CARGOTEC CORPORATION, STOCK EXCHANGE RELEASE, 27 MAY 2024 AT 9:30 PM EEST
Cargotec publishes new long term financial targets for Hiab business area and information on planned management for standalone Hiab
Cargotec publishes new long term financial targets for its Hiab business area and information on planned management for Cargotec as a standalone Hiab company ahead of the capital markets day, which will be held on 28 May 2024 starting at 2:30 pm (EEST).
As announced earlier, Cargotec is carrying out a structure change where there would be three separate businesses emerging from the current Cargotec group. Kalmar is planned to be demerged to form a separate listed company as from 1 July 2024, and Cargotec is looking for a solution for MacGregor during 2024. If the planned actions are completed, current Cargotec would comprise of Hiab as a standalone business.
Cargotec announced in conjunction with its January-March 2024 interim report that due to the high certainty of standalone listing of its business area Kalmar by means of a partial demerger, the combined financial targets set in November 2022 for Kalmar and Hiab are no longer valid. Therefore, separate long term targets have been set for Hiab and Kalmar. Kalmar's new long term targets were published on 22 May 2024 when the Finnish Financial Supervisory Authority approved the prospectus concerning the proposed partial demerger of Cargotec and listing of Kalmar's class B shares.
Cargotec's Board of Directors has set the following financial targets for Hiab to measure success by 2028:
- Annual sales growth over seven percent over the cycle
- Comparable operating profit 18 percent (1
- Return on capital employed over 25 percent (2
1) as business area of Cargotec
2) as business area of Cargotec, defined as (Operating profit / Operative capital employed)
In addition to the Hiab-specific long term targets, Cargotec's climate target to reduce greenhouse gas emissions in all three emission scopes by at least 50 percent by 2030 compared to a 2019 baseline remains valid. The target is validated by the Science Based Targets initiative (SBTi). In its planned standalone future after the solution for MacGregor has been found, Cargotec (future Hiab) is planning to publish a new climate target and applying its validation from SBTi.
Cargotec also aims for a growing dividend of 30-50 percent of EPS and to keep gearing below 50 percent.
"Hiab has a strong track record of profitable growth. We aim to reach even higher with our new strategy, which our new targets demonstrate. We continue to shape the essential industries we serve with our innovative lifting and delivery solutions and increase customer's productivity, safety and sustainability. Setting our own financial targets is also a major milestone on our journey to become a standalone company," says Scott Phillips, President Hiab.
If the planned demerger of Kalmar is completed and a solution to MacGregor is found so that MacGregor would not thereafter be part of the Cargotec group, Cargotec's Board of Directors is planning to propose to Cargotec's General Meeting of shareholders that the company's name would be changed from Cargotec to Hiab. Should such actions be carried out as planned in the leadership of the current President and CEO of Cargotec, Casimir Lindholm has announced his intention to step down as President and CEO at such point. The Board of Directors would then appoint the President of the Hiab business Scott Phillips as the President and CEO of the renamed company being the current Cargotec. Cargotec currently estimates that these changes to transform into standalone Hiab could take place during 2025. Current Cargotec CFO Mikko Puolakka would continue as CFO of standalone Hiab.
More detailed information on the new financial targets will be provided at the Capital Markets Day which can be followed online at https://cargotec.videosync.fi/hiab-cmd-2024, starting at 2:30 pm.
For more information, please contact:
Mikko Puolakka, CFO, tel. +358 20 777 4105
Aki Vesikallio, Vice President, Investor Relations, tel. +358 40 729 1670
Cargotec
Forward-looking Statements
The release includes forward-looking statements, including expected performance targets, and are based on present plans, estimates, projections and expectations and are not guarantees of future performance. These forward-looking statements are subject to numerous risks, uncertainties and assumptions, including risks relating to Cargotec's industry, business, the risk that Cargotec's actual results of operations in future periods may differ materially from the performance targets discussed, or suggested, herein. These forward-looking statements reflect knowledge and information available at, and speak only as of, the date they are made, which, even though they seem to be reasonable at present, may turn out to be incorrect. Except as required by law, Cargotec undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date hereof or to reflect the occurrence of unanticipated events. Readers are cautioned not to place undue reliance on such forward-looking statements.
