January-September 2006 Interim Report President and CEO Mikael Mäkinen 1
Key issues in July-September 2006 Orders received totaled EUR 603 (Q3/05: 578) million Net sales grew 8% to EUR 625 (577) million Operating income from operations amounted to EUR 52.0 (41.6) million representing 8.3 (7.2)% of net sales Capital gain from sale of property of EUR 18 million raised the operating income for the quarter to EUR 69.9 million Appointments to the Executive Board strengthen resources in strategic priority areas 2
Market situation continued good Global economy and world trade continued to grow Container traffic volumes grew further Ship building at ship yards at a high level Demand for load handling equipment was brisk in Europe, while demand showed signs of leveling off in U.S. building materials supply Demand for services was healthy in all business areas 3
reflecting also in Cargotec s orders received Hiab Orders for loader cranes grew strongly Kalmar Demand for container handling equipment strong although straddle carrier market will not achieve the record levels of 2005 Market for heavy industrial forklift trucks healthy MacGREGOR Demand for hatch covers, ship cranes and lashing equipment was active Demand for cargo handling solutions for dry cargo vessels increased year on year 4
Following record first half-year Q3 orders received continued to show growth y-on-y MEUR 2,800 2,400 2,000 2,337 2,385 +22% 1,795 2,194 1,600 1,200 800 400 578 +4% 603 0 2004 Pro 2005 Pro 1-9/05 Pro 1-9/06 7-9/05 7-9/06 5
Order book continued to grow MEUR 1,800 1,500 1,200 900 1,345 1,287 1,173 1,219 1,123 897 807 600 300 0 6 *Pro 1,281 1,257 1,439 1,544 1,594 30.9.2006 31.12.05 31.3.06 30.6.2006 31.12.03* 31.3.04* 30.6.04* 30.9.04* 31.12.04* 31.3.05* 30.6.05 30.9.05
Net sales 2,800 MEUR 2,400 2,358 2,000 1,900 +9% 1,737 1,900 1,600 1,200 800 577 +8% 625 400 0 2004 Pro 2005 Pro 1-9/05 Pro 1-9/06 7-9/05 7-9/06 7
Geographical development of net sales MEUR EMEA Americas Asia Pacific 1,500 1,335 1,200 1,072 969 +2% 991 900 600 300 476 620 461 +20% 552 352 403 308 +16% 356 0 1-9 1-9 1-9 2004* 2005* 1-9/06 2004* 2005* 1-9/06 2004* 2005* 1-9/06 8 *Pro
Services showed 18% growth y-on-y and represent 22% of net sales MEUR Hiab Kalmar MacGREGOR % of net sales % 300 50 267 250 223 228 40 200 189 30 150 100 95 109 80 100 110 116 85 91 20 50 10 0 1-9 1-9 1-9 2004* 2005* 1-9/06 2004* 2005* 1-9/06 2004* 2005* 1-9/06 0 9 *Pro
Operating income MEUR 210 180 150 120 124 195 15 179 126 182 18 164 90 60 30 40 70 18 52 0 2004 Pro 2005 Pro 1-9/05 Pro 1-9/06 7-9/05 7-9/06 10 Capital gain from sale of property Capital gain from sale of Consolis
Operating income from operations by business area MEUR Hiab % 7-9/2006 7-9/2005 1-9/2006 2005* 2004* 17.4 8.4% 13.7 7.0% 63.3 9.4% 66.6 7.9% 44.6 6.4% Kalmar % 27.2 9.4% 24.7 8.5% 82.9 9.4% 97.6 8.5% 66.4 7.7% MacGREGOR % 10.0 7.9% 6.6 7.3% 26.5 7.7% 27.5 7.5% 20.9 6.2% Cargotec total % 52.0 8.3% 41.6 7.2% 163.7 8.6% 179.4 7.6% 123.9 6.5% *Pro 11
Earnings per share (basic) EUR 3.00 2.50 2.00 2.11 1.96 1.50 1.20 1.34 1.00 0.50 0.46 0.80 0.00 2004 Pro 2005 Pro 1-9/05 Pro 1-9/06 7-9/05 7-9/06 12
Cash flow from operations MEUR 240 210 180 150 158 194 179 120 90 60 111 95 66 30 0 2004 Pro 2005 Pro 1-9/05 Pro 1-9/06 7-9/05 7-9/06 13
Key figures 1-9/2006 2005* 2004* Earnings per share EUR 1.96 2.11 1.20 Equity per share EUR 13.27 11.93 10.17 Interest-bearing net debt MEUR 93.2 120.5 281.4 Total equity/total assets % 49.0 46.2 42.2 Gearing % 10.9 15.7 43.0 Return on equity % 20.8 19.2 12.6 Return on capital employed % 23.8 20.9 12.9 *Pro 14
Priorities in strategy implementation Cargotec s strategy is based on profitable growth in developing and consolidating markets. The aim is to grow the operations significantly both organically and through acquisitions. Within services the target is a leading position. Way of working will be changed in order to achieve better utilization of common know-how and benefits of scale in technology development and global network. Achievement of the growth target will require more investment in personnel development. 15
Cargotec s Executive Board President and CEO Mikael Mäkinen Hiab President Pekka Vartiainen Kalmar President Christer Granskog MacGREGOR President Olli Isotalo SVP Services Harald de Graaf (as of Nov 1) SEVP and CFO Kari Heinistö SVP Production and Sourcing Lauri Björklund SVP IR & Communications Eeva Mäkelä SVP Human Resources Kirsi Nuotto (as of Nov 20) SVP Operations Development Matti Sommarberg (as of Nov 1) 16
Acquisitions during January-September 2006 Tail lift manufacturer AMA in Poland 55 employees and 06 net sales approx. EUR 5 million Port service company ECC in U.S. East Coast and Gulf ports Over 100 employees and 06e net sales approx. EUR 25 million BMH Marine dry bulk handling equipment on ships and at port terminals 140 employees and 06e net sales approx. EUR 70 million Grampian Hydraulics service company for offshore support vessels 30 employees and 06e net sales approx. EUR 4 million Kalmar distributor and service provider ANE in South Africa 13 employees 17 Distribution and service company Catracom in Belgium* 100 employees and 05 net sales were EUR 70 million of which Kalmar equipment share EUR 26 million * Subject to competition authority approval
Outlook Cargotec s market situation is expected to continue good. Order intake for the fourth quarter is expected to improve from the third quarter level. As previously estimated Cargotec s year 2006 net sales are expected to exceed EUR 2.6 billion and operating margin from operations is expected to exceed 8 percent. 18