Kalmar Oyj B

Good morning, everyone, and welcome to Kalmar's first quarter results webcast. My name is Karina Geberteir, and I'm heading the investor relations at Kalmar. Today's result will be presented by our president and CEO Sami Niiranen and CFO Sakari Ahdekivi. The presentation will be followed by a Q&A. And as always, please pay attention to the disclaimer. And now over to you, Sami.

Thank you very much, Karina, and good morning, everyone. I'm pleased to share with you Kalmar's first quarter's results, which demonstrate solid 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. We advanced our strategy towards sustainable growth and focused on building upon the strong foundation. Our orders received increased by 20% from last year, and overall demand was favorable in Q1. Despite lower sales, we delivered a resilient profitability of 12.0%, which was supported by the record high services profitability. We have continued our focus on growth and investments in sustainable innovations, and we are proud to announce the launch of a five-year Move to Green R&D program, including a 20 million euros funding from Business Finland. However, today there is an increased level of uncertainties in the market environment, affected by, for example, the recent tariff announcements and geopolitical tensions. As mentioned, our orders received in the first quarter increased by 20% compared to last year, and totaled 480 million euros, following the good development from the previous quarter. Demand in ports and terminals remained stable. We saw some early market recovery signals in the beginning of the quarter in the US distribution and customer segment. However, there is an increased level of uncertainties in the market environment today. Europe performed strongly and remains our largest region in terms of orders, representing 47% of our first quarter's order intake. Our order book was at the good level at the end of the quarter and 86 million euros higher than at the end of 2024. Then moving on to our sales performance. Our sales in the first quarter were 398 million euros. The lower sales levels we have seen are impacted by the lower orders in 2024. The services segment share of sales increased to 36% in Q1, which is providing resilience to our overall revenue. The softness in North America is visible in sales, and Europe was clearly the largest region, representing 45% of the sales. We have a well-diversified business with four strong customer segments. As mentioned, our services share of sales was 36% in Q1. A core portfolio share of sales increased to 43%, which is showing the strong interest towards our sustainable solutions. and we have a strong footprint in our three main markets, which are Europe, the Americas and EMEA. With an installed base of 68,000 machines globally and a strong presence in over 120 countries for sales and services, our extensive reach remains a significant asset. This robust foundation fuels our active acceleration of future service growth through innovative offerings and digital solutions. Today we have over 1400 own service technicians around the globe and four factories which are located in Poland, the US, China and Malaysia. Since January this year, they are all now decentralized and reporting directly to the divisions. The world today is different than a few months ago, with an increased level of uncertainties related to recent tariff announcements, geopolitical tensions and the risk of a global macroeconomic downturn. It's still too early to draw conclusions on how all this will affect our industry, the demand environment and global trade in the short term. But we will monitor the situation closely and have made different scenarios and are ready to act swiftly as needed. Despite uncertainties, we still see growth indications in the market indicators. The global GDP, global manufacturing and global retail output development are all expected to grow around 2-3% this year. But as late as yesterday, we received the latest container throughput development estimates from Drury, and the global container throughput is expected to decrease by 1% this year. Let's 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. We see positive development trend both year on year and quarter on quarter, which is indicating increased activity at our customer sites during the first quarter. However, at the same time, we have to remember that there are now more uncertainties in the market. The ECO portfolio share of total sales has remained high and increased to 43% and ECO portfolio share of order intake was 44% in Q1, 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 for the last 12 months was 11% and we continue to see significant potential for electric equipment. We have announced three orders from the quarter, including 32 straddle carriers to APM terminals in Morocco, six hybrid straddle carriers to fourth ports in the UK, and five reed stackers, including a Kalmar Complete Care Service Agreement to SSAB Ökselösund in Sweden. We are also happy to announce some actions towards sustainable growth. As I mentioned earlier, a five year move to green R&D program, including a 20 million euros funding from Business Finland, was launched during the first quarter. This program brings together over 150 ecosystem partners, including industrial organizations, technology companies, research institutions and universities. And the goal of this collaboration is to initiate and lead large scale research and development projects, increase R&D investments and to build solutions that enhance the efficiency in heavy material handling operations and support its transition to a low carbon future. We also started the sale of our third generation electric terminal tractor in North America. This terminal tractor is fully designed and built in house at our Kalmar's Ottawa facility. And our strong North American dealer network is trained and certified to support the new terminal tractor. Additionally, we will expand our global delivery capability by starting the production of electric empty container handler and heavy forklift truck at our Shanghai facility, which is showing our ability to meet our customer expectations globally. Both our equipment and services segments performed well in the first quarter. The equipment margin is impacted by the lower sales volume and the services profitability continued developing positively. The order book has strengthened in both segments. So on my last slide here, I would like to remind you about our performance targets 2028, which we are fully committed to. So thank you all for now. And next I will hand over to Sakari.

Thank you Sami and good morning to all of you also from my side. What I will be talking about is to start off as we usually do, just to recap on our financial profile and where we are with that. Then we'll dive a little bit deeper into the reporting segments. Then we will go through the balance sheet and cash flow highlights and then finish off with our guidance for the full year 2025. The financial profile, as you remember, is presented here in LTM figures. Our financial profile has remained strong, which gives us an excellent possibility to develop the business and target growth as we move forward. Our order book is now at 1 billion 41 million euros. And this is actually almost 140 million higher than what it was at the low point in Q3 of last year. And we are now above end of 2023 levels in terms of order book. Gross profit levels have remained strong and comparable operating profit on an LTM basis is at 12.6%. Orders received is now higher than sales on an LTM basis thanks to the strong order intake both in Q4 of last year as well as now the first quarter of 2025. We have continued our strong cash generation and our leverage is now standing at 0.1 times and our gearing is at 4%. I will come back to that. Return on capital employed is at 18.4% and we have close to 100% cash conversion over the last 12 months. Now, equipment orders have actually increased by 31% compared to the same period in the previous year. This was the second consecutive quarter of strong order intake in equipment and I could say that we saw positive growth signals in the beginning of the year across the board. Of course, then the future looks more uncertain as we move forward. But the beginning of the year was strong in terms of orders. Sales on the back of the lower order intake in 24 and the lower order book coming into the year is of course significantly lower in equipment than it was last year. And I think this is important to understand that the volume of course has an impact on the profitability of the equipment segment. However, it's still at a good level at 11.6%. I think the important thing to understand here is that whereas the commercial margin has continued stable or even increasing, of course, there's less volume and less margin contribution to cover the fixed costs, which on at least a medium term are as per definition fixed. And therefore, the lower volume has an impact on the margin. But if we would look at this on the gross margin level, this would be still an increasing picture. Services has seen very positive momentum. We have continued to grow the orders. Sales are up and profitability is clearly up at 19% for the quarter. Supported on the order side by significant contract renewals and upgrade projects, but then on the profitability with good execution. And services is of course providing resilience to the entire Kalmar business. on the profitability at 19%. This was supported by good commercial performance, execution and increased activity in our installed base. We have promised that we would come back to our 50 million gross efficiency improvement program in connection with this Q1 report. So here we go. The execution of our driving excellence initiative is ongoing and we are and continue to plan to reach the 50 million of gross efficiency improvements by the end of 2026. During the first quarter, we have progressed the implementation and we have reached a run rate of approximately 9 million of annualized gross efficiency improvements so far. The majority of these improvements are coming from commercial and sourcing activities. Driving excellence is, of course, much broader than that. The main components of the program are commercial excellence, so this is around pricing, supply chain optimization and sourcing, and then operational excellence, which is mainly consisting of process optimization and a continuous focus on competitive operational cost-based improvements and faster decision making. So quite a broad program all in all, focusing on both external factors as well as internal. As said, our return on capital employed enables strong long-term growth. 18.4% is the reported figure. However, if this would be corrected for the items affecting comparability, which were significant in 2024, the figure would be 3.6 percentage points higher at around 22%. balance sheet is strong and we have continued to lower our leverage as well as our gearing as said leverage now at 0.1 times EBITDA on the financing side then we have nothing major maturing during 2025 and you see the maturity profile of our debt financing there on the right hand side of the picture. And gearing now is at 4%. Of course, this is before dividends were paid out then in the beginning of the second quarter. Cash generation has continued strong. We generated 85 million of cash flow from operations before finance items and taxes in Q1, and the cash conversion rate was 97% for the last 12 months. And this was also the seventh consecutive quarter of positive cash flow generation. Finally, as a reminder, we have our guidance for 2025. We maintain the guidance and expect that our comparable operating profit margin will be above 12% in the full year 2025. Thank you.