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Cargotec Details Plans to Spin Off Kalmar
[ February 8, 2024 // Gary G Burrows ]Cargotec’s Board of Directors have approved a demerger plan, announced in April 2023, for all assets, debts and liabilities related to the Kalmar business.
Cargotec’s board said separating the entities “could unlock shareholder value by allowing both businesses to pursue sustainable profitable growth opportunities independently.”
Kalmar is a provider of container handling and heavy logistics services “with strong market positions, geared to grow by making the industry electrified and more sustainable,” Cargotec said in a release.
A new company, named Kalmar Corp., would be incorporated, and Cargotec has applied to admit Kalmar to trade on Nasdaq Helsinki Corp. The demerger is subject to approval at the annual general meeting to be held May 30, with the merger to be completed June 30.
Cargotec said while the Hiab business area of the company, which provides on-road load handling, would remain with the current company, MacGregor, currently one of Cargotec’s three business areas, will not be a part of the portfolio in the future. Cargotec said it continues to look for a solution for MacGregor during 2024.
Cargotec said the demerger would improve Kalmar’s and Hiab’s performance “through higher agility, decisiveness and stronger management focus” … to “achieve faster organic and inorganic growth thanks to a more tailored capital allocation strategy and flexible access to external capital.”
Year-end Results
Cargotec reported a record year in sales and profitability for 2023.
Sales for the year increased 12 percent to US$4.09 billion, while service and eco portfolio sales recorded record high levels. Comparable operating profit rose 62 percent to US$316 million, representing 7.7 percent of sales.
Cargotec said results were impacted by “geopolitical tensions, high interest rates and low consumer confidence.” Orders received fell 18 percent from 2022, to US$1.19 billion. The company addressed lower order intake with cost-saving actions announced in October 2023, which will reach US$54 million of cost savings in 2024.
In the fourth quarter, demand for solutions stabilized and improved 11 percent from the third quarter. Sales fell 4 percent to US$1.24 billion, while comparable operating profit jumped 62 percent to US$84.8 million. Cargotec removed about 300 roles globally in the fourth quarter.
Kalmar’s fourth quarter was a strong finish for a record year, Cargotec said, with demand stabilizing and orders received improved from the third quarter. However orders received were down 26 percent from the year earlier period to US$435 million, while sales fell 18 percent to US$546.7 million. Kalmar’s comparable operating profit in the fourth quarter was US$72 million, representing 13.1 percent of Kalmar’s sales. One-off costs related to cost saving actions announced in October had a US$5.4 million negative impact.
Management
Sami Niiranen was appointed president of Kalmar on Nov. 9, 2023, and proposed as new CEO of the standalone company. Cargotec has also said that new management would be installed effective April 1:
Completion of the Demerger is subject to approval at the general meeting, and registration with the Finnish Trade Register.
• Niiranen, president and proposed CEO.
• Sakari Ahdekivi, CFO.
• Carina Geber-Teir, head of investor relations and communications.
• Francois Guetat, head of integrated supply chain.
• Mathias Höglund, head of human resources (starting May 1.
• Tommi Pettersson, head of strategy, sustainability and technology.
• Marika Väkiparta, head of transformation office.
• Alf-Gunnar Karlgren, head of counterbalanced.
• Thor Brenden, head of terminal tractors.
• Arto Keskinen, head of horizontal Transportation.
• Shushu Zhang, head of Bromma.
• Thomas Malmborg, head of services.
• Head of legal and compliance will be selected later.
Also effective April 1, Cargotec’s leadership team will be:
• Casimir Lindholm, president and CEO.
• Mikko Puolakka, executive vice president, CFO.
• Mikko Pelkonen, senior vice president, human resources.
• Mikael Laine, senior vice president, strategy.
• Soili Mäkinen, senior vice president, sustainable business development.
• Outi Aaltonen, senior vice president, general counsel.
• Scott Phillips, president, Hiab.
• Niiranen, president, Kalmar (until the planned completion date of the demerger).
• Leif Byström, president, MacGregor.
Under the demerger, Cargotec shareholders will receive a 1:1 ratio: receive one new share of class A or class share of Kalmar for each class A and class B share owned by Cargotec.