Kalmar Oyj B

Good morning everyone and welcome to Kalmar's Q4 results webcast. My name is Kamilla Maikola and I'm from Kalmar's Investor Relations. Today's results will be presented by our President and CEO Sami Niiranen and CFO Sakari Ahdekivi. The presentation will be followed by a Q&A. Please pay attention to the disclaimer as we will be making forward-looking statements. And now over to you Sami.

Thank you very much, Camilla, and good morning, everyone. I'm pleased to share with you Kalmar's fourth quarter and full year 2024 results, which demonstrate solid financial performance driven by our focus on operational and commercial excellence. We managed to generate stable revenues and a resilient margin by successfully leveraging Kalmar's leading position in the market and driving excellence in our operations, even though we have faced slower market activity and a lower order book compared to previous year. We advanced our strategy towards sustainable growth and focused on building upon the strong foundation. We delivered a resilient profitability in both Q4 and the full year 2024, and the orders received reached a record high quarterly level in two years. The strong performance reflected the great achievements of the entire Kalmar team, and I want to thank everyone for their efforts. There is a lot to be proud of when looking back at our first year journey as an independently listed company. Demand has remained stable overall, with some fluctuations in different geographical markets and segments. And I will come back to this shortly. In addition, the board has proposed a dividend of one euro for each Class B share and 0.99 euro for each Class A share. We have also communicated our guidance for 2025, and Sakari will get back to this in his presentation. As mentioned, our orders received in the fourth quarter reached the highest quarterly volume in two years and were 486 million euros, which is a 20% increase compared to last year. The fourth quarter's orders received included relatively many large orders related to straddle carriers, and the timing of large orders can affect fluctuations on quarter-to-quarter level. Demand in ports and terminals remained good globally, While dealer stock levels in the US have come down and the situation is gradually improving, demand has still remained subdued in the distribution customer segment, and we don't foresee any short-term significant improvement. Europe remains our largest region in terms of orders, representing 42% of our fourth quarter's order intake. And our order book remains at the healthy level, and we are confident in our ability to reach our long-term targets. So then moving on to our sales performance. As you can see here, our sales in the fourth quarter were 440 million euros, and the sales have been on a stable level throughout the year 2024. Europe was clearly the largest region, representing 44% of the sales. We have a well diversified business with four strong customer segments. Our services share of sales was 33% in 2024, and our eco-portfolio share of sales remained high at 41% for the full year, showing the continued strong interest in hybrid and electric solutions among our customers. We have a strong footprint in our three main markets, which are Europe, the Americas and EMEA. As visible on this page, we have a leading sales and service network in our industry, with sales in over 120 countries. Today, we have over 1,400 owned service technicians around the globe and four factories, which are located in Poland, the US, China, and Malaysia. We also have a strong dealer network, and in 2024, approximately 34% of our sales came via dealers. Let's then take a look at the overall market environment. Market indicators are showing modest growth overall. However, there are uncertainties related to tariffs in the US, inflation and geopolitics. The global container throughput has grown more than expected in Q4 and is expected to grow by 2.8% in 2025. Indicators for GDP, manufacturing and retail and wholesale are estimated to grow by with roughly 3% this year. And if you then take a closer look at our large base of over 14,500 connected equipment around the world. By following the running hours of these equipment, we get a good view of the activity and demand in different regions. Year on year, we see mostly positive or neutral activity development in our main markets, Europe and the US, reflecting the stable demand picture overall. The quarter on quarter developments from Q3 to Q4 are affected by relatively many bank holidays in Q4, such as Christmas and Thanksgiving, which is visible especially in the US numbers. The ECO portfolio share of total sales has remained high and was 41% in the full year 2024 compared to 35% in 2023, which is demonstrating our customers strong interest towards electrical and hybrid solutions as well as sustainable service solutions. The fully electric machine share of equipment orders were 9% in 2024. We see significant potential for electric equipment, but the order growth has been sluggish towards the end of the year. Last year, 2024, was a year of sustainable innovations with many launches related to electrification. We introduced a new range of electric empty container handlers, which are designed to minimize energy losses and optimize energy accumulation, We also started a pilot project of the electric reed stacker at APM Terminal Suez Canal Container Terminal with the goal of advancing the electrification of terminal operations across the industry. Additionally, we unveiled our new Kalmar Ottava T2 electric terminal tractor, which is now available for sales. In 2024, we also decided to expand our innovation center in Ljungby, Sweden. by building a world-class test center, and we announced our partnership with Elon Road to build a 200-meter electric road at our Jungby Innovation Center to pilot dynamic charging of electric vehicles. Additionally, we introduced our new Kalmar 2.0 digital platform for Kalmar equipment owners, and we have implemented a wide-scale installation of our Kalmar collision warning system on straddle carriers of key customers. Worth mentioning also that in 2024, our total R&D spend was 3.1% of our total sales. So to summarize, both our equipment and services segments performed well in 2024. Demand has remained stable in both segments for almost two years now, and profitability in both segments was at the good level in 2024. 12.9% in equipment and 17.5% in services. And we are fully committed to our performance targets for 2028, which include a 5% sales growth per annum over the cycle and a 15% comparable operating profit margin. So thank you all for now. And next I will hand over to my colleague Sakari.

Thank you Sami, and good morning to everyone also from my side. So, I am pleased to report to you that our financial profile has remained strong, which gives us excellent possibilities to target growth as we move forward. Our order book is at a healthy level of 955 million euros. If we think about the orders received during 2024, it continued on a stable level around 400 million euros per quarter for the first three quarters, with then a strong uptick in Q4 as several larger orders reached decision points and we were successful in winning those orders. Our business performance has been successful and we are pleased to deliver a 12.6% comparable operating profit margin. This is up slightly from the 12.4% in 2023 and this is despite 16% lower sales. Our leverage is low at 0.3 times, and our cash conversion has been strong at 104%, and this is defined as the operating cash flow before finance and taxes compared to EBITDA. Our equipment demand has remained sequentially stable for almost two years, and this is still the case for the underlying demand. However, the equipment division ended the year on a very strong note in terms of orders, with relatively many large orders won in Q4, as I said before. Equipment segments profitability remained at a good level. However, the product mix and volume have had some impact in the fourth quarter. The profitability has remained very good despite the lower sales and this is thanks to successful commercial performance both on the sales side as well as on our sourcing side. Services fourth quarter was also very good. The order book orders received and sales all reached the highest quarterly levels in the last two years. Service sales have remained stable level with previous year, which is providing resilience both in terms of sales and profitability. We are strongly focused on growing our service business and have already made significant progress in 2024 through new partnerships and investments into sustainable growth. And of course, in Q4, we saw a very nice order intake growth of 15%. The service segment's profitability has also improved significantly if you compare the fourth quarter with the same period in the previous year. We reached 17.5% compared to 14.6% in the previous year. Here it has to be said, though, that there were a few one-off restructuring costs in Q4 and 23, which a little bit skews the comparison. Services profitability for the full year was also 17.5%, which is a good level, but we do see room for further improvement in services. We have been able to perform well despite the lower sales volumes, mainly thanks to improved business performance, including sales mix, price management, and direct cost improvements on our sourcing. as well as a cost structure in the fixed cost, which we adapted already earlier to the anticipated lower sales volumes. If we look at the operating profit, this included 42 million euros of items affecting comparability, of which 32 million were related to the demerger and listing process, and the rest of the around 11 million euros were related to the Lone Star write-off. The total costs related to the demerger and listing recorded during the years 23 and 24 totaled 45 million euros. No further costs related to this are expected as we move forward. And as I said, we continue to invest in improved profitability and driving excellence in line with our long-term targets. The return on capital employed in the fourth quarter over the full year was 18.7%. This is slightly down from previous levels, but it is worth noticing that this includes items affecting comparability, which I explained previously. And these had an impact on the ROSI of about 4.1 percentage points. So excluding the IACs, we would have been at a ROSI of close to 23%. As a result of our continued good cash generation, our leverage is strong at 0.3 times and our gearing stands at 12%. Our loan maturity profile shows the major maturities in 2026 and 2027, but no major financing due in the year 2025. Cash flow remained strong, resulting mainly from the profit generation, but was further supported by reduction in net working capital through lower inventory levels. If we look a little bit further back in the first half of 2023, our cash flow was burdened by exceptionally high increases in inventories and other working capital items, followed then by very strong cash generation in the second half of 2023 and throughout 2024. And as said, our cash conversion rate was 104% in 2024. The Board of Directors proposes to the Annual General Meeting that of the distributable profit, a dividend of 99 euro cents for the Class A share and one euro for the Class B share to be paid for the financial year 2024. In total, this equals to 64 million euros. And the effective dividend yield is therefore 3.1%. This is in line with Carmar's dividend policy of 30% to 50% payout ratio. And then finally, we announced our guidance for the year 2025. We expect our comparable operating profit margin to be above 12% in the year 2025. And this is in line with our long-term target of reaching 15% margin in comparable operating profit by 2028. Thank you all. And now I hand over to Camilla.