Cargotec’s demerger plan, which first came to light in the spring of 2023, has now been approved by the Board of Directors (BoD). However, it will need to be ratified at the company’s Annual General Meeting that is planned for 30 May 2024. It is then hoped to complete the process within a month (30 June).

As previously discussed, the main reason for the demerger is to allow Kalmar to pursue sustainable and profitable growth opportunities independently. In addition, the BoD said that as two standalone businesses, the companies would be better positioned to achieve faster organic and inorganic growth thanks to a more tailored capital allocation strategy and flexible access to external capital.

The plan approved by the BoD involves transferring all assets, debts and liabilities related to Kalmar’s business area to Kalmar Corporation, a new company that will be separately listed. According to Cargotec, “an application is intended to be made to admit the class B shares of Kalmar for trading on the official list of Nasdaq Helsinki Ltd”.

Following the demerger, Kalmar would initially have the same ownership structure as Cargotec, and there would not be any cross-ownership between Cargotec and Kalmar. While originally, a separate Hiab Corporation was also mooted, the BoD has confirmed that no changes are planned for the Hiab load-handling division, which will remain within the existing company.

Cargotec’s third division, MacGregor will not feature in Cargotec’s future business portfolio, with the group stressing: “We continue looking for a solution for MacGregor during 2024.” MacGregor, which specialises in manufacturing cargo and load handling and cargo access solutions for the marine and offshore industries, has its business headquarters located in Singapore.

In preparing for the demerger, Cargotec has secured sufficient financing for the demerging businesses, subject to customary conditions and it intends seeking certain consents, waivers and amendments with respect to its in aggregate €250M in unsecured bonds maturing in 2025 and 2026 and certain Schuldschein loans.  Moreover, the group intends redeeming €100M worth of unsecured bonds maturing in March of this year.

In addition, Cargotec has received consents from the current lenders to keep its current revolving credit facility of €330M Meanwhile, current term loans of €300M will be transferred to Kalmar. In addition, Kalmar will have €150M of long-term revolving credit facilities.

On staffing, the BoD plans to propose that Jaakko Eskola be elected as the Chair of the Kalmar BoD and that Teresa Kemppi-Vasama and Tapio Kolunsarka are included as members of the Kalmar BoD. All would stand down from the Cargotec BoD.

Meanwhile, and as also previously reported, on 1 April Sami Niiranen will assume the role of president of Kalmar and he has been proposed as the new CEO. He will be joined on the leadership team  by:

• Sakari Ahdekivi, CFO;  
• Carina Geber-Teir, Head of IR and Communications 
• Francois Guetat, Head of Integrated Supply Chain
• Mathias Höglund, Head of Human Resources, starting 1 May 2024
• Tommi Pettersson, Head of Strategy, Sustainability and Technology 
• Marika Väkiparta, Head of Transformation Office 
• Alf-Gunnar Karlgren, Head of Counterbalanced
• Thor Brenden, Head of Terminal Tractors 
• Arto Keskinen,  Head of Horizontal Transportation (straddle carriers) 
• Shushu Zhang, Head of Bromma 
• Thomas Malmborg, Head of Services 
• Head of Legal & Compliance will be selected later. 

Cargotec has reported record sales in 2023. Sales increased by 12% to €4,569M  and comparable operating profit by 62% to €513M in 2023. The company did not break this figure down into its three brands, but it did say that the MacGregor turnaround is “progressing according to the plan.” There was a slowdown in sales in Q4, with the figure down 4% to €1,193M (€1,239M in Q4 2022).

Order intake in 2023 decreased by 18% to €3,987M. Order intake in Q4 was down by 15% to €1,015M. At the end of 2023 the order book amounted to €2,812M (€3,541M at the end of 2022).