Strong year in orders received, profit below our target

How did the order intake develop in Q4?
Increase in all business areas: Kalmar +22%, Hiab +24%, and MacGregor +46%. Total orders +26% Q4 y-o-y (+26% in comparable FX). Service orders grew +15%.

It seems like Hiab’s operating profit has weakened - what kind of possibilities you have to support the EBIT development going forward?
Weak USD had a major, approximately 20M€ impact on Hiab’s profitability compared to 2017. The currency situation has slightly improved in the last quarters. Hiab’s profitability has also been impacted by the supply chain issues and those issues we are working on. Hiab is also looking for additional productivity improvement in line with the company wide strategic priorities. Backlog is 51% higher than year ago.

What are your plans to improve the productivity?
We are looking for cost savings in all relevant areas, like in assembly operations, in procurement as well as in back office activities.

What are the assumptions behind the guidance?
Current order backlog, current market demand, FX, especially the USD/EUR on the current levels and our possibilities to improve the productivity. 

How is the supply chain developing? When can we expect that the problems will be solved?
We still have bottlenecks, we have a few key suppliers whose performance has been very poor. In Hiab, we are also suffering from bottlenecks in installation capacity. One bottleneck is also related to the availability and price of trained staff in our main assembly unit in Poland. It may still take time to solve the problem.

Why was the cash flow for 2018 so weak? Is the cash flow expected to be stronger in H1/2019, assuming that you will succeed to solve the supply chain issues?
Cash flow decreased, as more capital was tied up in inventories due to supply chain bottlenecks in Kalmar and Hiab. Accounts receivable were higher due to increased volumes.

Cash flow for 1H19 continues to be burdened by the component shortage and installation capacity constraints.

How does IFRS16 impact your figures?
Based on very preliminary estimates, gearing will increase approximately 10 percentage points, operating costs will decrease approximately 5 million euros, and finance costs will increase 5-10 million euros.

What was the impact of acquired and divested businesses to sales and orders in Q4/18?

Orders: 

• Acquired: Rapp Marine +21.3 MEUR, Inver +2.1 MEUR, Effer +18.0 MEUR
• Divested: KRTC -11.4 MEUR, Siwertell -18.6 MEUR
• Net +11.5 MEUR
• Organic growth 26%

Sales:

• Acquired: Rapp +14.1 MEUR, Inver +2.8 MEUR, Effer +16.1 MEUR
• Divested: KRTC -8.5 MEUR, Siwertell -19.5 MEUR
• Net +5.0 MEUR
• Organic growth 2%