Kalmar (KALMAR) Q2 2024 earnings summary

Executive summary

• Completed demerger from Cargotec and listed on Nasdaq Helsinki on 1 July 2024, marking a new era as an independent company.

• Achieved solid profitability in Q2 2024, with a comparable operating profit margin of 12.6%, supported by commercial performance and cost efficiency initiatives.

• Eco portfolio accounted for 40% of total sales in H1, reflecting a strategic focus on sustainable innovation.

• Demand remained stable sequentially, though order intake and sales declined year-over-year due to softer market conditions, especially in North America.

• Launched the Driving Excellence initiative targeting €50 million in gross efficiency improvements by 2026 to support a 15% operating margin by 2028.

Financial highlights

• Q2 2024: Orders received €375m (-14%), sales €417m (-25%), comparable operating profit €52m (12.6% margin), profit for the period €31m, EPS €0.49.

• Order book at period end was €925m, down 28% year-over-year; LTM orders slightly below €1.6bn.

• Gross profit margin Q2: 26.5%; LTM: 25.5%.

• Return on capital employed (ROCE, LTM) 20.2%; cash conversion (LTM) 148%.

• Cash flow from operations before finance items and taxes improved to €11.3m in Q2 and €113m in H1.

Outlook and guidance

• 2024 outlook unchanged: comparable operating profit margin expected to be above 11% as a standalone company.

• Long-term targets for 2028: 5% annual sales growth, 15% comparable operating profit margin, ROCE above 25%, leverage under 2x, and dividend payout ratio of 30-50%.

• Market expected to remain flat in 2024 and 2025, with sequentially stable demand.