Hiab Oyj Unsp/Adr

Welcome to Cargotex second quarter 2023 results call. My name is Laki Vesikallio. I'm from Cargotex IR. Today's results will be presented by our CEO, Kasimir Lindholm, CFO, Mikko Puolakka, Kalma's president, Michel Van Roosendaal, and HIEF's president, Scott Phillips. The presentation will be followed by a Q&A session. And please pay attention to the disclaimer in the presentation, as we will be making forward-looking statements. With that, over to you, Kasimir.

Thank you, Aki. So before going to the second quarter results, a few words around the planned separation of Kalmar and Hayab. The work is progressing according to plan. All streams are up and running. And as example of that preparation, we have recruited Sakari Aadikkivi as CFO of Kalmar. Sakari joined us on the 1st of July, just as an example of how we are preparing for what to come. Then to the second quarter, all in all a strong quarter for Gargotech, record high comparable operating profit. We have orders that are below the previous quarter and comparable quarter. I'll come back to that a bit later. Sales increased by 25%, and there are some circumstances there that we will explain in more detail. That was a bit higher than we even anticipated. And then really happy to see the comparable operating profit clearly improving in all three business areas, and particularly strong development in McGregor compared to last year's second quarter. So orders are back on pre-COVID level, and we can see that in 2021 and 2022, of course, we had extremely strong orders. We are back in a more normalized world in that sense, looking at the historical development over the last five years. That said, we are still on a clearly above historical average regarding the order book. And that is, of course, a strong message for the end of the second half of 23 and give us a good look at 24 as well. We will, of course, take actions as we announced in the Capital Markets Day in November. Last year, we are looking at actions to protect our margins and stay above the 10% margin, even if we see some challenges in the market compared to the strong 21 and 22 order intake that we had. The sales developed, as mentioned before, even a bit stronger than we anticipated. One part of it is that we have semi-finished goods that we were able to deliver. We got maybe a bit more components to those than anticipated, and that improved the sales even above our expectations. And that, of course, then had an impact and a positive impact on the operating profit as well. Again, here all three business areas contributing in a very positive way to the operating profit. Service orders, and this is of course strategically a very important area for us, continue to grow. This is a part where we invest also going forward to make sure that we are improving on the service part, both regarding orders and profitability. And again here, all three business areas performed on a very good level. The eco-portfolio is key for us going forward as well. We'll invest in R&D to make sure that we are also in the future strong in the eco-portfolio. We continue to grow eco-portfolio sales by 26%, and again, an area where we'll invest more in the future. Where, of course, one example is electrification within Kalmar that is key for us going forward. With that, I will leave over the word to Michel. Michel will go through the results for Kalmar.

Thank you, Casimir. Thank you. And good morning. Good afternoon. My name is Michel van Roosendaal, president of Kalmar. And also from my side, a warm welcome to Zachary, who's going to strengthen the team of Kalmar. I'm really a happy president here to be Reporting to you a record comparable operating profit in Calmar. Last quarter, we had the highest percentage. Now we have the highest comparable operating profit in absolute euros. The margin expansion is driven in essence, and we come back to that in a bit more detail, by the higher deliveries. but also our commitment to decarbonization, helping our customers on their journey to make cargo handling, heavy load handling more sustainable, was basically underpinned by two main events. We introduced the fully electric Stato carrier at an event in Rotterdam in the Netherlands, and also we see growing orders for our electric portfolio. So we are basically living up to our commitment towards decarbonization. We did see, however, indeed some softening in demand. Orders are, in essence, back to pre-COVID level. Let me dive into a bit more detail here. As said, we see some slowness, and that's mainly because, in essence, in the larger project side, people are taking a little bit more time to define their orders. Service orders are, however, stable, which is good. That basically is a commitment to our relationship with our end customer and the fact that our total fleet is being maintained and really people are relying on Kalmar for doing that. In the comparison period, you'll see a bit of a difference between Q2 of last year. We had a very significant large order, which basically explains the essence of the change there. But we, of course, we like large orders. And again, the order book remains above historical average, both in units and in value. So we see some softening, but at the same time, it brings us back to a more normal pre-COVID situation. If I then talk about the sales side, we see a robust execution of both the equipment and the service delivery. I come back to talk about that because execution is really a focus area for us, for Calmar. Really, we like to sort of execute like clockwork and we see that happening there. We see an improved efficiency in supply chain management, basically testimony of the point I just made. But it is true that volatility remains. We still see some challenges with our supply chain with certain components that makes our job a little bit more difficult because every now and then we are surprised by yet another supplier who has shortages, which makes our life a bit more difficult. But stronger execution has resulted in decreased lead times. And that is also seen by our customers. They now can see that lead times are back to a normal situation. And that also means that they need to no longer order with the view that deliveries are coming in more than a year time. So that in part also explains, I guess, some of the softening of the order there. And then service, again, we are executing very, very, very strongly on the service side, and our service capture rate is growing, and it's driving continued growth in service sales. We're getting a bigger part of the pie from a service perspective, and we're pleased with that. If I move on to the real, I should say, proud result we have, margin expansion is driven to a large extent by higher deliveries. But we're pleased that we have that and we have that ability. We are levering up quite nicely and that has led to this very very strong level of operating profit margin is supported by this deliveries of these semi finished goods which were waiting basically on the yards because one or two parts were missing and when these parts were coming it was easier to deliver those but still we see that our Factories, our supply chain, our teams have worked hard to make that happen and have learned to be agile in this very volatile environment. And we're pleased that we are able to deliver those units to our customers who are in need of those units because they rely on that to keep global supply chains going and to have their industrial operations moving on based and working with Calmar equipment. Successful management of inflationary pressure of component availability is important. What also means that we are able to sort of like translate that into a price level to our customers and see our customers also accept those price levels that are a reflection of the inflation, which is real both in commodities like steel as well as in components which have also a large labor component and we all know that labor has come of course with wage inflation everywhere so that we are able to manage in a good way and then last but not least as you might remember you will remember we have discontinued stopped our heavy crane business and also the losses as a result of that as we are limiting the execution of that leftover portfolio they have once more being reduced So in that sense, a solid quarter, not entirely unhappy to use a Finnish expression. And with that note, I am happy to hand over to Scott Phillips.