Kalmar Oyj B

Good morning, everybody from a sunny, cold and snowy Helsinki. Welcome to Kalmar's Financial Statements Review 2025 webcast. My name is Carina Gebarteir 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. We have a Q&A session at the end of this presentation where you can ask questions. I would like to remind you that the webcast is recorded and it will be found on the Commerce Investor Relations website later today. Please also pay attention to the disclaimer as we will be making forward-looking statements. We are now ready to start the presentation. Please, Sami, the floor is yours.

Thank you very much, Carina, and good morning, everyone from Helsinki. It's my pleasure to present Kalmar's fourth quarter 2025 results. And starting with the highlights. In 2025, Kalmar continued its successful performance in an environment characterized by geopolitical turmoil and trade tensions. During these unpredictable times, we demonstrated resilience and performed well in many areas. Our orders growth was strong, sales development was stable, and we improved in profitability. Our focus of becoming a service driven company remained while we continued investments into world class sustainable innovations. The fourth quarter was a strong finish to the year. I will cover the main outcomes of the financials here and cover the details in the following slides. Firstly, our orders increased with 5% to a record level of 511 million euros, boosted by a few sizable equipment orders in the quarter. We are proud to report that our sales grew by 11% to 487 million euros. We saw stable demand environments in the last quarter of the year, which was in line with the previous quarter. The overall demand remained good despite continued market uncertainty. Profitability improved. Comparable operating profit reached 60.5 million euros and represented 12.4% of sales. Operating cash flow for the quarter was also strong. It was positively impacted by a decrease in inventories. Then looking at 2026, we expect Kalmar's comparable operating profit to be above 12.5%. And Sakari will cover the guidance in more detail in the financial section of this presentation. Let's now take a closer look at the profitability for the fourth quarter. As you can see in the comparable operating profit bridge on the right, our profitability was positively impacted by higher volumes and successful cost management during the quarter. We maintained a solid comparable operating profit margin, which increased to 12.4% compared to the comparison period. This improvement was delivered despite the negative impact of both tariffs and the result from our associated company, Brooks Rivertail. Let's now move to orders development, which were on a record level across both our segments. Equipment orders increased by 5%, primarily boosted by a few sizable orders, as mentioned earlier. I will cover some of the announced orders for the fourth quarter later in this presentation. Services orders also hit the new record level and orders were strong across the whole services portfolio, driven by recurring business, renewals and new one contracts. Services orders increased to a new record level of 166 million euros, which is a six percent improvement. And the overall demand for Kalmar's offering remained relatively stable compared to the previous quarter. And we will look at the geographical breakdown of these orders on the next slide. And then finally, the order book remained solid. This slide shows you the geographical split of orders across our new reporting segments, the Americas, EMEA and APEC. The fourth quarters orders received were driven by the Americas, with the few sizable orders pushing the orders up by 18% in this region. Despite the strong improvement in the Americas, the demand environment for our distribution and customers in the Americas was still hampered by trade tensions, causing slowness in decision making. Nevertheless, the Americas orders increased by 17% in 2025. In EMEA, we saw a decline in orders received during Q4, which is explained by the timing of large orders in the comparison period. However, full year orders for EMEA grew by 3%. Within APEC, the order intake was stable for the quarter and showed a 10% improvement for the full year. And then looking at the overall demand environment, ports and terminals and customer segment remained on a good level, whereas manufacturing and heavy logistics were sequentially stable during the fourth quarter, and the distribution and customer segment continued to be impacted by market uncertainty. Now let's review our sales performance, which demonstrated favorable development throughout 2025. During the fourth quarter, sales increased by 11% to 487 million euros. Both segments contributed, each growing by 11%. Services share of sales were on a stable level at 33% during the fourth quarter and 35% in 2025, up by two percentage points year on year. And this is well in line with one of our strategic pillars called growing services. Now let me show you how our sales performed across our three geographical regions. We saw positive sales development in all regions during the quarter, in both EMEA and the Americas sales grew, driven by growth in both segments. However, for the full year, the Americas was impacted by prolonged market uncertainty, a factor visible in the full year sales figures. Within the APAC region, the equipment segment performed well, driving the sales up by 16%. Overall sales in APAC also improved in 2025, driven by equipment and services segments. The positive momentum in our ECO portfolio continued. The share of total sales for our low-carbon solutions covering electric, hybrid and sustainable services rose to 43%, and the order intake share was at 42%. This clearly demonstrates the increasing customer demand for these offerings. Furthermore, the fully electric machine share of equipment orders for the last 12 months increased to 11%, up from 9% a year ago. And our key innovations during the fourth quarter included the launch of a new comprehensive range of Calomar DC charging solutions and the next generation lithium ion battery solution for Calomar's electric straddle carriers, which has been introduced also to our counterbalanced equipment portfolio in Q3 2025. Kalmar has a well-diversified business portfolio globally, with four end customer segments that performed well in 2025. The only exception was the distribution segment, our largest end customer segment in the Americas, which was impacted by prolonged market uncertainty throughout 2025. As I've already mentioned, services share of sales reached 35%, The services segment continues to bring stability to our total revenues, providing resilience for Kalmar. Our eco-portfolio remains an important driver towards our climate target, which is part of our performance targets until 2028. The sales of the eco-portfolio remained high, landing at 44% of total sales. Our successful results in 2025 were achieved by our team of 5,300 passionate employees worldwide who are dedicated to executing our strategy. We demonstrated a strong ability to adapt to changing circumstances in 2025, which provides us with a strong foundation for 2026, even as the market environment remains unpredictable. Let's now look at 2026 from a macroeconomic standpoint, which is one of the hot topics at the moment. The current macroeconomic uncertainty, driven by geopolitical tensions, leads to increased volatility in economic data, making it difficult to provide long-term forecasts. However, as this data shows, based on external indicators, the market in 2025 has been more resilient than previously anticipated. IMF increased its global GDP forecast again in October compared to July 2025. Also Drury has again upgraded its container throughput forecast for 2025 to above 6% and for 2026 to 2.1%. Oxford Economics has also upgraded the global manufacturing forecast upwards for 2025 and 2026 since June. The only exception is the global retail output development for which the 2026 forecast has been revised downwards to 2.2% from 2.7% in September 2025. However, this represents a slight acceleration in growth compared to 2025, which was 2.1%. Then building on the external market estimates from the previous slide, let's look at the current demand outlook for Kalmar. We anticipate that the total market demand for the next six months remains approximately at the similar level to what we saw in the second half of 2025. It goes without saying that trade tensions and increased geopolitical instability could have an impact on our markets and the demand from our four end customer segments. Now I would like to give you an update on the status of Calamar's fleet activity, which remained on a good level in 2025. Compared to the third quarter of the year, we saw an uptick in North America towards the end of the fourth quarter in 2025. Our installed base has grown steadily to over 70,000 machines from 68,000. At the end of 2025, we had over 16,800 connected equipment globally, compared to 14,500 equipment at the end of 2024. And then if you look at the regions, we see a positive trend year on year, indicating increased activity at our customer sites during the year. However, there are also some variations, as you can see, in terms of the Latin America quarter to quarter development, which was impacted by market uncertainties mentioned earlier. As I promised, let's cover some of the highlights from our published orders during the quarter. Within equipment segment, we agreed on 16 hybrid straddle carriers to transnet port terminals in Cape Town and Port Elizabeth in South Africa. Three Kalamar hybrid straddle carriers to fourth port Scrangemouth, Scotland in United Kingdom, and 30 hybrid straddle carriers to Maher terminals, Marine Container Terminal in New Jersey in US. In services, we concluded a 10-year strategic supply agreement with Patrick Terminals for Brisbane Autostrad terminal in Australia, a modernization services agreement to relocate and modify two JetPMC ship-to-shore cranes with Eurogate for its container terminal Wilmershaven in Germany. and an agreement with OSTP Finland for the delivery of five Kalmar medium forklift trucks with the five-year essential care maintenance contract for the machines and a three-year Kalmar complete care service agreement with Ylport Oslo Terminal Investments AES in Norway. Then let's continue to sustainable innovations, which remained high on our agenda in 2025. And the year was filled with notable innovations, which were manifested in multiple milestones during the year. Here I will present a few of those. During the year, we expanded our electric offering. An example of this is the official start of sales of Kalmar's third generation electric terminal tractor in North America. Within electrification, we launched next-generation lithium-ion battery technology for our electric counterbalanced equipment portfolio and electric straddle carriers. Furthermore, we kicked off a five-year move to green R&D program and were granted 20 million euro funding from Business Finland leading company competition. Moreover, the construction work of our new innovation test center in Ljungby, Sweden, started during the year. In automation, we expanded our offering. An example of this is Automation as a Service, which is a subscription-based model designed to ensure successful and efficient deployment of automation in marine container terminals and intermodal sites. Another example of automation is a flexible, scalable Kalmar-1 automation system introduced as a standalone solution in 2025. And with this, we are responding to the increasing demand from customers for a modular OEM and equipment type agnostic fleet management solutions. Moving into a short summary of financial highlights before handing over to Sakari. The fourth quarter was a strong finish to the year with the record order intake and solid sales growth. Both equipment and services orders increased, boosted by a few sizable orders within the equipment segment. Services orders were strong throughout the entire services portfolio, and sales improved in both segments. The shortfall of the quarter was the services margin development, ending up at 16.2%, impacted by tariffs. Tariff-related impacts were proactively mitigated in the equipment segment, and Sakari will provide a more detailed view on the margin development for both segments shortly. At the end of 2025, Kalmar was in a good financial position to capture the growth in 2026, despite the continued uncertain market environment. Finally, I would like to wrap up my part by highlighting that we remain committed to our strategic priorities and driving sustainable growth by leading the industry with innovations towards automation and electrification. expanding our services, business and presence, and pursuing operational excellence to ensure long-term value creation in line with our 2028 targets. So I will now hand over to Sakari. So thank you for listening.

Thank you, Sami, and good morning to everyone also from my side. Let's start with our traditional slide on the financial profile of Kalmar. And I'll do some comparisons to the targets that Sami just was showing. So for the orders received in 2025, we achieved an 8% growth. and also when we compare the orders and sales, we can see that we have strengthened the order book, and the order book is close to 1 billion euros at a healthy level. Due to the good operational execution and successful management of our costs, our comparable operating profit margin was 12.8%. That's up. 0.2% compared to the previous year, and moves us closer to the 15% target that we have set out for 2028. Our balance sheet has been further strengthened. Our leverage ratio was actually at 0.0 now times EBITDA, and that's of course clearly lower than our target of less than two times. Finally, with the strong cash flow in the fourth quarter, our cash conversion for the last 12 months of the full year, 25, was 89%. Then, moving into the segments for a little bit more detail there. The equipment segment saw a strong quarter. The orders received increased by 5%. That may not sound like a really high number, but I think it's important to remember that we had a very strong quarter also in Q4 of the previous year, so the comparison was already a tough one. The orders were, as Sami said, driven by a few sizable orders, but overall also the order intake across the business was good. Sales was also strong again compared to a strong comparison period in 2024. During the fourth quarter, orders increased in the Americas while we saw a decline in orders in EMEA and APAC remained stable. Equipment sales increased by 11%. The equipment segment's profitability improved in absolute terms by 24% in the quarter compared to 2024 Q4. As you can see from the bridge on the right-hand side, this was as a result of higher volumes and also lower fixed costs in the quarter. The comparable operating profit margin was at 13.6%. We proactively mitigated the majority of the tariff-related impacts, although they still had some negative impact on some of the margins in our product lines. Then moving on to service. Services orders received increased by 6% in the quarter and totaled 166 million euros. The order intake was strong across the entire service portfolio, driven by recurring business renewals and won contracts in the previous quarter. On the sales side, the fourth quarter sales increased by 11%, despite market turbulence, and totaled 163 million euros, which was mainly driven by volumes as opposed to price. Services segment comparable operating profit was one of the lowlights of the quarter, remained flat in absolute terms, and the operating profit margin was at 16.2%, which actually represented a decrease of 1.3 percentage points. This decrease was mainly driven by tariffs. And of course, it goes without saying that our focus remains on mitigating actions related to tariffs and also otherwise driving the profitability of our service segment going forward. So, speaking of tariffs, the tariff landscape is largely unchanged from previous quarter. However, of course, we continue to monitor that closely, and we, of course, cannot be sure what happens in the future in these terms. As in the previous quarters, our responses to tariffs have included mitigating actions with price increases, supply chain actions, driving excellence, and other operational excellence initiatives in our operations. Which takes me nicely to our driving excellence program. This is one of my favorite themes. We have, of course, achieved good results here. The execution of Driving Excellence, which was launched back in 2024, is proceeding as planned, and our target is to reach 50 million euros of gross efficiency improvements by the end of 2026. In 2025, we made good progress with the implementation of driving excellence, and by the end of the fourth quarter, we achieved a run rate of approximately 34 million euros of annualized gross efficiency improvements. As before, the majority of these improvements were secured from sourcing activities. Then moving on to the balance sheet side or towards that, return on capital employed was now at 23%. And as you can see, this has been climbing now. ROSI number is now clean of the demerger-related items affecting comparability, which have been there in the previous quarters. So this represents, in that sense, kind of a comparable or clean level of ROSI at 23%. And as you remember, our target long term is over 25%. As I mentioned in the beginning of my section, our balance sheet was further strengthened during the quarter, with a leverage ratio now of zero and a gearing of 0.7. The decline in interest-bearing net debt, which improved our leverage ratio, was primarily as a result of strong cash generations from operations in the quarter, and this allowed us also to partially repay some of our loans from financial institutions during Q4. Looking at the maturity profile, I would like to highlight that we refinanced 100 million and prepaid 50 million euros of our loans from financial institutions. In addition, we exercised the first one-year extension option of our 200 million long-term revolving credit facility, extending maturity now to 2030. Cash flow was strong in the fourth quarter. It was, in Euro terms, 113 million euros, which was, of course, clearly up from both previous year and the previous quarter. The improvement was driven firstly by profitability, but also by a clear decrease in inventories during the quarter, and cash conversion for the last 12 months was 89%. We concluded the year with solid financials, as you can see. As a result, the Board of Directors proposes to the Annual General Meeting that of the distributable profit dividend of €1.10 for each Class B share and €1.09 for each Class A share to be paid for the financial year 2025. This equals to 71 million euros in total. Our earnings per share for the year was €2.55, which was up from the previous year at €1.99. The effective dividend yield is 2.7%. The record date of the dividend is proposed to be the 2nd of April, 26, and the payment date, the 13th of April, 2026. And just to iterate that the dividend proposal for the financial year is in line with our dividend policy of between 30% and 50% payout ratio. And then, as Sami already said, our guidance for the full year 2026 is that Kalmar expects its comparable operating profit margin to be above 12.5% of sales. That concludes my part of the presentation. We'll move to Q&A. Thank you.