Hiab Oyj Unsp/Adr

Welcome to Cargotex third quarter results call. The quarter was the seventh consecutive quarter with good results. My name is Aki Vesikallio. I'm from Cargotex Investor Relations. Today's results will be presented by Cargotex CEO, Kasimir Lindholm, Cargotex and HIEB CFO, Mikko Puolakka, and HIEB's President, Scott Phillips. After the presentations, there will be a Q&A session. Please also 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. And welcome also from my behalf to this webcast. We're looking at a really good Q3 from a cargo tech perspective. And again, like Aki mentioned, seven quarters in a row with good and stable results. Orders received increased in both businesses. We'll come back to that a bit later. And we had a really strong operative performance, strong profitability, and I would say exceptionally strong cash flow in the businesses. The sales process of McGregor is progressing according to plan. We'll come back to that a bit later as well. And then we specified the outlook for Hayeb and McGregor for the full year. So orders received increased in both businesses. partly driven by postponements from the second quarter. Scott will come back to that a bit later. But all in all, 14% up year on year, and 16% in Hayeb and 12% in McGregor. So all in all, we are very pleased with the performance regarding orders in the third quarter. Looking at where we are from an order book perspective, strong quarters now, several of them in MacGregor. The order book has increased. We're above a billion in order book in MacGregor, so strong starting point towards not only 25, but also 26 and onwards. In high-yield, the order book has normalized. We are on a level where we used to be pre-COVID, and we have a roughly five months order backlog going into the fourth quarter and then gradually into 2025. The sales going in different directions here in the businesses. Of course, McGregor, now you can see the strong order intake also being shown on the sales side and in a similar fashion, high trending a bit downwards. And again, we are coming towards the normalized levels. And as we have referred to previously, the 370 million euro mark regarding orders is what we have seen now since Q4 2022 in Haaya, but now we can see that sales is also starting to stabilize in that area. Eco-portfolio, no dramatic changes here either, on a quite stable level also in Q3 2024. Comparable operating profit on a very good level. Q3 normally is a bit softer compared to the other quarters. We are in holiday season, both in Europe and in the US. But despite that strong performance by Hayab, above 15% operating profit, and also MacGregor showing a strong Q3, despite that we still have some loss making projects in offshore, but service and merchant performing on a really, really good level. And that means all in all, Cargotech on almost 12% comparable operating profit for the quarter. So we are really happy and pleased with the performance overall. Regarding the transition of Cargotech, we are progressing according to plan. So when we announced the demerger and the separation of Kalmar on 27th of April in 2023, From that day it took us 14 months to list Kalmar and all in all 16 months to separate Kalmar totally from Cargotec. So this is work done according to the plan. we had almost a year and a half ago. So really happy with the performance of our both internal and external people that have done a tremendous job in separating Kalmar. Only a few TSAs left towards the end of the year. And at the same time, partly the same team started the preparations of the carve out of McGregor already in the spring. And that work is also progressing according to plan. So internally, a lot of good work done in both these areas. Then regarding the McGregor sales process, we have had some positive developments during October and we're targeting the signing of the deal by year end 2024. And of course, we'll come back in this area as soon as we have something to communicate. The cover preparations here again proceeding according to plan. And we started that project internally early in the spring. Then regarding the valuation of McGregor as such, there is roughly a percentage of fixed cost increase when we are moving towards a standalone McGregor, the way we see it now. We are strengthening the organization in the areas of, for example, treasury and IT. So there will be an increase of roughly 1% when we look at the standalone McGregor, and then that's not the listed version of of McGregor, so maybe good to note. And with that introduction, I'll give the word and the floor to Scott Phillips, who will present the Q3 report for HIEB and then onwards Mikko Puolak for McGregor and for the Cargotec Group. The floor is yours, Scott.

Thank you, Casimir. All right, I'm having trouble here with the remote, so let's see if I can get that in order. So hey, good morning, everyone, and welcome to the HIAB portion of today's earnings report. The quarter's strong profitability was a reflection of the high-quality execution of our plans by the entire HIAB team. So really proud of the job the team has done year to date and in the quarter. Three key points to note. Our demand remained on a stable level for the eighth quarter in a row. I will provide a bit more context in the next slide. And Casimir, I think, teed that up quite nicely earlier in terms of how to think about the quarter. We had excellent cash conversion of 160% in the quarter, and we continue to innovate industry-leading solutions, which I will highlight four on the last slide. So going into the order intake, it was €361 million for the quarter. representing a 16% increase versus prior year and pushed our year-to-date order intake to a level slightly above last year's first three quarters to 1.095 billion euros or 3% above prior year. Our order book is 636 million euros or 264 million lower than last year's level, which is a 29% decline. And as mentioned before, we are back to a level of about five months worth of coverage as a result of the order book, which is quite a normal level for us if you think about pre-COVID level. Our positive deviation can mostly be attributed to key orders that slipped into quarter three that we expected to convert in the previous quarters. So when adding the last two quarters order intake, we are well in line with our preceding quarters run rate. The right way to think about it is we're still on quite a stable level for the eighth quarter in a row. We saw a slightly larger increase versus a comparable period in the Americas as compared to Europe and on quite a stable level in Asia Pacific. Within Europe, Germany continues to be quite a challenging market for us from a European perspective. We are still seeing a continued increase in activity level, but at the same time, we see a longer and longer process that's undertaken by our customers to make decisions. The key driver for this continues to be the high level of financing costs combined with an expectation that they will be lower in the near future, so customers are still hesitant to make the purchase decisions. As a result, I'd say we're at a normalized level in our order book, and so therefore that'll characterize our level of revenues moving forward. So as a result of this situation, our revenues for the quarter were 8% below last year's level of 420 million euros. Year to date, our revenues are also 8% below 2023 levels. Service sales remained quite on a good level at 112 million euros versus 113 million in the comparable period from last year, but increased 200 basis points as a percent of our overall sales from 27, 29%. We were somewhat impacted by the container congestion in the US due to the port strike. So despite the reduction in revenues, we delivered a strong level of profit at 59 million euros or 15.3% in relative terms versus 62 million and 14.7% respectively during Q3 of 2023. The team continues to execute well on our sourcing and supply chain actions, as well as a bit of help from price realization as well. So the profit and the combination of the good level of profit and the decline in our networking capital enabled a strong cash flow. So overall, the results for the quarter were on quite a good level. So really pleased with that. And then moving into our last slide for the HIAB portion, really pleased to announce or highlight four of our innovations within the quarter, the first of which is an e-Ultima hook lift. This is the world's first plug-and-play hook lift designed specifically for electric trucks. Built with sustainability in mind, the multi-lift e-Ultima is designed to deliver exceptional performance and efficiency, which clearly sets the industry standard. It features a seamless integration by utilizing the truck's electric power takeoff for power, ensuring easy installation and optimal performance with energy efficient controls. And it's also made from Multilift Ultima Zero recycled fossil free emissions free steel. This therefore reduces the production of carbon emissions by 15% as well as the active emissions by 25%. And we did this in partner with our trusted steel supplier partners. The second innovation I'd like to highlight then is our IZ18R recycling crane. This is a new recycling crane in a critical space for us, which is equipped with our latest and greatest control systems, which enable improved productivity and safer operations. And the model signals an entry into the 18 to 19 ton meter market, offering a sturdy and resistant mechanical structure platform. So we think that the physics based outcomes that will be enabled by this crane will set a good standard for the industry. The third innovation I'd like to highlight is our IQ708 High Pro Crane. This offers a design that balances weight, lifting performance, and dimensions that contribute to increased safety, valuable payload increase, and expanding the range of truck installation options for customers. The improved performance and an optimized frame regarding dimensions and weight allows for smoother operation and more productivity for our customers. It's also equipped with our latest control systems, which enable an increase in productivity and safer operations. Then finally, I'd like to highlight the Talon, which is a versatile system designed with a focus on interoperability. It's capable of loading, unloading, and securely locking various in-service payload modules for transportation. The system combines the functionality of in-service products with the latest advancements in automation and technology and offers a significant reduction in the cycle time of the overall duty cycle of this particular load handling solution system. So really proud of the innovations that we've released to the market in the quarter and proud of the work that the team has done in delivering excellent results within the quarter. So with that, I'd like to turn it over to Mikko. We will guide you through the rest of the presentation.