Cargotec's tumultuous 2009 concludes on positive note

By Euan Youdale03 February 2010

Cargotec saw sales drop 24% during its 2009 financial year, which was marked by job cuts, factory reorganisation and company restructuring.

Sales stood at €2.6 billion (US$3.6 billion) for the group, compared to €3.4 billion ($4.8 billion) in 2008.

The fourth quarter ended on a more posiitve note, however, with operating profit, excluding restructuring costs, standing at €31.7 million ($44.2 million), compared to €35.9 million ($50 million) in 2008. This represented 4.7 % of sales, up from 3.9 % in the same quarter the previoue year. Sales were €669 ($933 million), up from €924 million ($1.3 billion), in the last quarter.

Breaking down the results divisionally, Hiab's sales in 2009 totalled €568 million ($795 million), a 37 % decrease on the previous year. Sales were on a low level all year, reflecting the general weakness in the load handling equipment market, said Hiab. Fourth quarter sales were €152 million ($213 million), compared to €216 million ($302 million) in 2008.

Kalmar's sales in 2009 totalled €1.0 billion ($1.4 billion) compared to €1.5 billion ($2.1 billion) in 2008, marking a 34% decline. Fourth quarter sales were €213 million ($298 million), compared to €413 million in 2010 ($578 million).

In contrast MacGregor's sales were €1.0 billion ($1.4 billion), compared to €985 million ($1.4 billion) in 2008, showing a 2% increase. This growth was the result of a strong order intake in previous years and successful project deliveries, said Cargotec. Fourth quarter sales were €305 million ($427 million), up from €298 million ($417 million) the previous year.

Across the group, orders received during the period totalled €1.8 billion ($2.6 billion) down from €3.8 billion ($5.3 billion) in the previous year. The order book was €2.1 billion ($3 billion) at the end of the financial period, amounting to a 30% decline.

Operating profit, excluding restructuring costs, was €61.3 million ($85.8 million), compared to €192.8 million ($269.7 million), representing 2.4 % of sales. Overall operating profit was €300,000 ($420,000) including €61.1 million ($85.3 million) in restructuring costs.

During the year, Cargotec merged Hiab and Kalmar to create a new business area, Industrial and Terminal. It began operating at the beginning of October, although financial reporting continued as before until the end of 2009.

A range of restructuring strategies saw Cargotec's personnel drop by 2,220 from the end of 2008, to 9,606 by the end of 2009. This was mostly felt in Sweden and Cargotec's home nation Finland.

Despite the downturn, Cargotec made the decision to proceed with a new multi-assembly unit (MAU) in Stargard Szczecinski, northern Poland, aimed at improving its global supply capabilities. Production began in rented premises at the end of the third quarter of 2009 and will be relocated to Cargotec's own premises in the country during the second quarter of 2010. This investment cost €19.1 million ($26.7 million) in 2009.

"There were many positives in 2009 despite the difficult market situation. Thanks to successful deliveries of marine cargo handling equipment we achieved an excellent result in Marine business. Our cash flow strengthened throughout the year. I am satisfied with the €32 million underlying operating profit we reached in the fourth quarter. With restructuring costs remaining smaller than anticipated in the same period, our full year operating profit turned positive," said Mikael Mäkinen, Cargotec president and CEO.

Cargotec's 2010 sales are forecast to remain at 2009 levels, while operating profit is expected to exceed €100 million.

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