The Annual Report 2021 consists of the annual review, financial review, corporate governance statement and remuneration report and the Board of Directors’ report.
“In 2021, our market situation improved, global economic activity picked up, and the demand for our products and solutions strengthened significantly. As the year progressed, however, component shortages and supply chain challenges delayed our deliveries. The continuing Covid-19 pandemic also hampered both our operations and those of our customers,” said Mika Vehviläinen CEO, Cargotec.
“Orders received increased by 42% compared to the comparison period. The order increase was particularly noticeable in short-cycle products (Hiab and Kalmar’s mobile equipment), but the project business orders also increased clearly both in Kalmar and MacGregor. The order book grew by 56%.
“Despite the strong demand, our sales increased by only 2%. This was due to lower project deliveries in Kalmar and MacGregor as well as the sale of the Navis business. Component shortages and global logistics challenges limited our ability to respond to the demand.
“I am satisfied with the progress of our service business. It reached a new record with services sales increasing by 7% and services orders received by 18% compared to the previous year. Service and software business sales constituted 35% of our total sales in 2021.
“Cargotec’s comparable operating profit increased by 2% to €232m, driven by higher comparable operating profit in Hiab. Challenges in the delivery chain and added costs thereof impacted Kalmar’s result in particular, causing its comparable operating profit to decrease by 5%. MacGregor’s market developed positively but, due to one-time cost overruns related to new product developments in offshore wind energy vessel projects during the last quarter, MacGregor’s result for the whole year turned negative.”
In July, Cargotec completed the sale of the Navis business to Accel-KKR, a Silicon Valley-based investment firm for an enterprise value of €380m. The transaction had an approximately €230m positive impact on its operating profit and the proceeds enable further investments in acquisitions and R&D investments in electrification, digitalisation, robotisation, and automation.
“During the year, we announced our agreement with SSAB to work on the introduction of fossil-free steel to the cargo handling industry. This is a significant milestone in moving toward sustainable development and a fossil-free product offering,” added Vehviläinen.
“The year 2021 marked a considerable milestone for Kalmar as its entire portfolio became available as electrically powered versions. As a culmination of the year, Kalmar launched three new fully electrically powered solutions in December: Kalmar Electric Reachstacker, Kalmar Electric Heavy Forklift and Kalmar Ottawa Electric Terminal Tractor. With these launches Cargotec can offer electric products in all of its product categories.
“Hiab strengthened its position in the US with the acquisition of Galfab, a US manufacturer of demountables. To meet the growing demand for truck-mounted forklifts, Hiab is also expanding its production to the United States and increasing its truck-mounted forklift production capacity in Dundalk, Ireland.
“In terms of MacGregor, the focus of new offshore vessel orders has shifted to vessels supporting wind power. Despite the year-end difficulties in new product developments in the offshore wind energy field, I firmly believe MacGregor is well positioned to strengthen its position as a provider of wind power solutions in the future.”
Cargotec’s research and product development expenditure in 2021 totalled €102m, representing 31% of sales.
During the year, Kalmar also introduced a future range of robotised mobile equipment solutions and an automated container information solution for reachstackers for safer and more efficient container movement management.
Along with its product launches during the year, Hiab announced, in addition to the new multi-assembly unit investment in Dundalk, Ireland, the new facility will also house a global innovation and R&D centre.
MacGregor’s extensive R&D activities in 2021 included next generation variable frequency drive (VFD) electric cranes and a fully electrically driven heavy lift crane, among others. The VFD increases efficiency by up to 50%, with additional benefits achieved through weight reduction.
“It seems that we will have to live with the Covid-19 pandemic for a while still. It is important that we protect ourselves and our fellow human beings in compliance with official guidelines. At the same time, however, we must be able to ensure the continuity of social and economic activity both globally and locally, and make sure that everyday life goes as smoothly as possible for us all,” said Vehviläinen.
“Component shortages and global logistics challenges will continue in 2022, which may limit Cargotec’s ability to respond to the growing demand. We work in close cooperation with our suppliers to ensure component availability, production and deliveries also in 2022. Our order book is strong, which gives us a good setup for 2022.”
