiveBoard
andsecretarytoCargotec’sBoardofDirectors.EevaSipiläwas
appointedasCargotec’sCFOasofFebruary1,2008.MinnaKarhu
wasappointedasVicePresident,CorporateCommunicationsof
CargotecasofFebruary1,2008.
Decisions Taken at Cargotec Corporation’s Annual General Meeting
CargotecCorporation’sAnnualGeneralMeeting(AGM)washeld
onFebruary29,2008inHelsinki.Themeetingapprovedthefi-
nancialstatementsandconsolidatedfinancialstatementsaswell
asgranteddischargefromliabilitytothePresidentandCEOand
themembersoftheBoardofDirectorsfortheaccountingperiod
January1–December31,2007.
TheAGMapprovedtheBoard’sproposalofadividendofEUR
1.04foreachofthe9,526,089classAsharesandEUR1.05forthe
52,789,559outstandingclassBshares.
ThenumberofmembersoftheBoardofDirectorswasconfirmed
atsixaccordingtotheproposaloftheBoard’sNominationand
CompensationCommittee.HenrikEhrnrooth,TapioHakakari,Ilkka
Herlin,PeterImmonen,KarriKaitueandAnttiLagerrooswere
electedasmembersoftheBoardofDirectors.
AuthorisedpublicaccountantsJohanKronbergandPricewater-
houseCoopersOywerere-electedasauditorsaccordingtothe
proposalofAuditCommitteeofCargotec’sBoardofDirectors.
Inaddition,theAGMresolvedtoamendtheArticlesof
AssociationmainlyduetoandtoalignwiththenewFinnish
CompaniesActeffectiveasfrom2006.
Authorisations Granted by the Annual General Meeting
TheAGMauthorisedtheBoardofDirectorsofCargotectodecide
onacquisitionoftheCompany’sownshareswithnon-restricted
equity.Thesharesmaybeacquiredinordertodevelopthe
capitalstructureoftheCompany,financeorcarryoutpossible
acquisitions,implementshare-basedincentiveplans,ortobe
transferredforotherpurposesortobecancelled.Thesharesmay
beacquiredthroughadirectedacquisitionasdefinedinFinnish
CompaniesAct,Chapter15§6.
Altogethernomorethan6,400,000ownsharesmaybepur-
chased,ofwhichnomorethan952,000areclassAsharesand
12CargotecCorporation’sFinancialStatementsReview2008Cargotec Corporation’s Financial Statements Review 2008
5,448,000areclassBshares.Theabove-mentionedamounts
includethe1,904,725classBsharesintheCompany’spossessi-
onontheAGMdate,whichwerepurchasedduring2005–2007.
Theproposedamountcorrespondstolessthan10percentof
thesharecapitaloftheCompanyandthetotalvotingrights.The
acquisitionofownshareswilldecreasethenon-restrictedequity.
Theauthorisationisineffectforaperiodof18monthsfromthe
dateofdecisionoftheAGM.
Inaddition,theAGMauthorisedtheBoardofDirectorstodecide
ontransferoftreasuryshares.TheBoardofDirectorswas
authorisedtodecidetowhomandinwhichorderthetreasury
shareswillbetransferred.TheBoardofDirectorsmaydecide
onthetransferoftreasurysharesotherwisethaninproportion
totheexistingpre-emptiverightofshareholderstopurchase
theCompany’sownshares.Thetreasurysharesmaybeusedas
compensationinacquisitionsandinotherarrangementsaswell
astoimplementtheCompany’sshare-basedincentiveplansin
themannerandtotheextentdecidedbytheBoardofDirectors.
TheBoardofDirectorshasalsotherighttodecideonthetransfer
ofthesharesinpublictradingattheNASDAQOMXHelsinkitobe
usedascompensationinpossibleacquisitions.Thisauthorisation
isineffectforaperiodof18monthsfromthedateofdecisionof
theAGM.
Organisation of the Board of Directors
Cargotec’sBoardofDirectorsinitsorganisingmeetingelected
IlkkaHerlintocontinueasChairmanoftheBoardandHenrik
EhrnroothtocontinueasDeputyChairman.Cargotec’s
SeniorExecutiveVicePresidentKariHeinistöcontinuestoactas
secretarytotheBoardofDirectors.Cargotec’sBoardofDirectors
decidedthattheAuditCommittee,NominationandCompensati-
onCommitteeaswellasWorkingCommitteecontinuetoassist
theBoardinitswork.
TheBoardofDirectorselectedamongitsmembersIlkkaHerlin,
KarriKaitueandAnttiLagerroosasmembersoftheAudit
Committee.KarriKaituewasre-electedasChairmanoftheAudit
Committee.BoardmembersHenrikEhrnrooth,TapioHakakari,
IlkkaHerlinandPeterImmonenwereelectedtotheNomination
andCompensationCommittee.IlkkaHerlinwasre-electedas
chairmanoftheNominationandCompensationCommittee.
BoardmembersTapioHakakari,IlkkaHerlinandPeterImmonen
wereelectedtotheWorkingCommittee.IlkkaHerlinwasre-
electedaschairmanoftheWorkingCommittee.
Share Repurchases
Cargotec’sBoardofDirectorsdecidedtoexercisetheautho-
risationoftheAGMtoacquiretheCompany’sownshares.In
accordancewiththeauthorisationclassBshareswerepurchased
atpublictradingintheNASDAQOMXHelsinkiatthemarketprice.
Atotalof1,086,000ownshareswererepurchasedduringthe
periodMarch25–August23,2008atanaveragepriceofEUR
21.73.Cargotecheldatotalof2,990,725classBshareson
December31,2008.
Short-term Risks and Uncertainties
Duetothefinancialcrisis,theglobaleconomicsituationis
markedbyhugeuncertainty.Cargotec’soperationsaresubject
tosignificantshort-termrisksanduncertaintyfactors,specifically
relatedtotheeffectsoftheslumpondemandforCargotec’s
productsandservicesandthewillingnessofcustomerstoinvest.
Thefactthatmanyfactorsunderlyingthisuncertaintyarebeyond
thecontroloftheCompanymerelyservestoamplifythechallen-
geconfrontingriskanalysis.
Prolongeduncertaintyandcreditdroughtincreasestheriskof
lower,generalwillingnesstoinvestandconsequentlydemandfor
Cargotec’sequipmentcouldfurtherdecrease.Shipbuildinginpar-
ticularhasbeenaffectedbysignificantordercancellationsdueto
lowershippingutilisationratescombinedwithmajorincreasesin
financingcosts.Thecreditcrunchmayalsoseeothercustomer
groupsmovetheirinvestmentdecisionsbackorcancelorders.
Furthermore,customers’andsuppliers’financialsituationswill
affectthecollectionofreceivablesandthelevelofbaddebt.
Lowerdemandwillrequireadditionalcapacityadjustment
measures.Furtherfallingoffofdemandatafasterratethanthe
implementationofcapacitycutswillhaveanegativeimpacton
performance.
Events after the reporting period
StaffreductionscontinuedinJanuaryasthemarketscontinued
toweaken.IntheunitmanufacturingtailliftsinBispgården,
Sweden,negotiationsbeganontheneedforareductioninthe
workforceof75.AtKalmar’sLjungbyandLidhultunitsinSweden,
negotiationsbeganontheneedforareductionintheworkforce
of97.Cargotecplanstomakeitsoperationsmoreefficientby
reorganisingandtransferringamajorityofitsbusinessinLjungby
toitsLidhultfacility.Meanwhile,inFinlandnegotiationsbeganfor
theplannedtemporarylay-offof900staffforamaximumof90
daysinRaisioandTampereandareductionof60employeesin
Tampere.
13CargotecCorporation’sFinancialStatementsReview2008Cargotec Corporation’s Financial Statements Review 2008
Board of Director’s Proposal on the Distribution of Profit
Theparentcompany’sdistributableequityonDecember31,2008
wasEUR959,964,211.07ofwhichnetincomefortheperiodwas
EUR158,536,423.21TheBoardofDirectorswillproposetothe
AnnualGeneralMeetingconveningonMarch5,2009,thatof
thedistributableprofit,adividendofEUR0.59pereachofthe
9,526,089classAshareandEUR0.60pereach51,787,466classB
shareoutstaningbepaid,totallingEUR36,692,872.11.Therestof
thedistributableequity,EUR923,271,338.96willberetainedand
carriedforward.
NosignificantchangeshaveoccurredintheCargotec’sfinancial
positionaftertheendofthefinancialyear.Theliquidityisgood
and,intheBoardofDirector’sview,theproposeddistribution
ofdividenddoesnotposearisktotheCompany’sfinancial
standing.
Outlook
Inthecurrentuncertaineconomicsituationitisdifficultto
estimatethedemandforCargotec’sproducts.Thisisfurther
complicatedbypossibleordercancellationsanddelays.The
preconditionsforsalesgrowthexistinservicesandMacGREGOR.
SalesofHiabandKalmarareexpectedtodeclinefrom2008.
SignificantrestructuringmeasurescostingEUR35millionwere
decidedonduring2008tocreateanewsupplyplatformand
improveprofitabilityinCargotec.Focusisontherapidimplemen-
tationofthesemeasures.ApproximatelyEUR16millionofthese
costsremainfor2009.
Financial calendar
AnnualReport2008availableontheCargotec’sinternetpages,
week7
AnnualGeneralMeetingonThursdayMarch5,2009
RecorddatefordividendonTuesdayMarch10,2009
DividendpaymentonTuesdayMarch17,2009
InterimReportfortheperiodJanuary–March
onTuesdayApril28,2009
InterimReportfortheperiodJanuary–June
onMondayJuly20,2009
InterimReportfortheperiodJanuary–September
onThursdayOctober22,2009
Helsinki,February2,2009
Cargotec Corporation
BoardofDirectors
14CargotecCorporation’sFinancialStatementsReview2008Cargotec Corporation’s Financial Statements Review 2008
Cargotec Corporation’s Financial Statements Review 2008
Consolidated Income Statement
MEUR 10-12/2008 10-12/2007 1-12/2008 1-12/2007
Sales 923.5 867.5 3,399.2 3,018.2
Costofgoodssold -763.8 -689.3 -2,762.5 -2,376.8
Non-recurringitems* - -18.0 - -18.0
Gross profit 159.7 160.3 636.7 623.4
Grossprofit,% 17.3 % 18.5 % 18.7% 20.7%
Otheroperatingincome 15.0 6.7 39.1 26.8
Sellingandmarketingexpenses -49.4 -54.3 -189.9 -197.4
Researchanddevelopmentexpenses -13.2 -10.4 -43.6 -38.9
Administrationexpenses -58.7 -44.7 -212.0 -176.1
Restructuringcosts -19.1 - -19.1 -
Otheroperatingexpenses -18.1 -11.4 -38.0 -34.9
Shareofassociatedcompanies’andjointventures’netincome 0.5 0.1 0.6 0.3
Operating profit 16.8 46.3 173.7 203.1
Operatingprofit,% 1.8 % 5.3 % 5.1% 6.7%
Financing income 1.8 5.6 16.0 16.7
Financingexpenses -15.2 -12.2 -44.5 -35.5
Income before taxes 3.4 39.7 145.2 184.4
Incomebeforetaxes,% 0.4 % 4.6 % 4.3% 6.1%
Taxes 5.6 -10.8 -24.4 -46.0
Net income for the period 9.0 28.9 120.8 138.4
Netincomefortheperiod,% 1.0 % 3.3 % 3.6% 4.6%
Net income for the period attributable to:
EquityholdersoftheCompany 8.5 27.8 118.4 136.5
Minorityinterest 0.4 1.1 2.4 1.8
Total 9.0 28.9 120.8 138.4
Earnings per share for profit attributable to the
equity holders of the Company:
Basicearningspershare,EUR 0.14 0.45 1.91 2.17
Dilutedearningspershare,EUR 0.14 0.44 1.91 2.16
*Kalmarbusinessarearelatedcontainerspreaderinspectionandrepairprogramme
15CargotecCorporation’sFinancialStatementsReview2008Cargotec Corporation’s Financial Statements Review 2008
Consolidated Balance Sheet
MEUR 31.12.2008 31.12.2007
ASSETS
Non-current assets
Goodwill 669.2 670.2
Otherintangibleassets 85.0 81.0
Property,plantandequipment 283.5 253.7
Investmentsinassociatedcompaniesandjointventures 7.0 4.8
Available-for-saleinvestments 2.0 2.3
Loansreceivableandotherinterest-bearingassets1) 7.7 5.5
Deferredtaxassets 97.2 55.5
Derivativeassets 55.0 8.9
Othernon-interest-bearingassets 8.1 12.0
Total non-current assets 1,214.6 1,094.0
Current assets
Inventories 881.9 657.4
Loansreceivableandotherinterest-bearingassets1) 0.2 0.4
Incometaxreceivables 18.5 18.3
Derivativeassets 130.4 50.8
Accountsreceivableandothernon-interest-bearingassets 714.0 582.8
Cashandcashequivalents1) 79.2 179.0
Total current assets 1,824.3 1,488.7
Total assets 3,038.9 2,582.6
1)Includedininterest-bearingnetdebt
16CargotecCorporation’sFinancialStatementsReview2008Cargotec Corporation’s Financial Statements Review 2008
MEUR 31.12.2008 31.12.2007
EQUITY AND LIABILITIES
Equity attributable to the equity holders of the Company
Sharecapital 64.3 64.2
Sharepremiumaccount 98.0 97.4
Treasuryshares -93.6 -70.0
Translationdifferences -20.4 -29.6
Fairvaluereserves -54.5 19.9
Retainedearnings 861.6 808.7
Total equity attributable to the equity holders of the Company 855.3 890.6
Minorityinterest 9.1 6.1
Total equity 864.4 896.7
Non-current liabilities
Loans1) 440.2 433.3
Deferredtaxliabilities 43.0 38.5
Pensionobligations 33.5 35.2
Provisions 34.6 38.4
Derivativeliabilities 84.5 14.9
Othernon-interest-bearingliabilities 26.6 53.2
Total non-current liabilities 662.5 613.6
Current liabilities
Currentportionoflong-termloans1) 4.0 3.5
Otherinterest-bearingliabilities1) 110.6 51.6
Provisions 70.4 70.8
Incometaxpayables 53.2 46.9
Derivativeliabilities 129.3 17.6
Accountspayableandothernon-interest-bearingliabilities 1,144.4 882.0
Total current liabilities 1,512.0 1,072.4
Total equity and liabilities 3,038.9 2,582.6
1)Includedininterest-bearingnetdebt.Inaddition,thecalculationoftheinterest-bearingnetdebtincludesthehedgingofcross-currency
riskrelatingtotheUSD300millionPrivatePlacementbond,totallingonDecember31,2008,EUR10.2(Dec31,2007:21.9)million.
17CargotecCorporation’sFinancialStatementsReview2008Cargotec Corporation’s Financial Statements Review 2008
Consolidated Statement of Changes in Equity
Attributabletotheequityholdersofthecompany
MEUR
Share
capital
Share
premium
account
Treasury
shares
Translation
differences
Fair
value
reserves
Retained
earnings Total
Minority
interest
Total
equity
Equity on 31.12.2006 64.0 96.0 -23.9 -12.0 10.5 734.2 868.8 8.0 876.8
Gain/lossoncashflowhedgesbookedto
equity* 18.5 18.5 -0.0 18.5
Gain/lossoncashflowhedges
transferredtoIS -9.1 -9.1 -9.1
Translationdifferences -17.6 -17.6 -0.7 -18.3
Netincomerecogniseddirectlyinequity - - - -17.6 9.4 - -8.2 -0.7 -8.9
Netincomefortheperiod 136.5 136.5 1.8 138.4
Totalrecognisedincomeandexpenses
fortheperiod - - - -17.6 9.4 136.5 128.4 1.1 129.5
Dividendspaid -63.2 -63.2 -0.5 -63.7
Sharessubscribedwithoptions 0.2 1.3 1.5 1.5
Acquisitionoftreasuryshares -46.1 -46.1 -46.1
Share-basedincentives,valueofreceived
services* 1.2 1.2 1.2
Otherchanges - -2.5 -2.5
Equity on 31.12.2007 64.2 97.4 -70.0 -29.6 19.9 808.7 890.6 6.1 896.7
Gain/lossoncashflowhedgesbookedto
equity* -103.6 -103.6 0.4 -103.2
Gain/lossoncashflowhedges
transferredtoIS 29.2 29.2 29.2
Translationdifferences 9.2 9.2 0.6 9.8
Totalnetincomerecogniseddirectlyin
equity - - - 9.2 -74.5 - -65.3 1.0 -64.2
Netincomefortheperiod 118.4 118.4 2.4 120.8
Totalrecognisedincomeandexpenses
fortheperiod - - - 9.2 -74.5 118.4 53.2 3.4 56.6
Dividendspaid -65.3 -65.3 -0.6 -66.0
Sharessubscribedwithoptions 0.1 0.6 0.7 0.7
Acquisitionoftreasuryshares -23.6 -23.6 -23.6
Share-basedincentives,valueofreceived
services* -0.2 -0.2 -0.2
Otherchanges - 0.2 0.2
Equity on 31.12.2008 64.3 98.0 -93.6 -20.4 -54.5 861.6 855.3 9.1 864.4
*Netoftax
18CargotecCorporation’sFinancialStatementsReview2008Cargotec Corporation’s Financial Statements Review 2008
Consolidated Cash Flow Statement
MEUR 1-12/2008 1-12/2007
Netincomefortheperiod 120.8 138.4
Depreciationandimpairments 60.1 59.8
Financingitemsandtaxes 52.9 64.7
Changeinreceivables -171.2 -118.4
Changeinpayables 309.3 198.5
Changeininventories -237.5 -107.6
Otheradjustments -0.6 -0.4
Cash flow from operations 133.8 235.1
Interestreceived 4.9 5.6
Interestpaid -25.5 -12.0
Dividendsreceived 0.0 0.0
Otherfinancialitems 11.2 -12.5
Incometaxespaid -30.7 -43.6
Cash flow from operating activities 93.7 172.6
Capitalexpenditure -113.2 -90.8
Proceedsfromsalesoffixedassets 15.0 12.5
Acquisitions,netofcash -46.5 -172.5
Cashflowfrominvestingactivities,otheritems -10.5 -13.5
Cash flow from investing activities -155.1 -264.3
Proceedsfromsharesubscriptions 0.7 1.5
Acquisitionoftreasuryshares -23.6 -46.1
Proceedsfromlong-termborrowings 0.7 274.5
Repaymentsoflong-termborrowings -2.4 -29.5
Proceedsfromshort-termborrowings 61.3 40.8
Repaymentsofshort-termborrowings -32.0 -31.5
Dividendspaid -66.6 -63.8
Cash flow from financing activities -61.9 145.9
Change in cash -123.3 54.2
Cash,cashequivalentsandbankoverdraftsatthebeginningofperiod 167.5 114.5
Effectofexchangeratechanges 1.7 -1.1
Cash, cash equivalents and bank overdrafts at the end of
period 45.9 167.5
Bankoverdraftsattheendofperiod 33.3 11.4
Cash and cash equivalents at the end of period 79.2 179.0
KEY FIGURES
1-12/2008 1-12/2007
Equity/share EUR 13.95 14.29
Interest-bearingnetdebt MEUR 477.8 325.5
Totalequity/totalassets % 33.0 38.3
Gearing % 55.3 36.3
Returnonequity % 13.7 15.6
Returnoncapitalemployed % 12.7 16.8
19CargotecCorporation’sFinancialStatementsReview2008Cargotec Corporation’s Financial Statements Review 2008
Segment Reporting
Sales by geographical segment, MEUR 1-12/2008 1-12/2007
EMEA 1,901 1,677
Americas 556 647
AsiaPacific 942 695
Total 3,399 3,018
Sales by geographical segment, % 1-12/2008 1-12/2007
EMEA 55.9 % 55.6 %
Americas 16.4 % 21.4 %
AsiaPacific 27.7 % 23.0 %
Total 100.0 % 100.0 %
Sales, MEUR 1-12/2008 1-12/2007
Hiab 907 931
Kalmar 1,515 1,343
MacGREGOR 985 748
Internalsales -8 -4
Total 3,399 3,018
Operating profit, MEUR 1-12/2008 1-12/2007
Hiab 49.4 * 73.8
Kalmar 89.6 * 105.5 **
MacGREGOR 83.6 59.4
Corporateadministrationandother -29.8 -17.5
Operatingprofitfromoperations 192.8 * 221.1 **
Restructuringcosts -19.1 -
Containerspreaderinspectionandrepairprogramme - -18.0
Total 173.7 203.1
Operating profit, % 1-12/2008 1-12/2007
Hiab 5.4% * 7.9 %
Kalmar 5.9% * 7.9 %**
MacGREGOR 8.5% 7.9 %
Cargotec,operatingprofitfromoperations 5.7% * 7.3 %**
Cargotec 5.1% 6.7 %
*ExcludingrestructuringcostsofwhichbusinesssegmentHiabaccountedforEUR14.1million,KalmarforEUR4.5millionandCorporate
administrationforEUR0.3million.
**Excludingtheone-offcostofEUR18.0millionrelatedtoacontainerspreaderinspectionandrepairprogramme
20 Cargotec Corporation’s Financial Statements Review 2008 Cargotec Corporation’s Financial Statements Review 2008
Orders received, MEUR 1-12/2008 1-12/2007
Hiab 818 985
Kalmar 1,566 1,429
MacGREGOR 1,393 1,696
Internalordersreceived -9 -4
Total 3,769 4,106
Order book, MEUR 31.12.2008 31.12.2007
Hiab 164 260
Kalmar 704 660
MacGREGOR 2,187 1,946
Internalorderbook -1 -1
Total 3,054 2,865
Capital expenditure, MEUR 1-12/2008 1-12/2007
Infixedassets(excludingacquisitions) 75.7 52.5
Inleasingagreements 1.1 0.7
Incustomerfinancing 35.9 37.5
Total 112.8 90.7
Number of employees at the end of period 31.12.2008 31.12.2007
Hiab 4,308 4,418
Kalmar 4,766 4,459
MacGREGOR 2,577 2,223
Corporateadministration 175 87
Total 11,826 11,187
Average number of employees 1-12/2008 1-12/2007
Hiab 4,509 4,091
Kalmar 4,680 4,233
MacGREGOR 2,449 1,880
Corporateadministration 139 72
Total 11,777 10,276
21CargotecCorporation’sFinancialStatementsReview2008Cargotec Corporation’s Financial Statements Review 2008
Notes
Taxes in income statement
MEUR 1-12/2008 1-12/2007
Currentyeartaxexpense 44.3 56.2
Changeindeferredtaxassetsandliabilities -9.7 -3.9
Taxexpenseforpreviousyears -10.2 -6.3
Total 24.4 46.0
Commitments
MEUR 31.12.2008 31.12.2007
Guarantees 0.6 2.2
Dealerfinancing 0.2 8.4
Endcustomerfinancing 11.5 7.5
Operatingleases 48.0 47.7
Offbalancesheetinvestmentcommitments - 1.2
Othercontingentliabilities 4.0 3.7
Total 64.3 70.6
Cargotecleasesproperty,plantandequipmentundernon-cancellableoperatingleases.Theleaseshavevaryingtermsandrenewalrights.
Itisnotanticipatedthatanymaterialliabilitieswillarisefromtradefinancecommitments.
The future minimum lease payments under non-cancellable operating leases
MEUR Dec31,2008 Dec31.,2007
Lessthan1year 14.9 14.1
1−5years 26.5 27.4
Over5years 6.7 6.3
Total 48.0 47.7
TheaggregateoperatingleaseexpensestotalledEUR15.6(Jan1−Dec31,2007:13.6)million.
22 Cargotec Corporation’s Financial Statements Review 2008 Cargotec Corporation’s Financial Statements Review 2008
Fair values of derivative financial instruments
Positive
fairvalue
Negative
fairvalue
Netfair
value
Netfair
value
MEUR 31.12.2008 31.12.2008 31.12.2008 31.12.2007
FXforwardcontracts,cashflowhedges 79.6 199.0 -119.4 11.3
FXforwardcontracts,non-hedgeaccounted 82.1 14.9 67.2 20.7
Crosscurrencyandinterestrateswaps,cashflowhedges 23.7 - 23.7 -4.9
Total 185.4 213.8 -28.4 27.1
Non-currentportion:
FXforwardcontracts,cashflowhedges 31.3 84.5 -53.2 -1.1
Crosscurrencyandinterestrateswaps,cashflowhedges 23.7 - 23.7 -4.9
Non-current portion 55.0 84.5 -29.5 -6.0
Current portion 130.4 129.3 1.1 33.2
CrosscurrencyandinterestrateswapshedgetheUSPrivatePlacementcorporatebondfundedinFebruary2007.
Nominal values of derivative financial instruments
MEUR 31.12.2008 31.12.2007
FXforwardcontracts 3,617.5 2,610.0
Crosscurrencyandinterestrateswaps 225.7 225.7
Total 3,843.3 2,835.7
23CargotecCorporation’sFinancialStatementsReview2008Cargotec Corporation’s Financial Statements Review 2008
Acquisitions In2008CargotecmadeeightacquisitionsofwhichfourinHiab'sbusinessarea. InFebruary,inordertostrengthenitsR&Dcapabilities,Cargotecacquired60percentofIdeaDesigning&ConsultingS.r.l,Italy.Theaccountingofthisbusinesscombinationalsoincludestheminorityshare,whichincludesaredemptionobligation.TheacquisitionwasfinalisedinFebruary. InFebruary,HiabmadeanagreementtoacquiretheUK-basedDelEquipment(UK)LimitedandtheUS-basedUltronLiftCorp.ThesecompaniesmanufacturetailliftsinUKandUS.TheacquisitionswerefinalisedattheendofMarch.InFebruary,Hiabsignedalsoanagreementtoacquire70percentoftheoperationsofAustralianO’Leary’sMaterialHandlingServicesPtyLtd.,theleadingsupplieroftailliftsinWesternAustralia.TheacquisitionwasclosedinApril.AttheendofMarch,HiabconcludedanagreementtoacquirethemajorityoftheoperationsoftheSouthAfricanBowmanCranes(Pty)Limited.Thiscompanysupplies,installsandservicestruck-relatedloadhandlingequipment.TheacquisitionwasfinalisedinJune.InJune,HiabconcludedanagreementtoacquirethebusinessofZeproTailgate(1987)LimitedinNewZealand.Inadditiontotailliftsales,thebusinesscomprisesinstallation,repairs,maintenanceandsparepartssales.TheacquisitionwasclosedinJuly. InApril,MacGREGORsignedanagreementtoacquireUS-basedPlatformCraneService,Inc.TheacquisitionwasclosedinMay. KalmaracquiredArgentineanEquiposyServiciosTerminalesyPuertosSRL.Inadditiontonewequipmentdistributionthecompanyprovidesequipmentcommissioning,technicalandsparepartsupportaswellasequipmentrepairingandrefurbishinginSouthAmerica.InOctoberKalmaracquired80percentoftwoItalianservicecompanies,CVSTechnoportsS.r.l.andCVSServiceS.r.l. Managementestimatesthattheconsolidatedsalesfortheyear2008wouldhavebeenEUR3,426million,iftheacquisitionshadbeencompletedonJan1,2008. Thetablebelowsummarisestheacquisitionscompletedin2008.ThebusinesscombinationsofEquiposyServiciosTerminalesyPuertosSRL,CVSTechnoportsS.r.l.andCVSServiceS.r.l.wereaccountedaspreliminaryasthedeterminationoffairvaluestobeassignedtotheassets,
liabilitiesandcontingentliabilitieswasyetnotfinalised.
Net fair values of identifiable assets and
liabilities of the acquired businesses
Assets and liabilities immediately
before the business combination
MEUR
Otherintangibleassets 4.3 0.0
Property,plantandequipment 3.5 3.3
Inventories 12.9 12.7
Non-interest-bearingassets 14.3 14.3
Interest-bearingassetsandCashandcash
equivalents 0.9 0.9
Interest-bearingliabilities -6.3 -6.3
Othernon-interest-bearingliabilities -21.7 -19.9
Acquired net assets 7.8 5.0
Transactionprice 52.0
Costsrelatedtoacquisitions 2.6
Goodwill 46.8
Transactionpricepaidincash 45.7
Costsrelatedtoacquisitions 2.4
Cashandcashequivalentsinacquired
businesses -0.9
Total cash outflow from acquisitions 47.2
ThebusinesscombinationsofHydramarineAS,InditalConstructionMachineryLtd,BayEquipmentRepairsIncandBaltiESwereaccountedaspreliminaryattheendof2007,asthedeterminationoffairvalueswasstillunfinished.Theaccountingoftheseacquisitionswasfinalisedin2008.Ithadnoimpactonthepreviousyear’sfigures.
24 Cargotec Corporation’s Financial Statements Review 2008 Cargotec Corporation’s Financial Statements Review 2008
Accounting Principles
TheinterimreporthasbeenpreparedaccordingtotheInternationalAccountingStandard34:InterimFinancialReporting.
Theaccountingpoliciesadoptedareconsistentwiththoseoftheannualfinancialstatementsof2008.Allfigurespresentedhavebeenrounded
andconsequentlythesumofindividualfiguresmaydeviatefromthepresentedsumfigure.
Adoption of new interpretation starting in January 1, 2008
StartingfromJanuary1,2008CargotechasadoptedthefollowingnewinterpretationbytheIASBpublishedin2007:
-IFRIC14,IAS19-TheLimitonaDefinedBenefitAsset,MinimumFundingRequirementsandtheirinteraction.
Theadoptionoftheinterpretationdoesnothaveamaterialeffectontheinterimfinancialstatements.
Inaddition,Cargotechastheappliedthechangestostandards“IAS39FinancialInstruments:RecognitionandMeasurement”and“IFRS7Finan-
cialInstruments:Disclosures”,knownas“ReclassificationofFinancialAssets”,giveninOctober2008.Theamendmentshavenomaterialimpact
on2008financialstatements,asCargotechadnosuchassetswhosereclassificationmanagementestimatedtobenecessary.
Calculation of key figures
Totalequityattributabletotheshareholdersoftheparentcompany
Equity/share = __________________________________________________________________
Shareissueadjustednumberofsharesattheendofperiod(excluding
treasuryshares)
Interest-bearingnetdebt = Interest-bearingdebt*-interest-bearingassets
Totalequity
Totalequity/totalassets(%) = 100x __________________________________________________________________
Totalassets-advancesreceived
Interest-bearingdebt*-interest-bearingassets
Gearing(%) = 100x __________________________________________________________________
Totalequity
Netincomeforperiod
Returnonequity(%) = 100x __________________________________________________________________
Totalequity(averageforperiod)
Incomebeforetaxes+interestandotherfinancingexpenses
Returnoncapitalemployed(%) = 100x __________________________________________________________________
Totalassets-non-interest-bearingdebt(averageforperiod)
Netincomefortheperiodattributabletotheshareholdersoftheparent
company
Basicearnings/share = __________________________________________________________________
Shareissueadjustedweightedaveragenumberofsharesduringtheperiod
(excludingtreasuryshares)
*IncludingcrosscurrencyhedgingoftheUSD300millionPrivatePlacementcorporatebonds.
25CargotecCorporation’sFinancialStatementsReview2008Cargotec Corporation’s Financial Statements Review 2008
Quarterly Figures
Cargotec Q4/2008 Q3/2008 Q2/2008 Q1/2008 Q4/2007
Ordersreceived MEUR 633 967 1,013 1,155 1,214
Orderbook MEUR 3,054 3,486 3,360 3,287 2,865
Sales MEUR 924 848 901 727 868
Operatingprofit MEUR 35.9 * 49.6 63.1 44.2 64.3 **
Operatingprofit % 3.9 * 5.8 7.0 6.1 7.4 **
Basicearnings/share EUR 0.14 0.66 0.61 0.50 0.45
Hiab Q4/2008 Q3/2008 Q2/2008 Q1/2008 Q4/2007
Ordersreceived MEUR 157 194 238 228 254
Orderbook MEUR 164 229 238 253 260
Sales MEUR 216 209 253 230 244
Operatingprofit MEUR 3.7 * 9.5 18.5 17.7 19.1
Operatingprofit % 1.7 * 4.5 7.3 7.7 7.8
Kalmar Q4/2008 Q3/2008 Q2/2008 Q1/2008 Q4/2007
Ordersreceived MEUR 348 365 363 490 346
Orderbook MEUR 704 778 790 824 660
Sales MEUR 413 386 396 322 364
Operatingprofit MEUR 12.1 * 25.8 32.3 19.4 26.9 **
Operatingprofit % 2.9 * 6.7 8.2 6.0 7.4 **
MacGREGOR Q4/2008 Q3/2008 Q2/2008 Q1/2008 Q4/2007
Ordersreceived MEUR 129 411 415 439 616
Orderbook MEUR 2,187 2,480 2,334 2,211 1,946
Sales MEUR 298 256 254 177 261
Operatingprofit MEUR 30.7 19.1 21.9 11.9 22.3
Operatingprofit % 10.3 7.5 8.6 6.7 8.6
*ExcludingrestructuringcostsofwhichbusinesssegmentHiabaccountedforEUR14.1million,KalmarforEUR4.5millionandCorporate
administrationforEUR0.3million.
**Excludingtheone-offcostofEUR18.0millioninKalmarbusinessarearelatedtoacontainerspreaderinspectionandrepairprogramme