Release Date: August 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Cargotec Oyj (CYJBY, Financial) achieved its sixth consecutive quarter of good results.
- The company completed a significant merger, marking a historical milestone.
- Hiab's strong profitability continued, and MacGregor saw a record quarter.
- Order books for MacGregor increased, reflecting strong demand.
- Cargotec Oyj (CYJBY) has a very strong balance sheet with a net debt of only EUR18 million and a 22% gearing, the best in its history.
Negative Points
- Hiab experienced a 7% decline in order intake due to delayed decision-making by customers.
- Hiab's sales decreased by 11% compared to the same period last year.
- MacGregor's offshore business still made a EUR44 million loss, although smaller than the previous period.
- Hiab's order book is 33% lower compared to the same period last year.
- There are uncertainties in MacGregor's second-half profitability due to the timing of merchant equipment deliveries.
Q & A Highlights
Q: Could you comment on the delivery times and backlog rotation for Hiab in the second half?
A: We are getting back to more normal levels in terms of delivery times, both from truck OEMs and our side. There are still some fluctuations in different geographies, but overall, it's converging nicely.
Q: Regarding the full-year guidance for Hiab's margin at 13.5%, what are the uncertainties that could affect this?
A: We are relying on the conversion of orders within the year, which introduces some uncertainty. Additionally, we are planning for an efficiency improvement program, which may incur one-off costs.
Q: How did the US market perform in the second quarter, and what are the underlying demand conditions?
A: Underlying demand conditions remain stable compared to 2022. However, we see delayed decision-making and a slight downtick in the utilization of loader cranes. These factors are being closely monitored.
Q: What is your view on pricing for Hiab in the second half of the year?
A: We still target a net positive price change year-over-year. We have adjusted market pricing in line with last year's discount levels, and we see this stabilizing for the second half of the year.
Q: Are the new cost-cutting measures in Hiab aimed at achieving short-term or long-term targets?
A: Both. Actions above gross profit are aimed at long-term improvements, while adjustments in fixed costs are more about short-term alignment with order intake.
Q: What are the expectations for returns and optimal gearing for Cargotec going forward?
A: It's too early to discuss extra dividends or share buybacks. We have ambitious M&A objectives for Hiab, and the Board of Directors will evaluate the need to change return policies after the MacGregor sale.
Q: Did Hiab experience any raw material cost tailwinds in Q2, and how do you expect this to develop?
A: There was a slight sequential improvement in raw material costs, but no significant tailwind as we are still converting backlog.
Q: What are the uncertainties for MacGregor in the second half, given the increased guidance?
A: The main uncertainties are related to the timing of merchant equipment deliveries, which depend on vessel construction schedules. We may revisit the guidance if we gain more visibility.
Q: Are the new cost-saving measures in Hiab a response to weaker-than-expected demand in Q2?
A: Yes, we are making adjustments based on the last 12 months' order intake and accelerating efforts to secure long-term cost improvements.
Q: Will the cost-saving measures in Hiab impact the manufacturing footprint?
A: We are evaluating all possibilities, including potential changes to the manufacturing footprint as part of our planning process.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
