Cargotec considers options

Crane and material handling equipment manufacturing group Cargotec is considering its options following yesterday’s abandonment of its proposed merger with Konecranes (story here).

The board of directors aims to “refocus the strategic direction of the company for higher financial performance.” It will focus on sustainability and growth in the profitable core businesses of Hiab, Kalmar Mobile Solutions and Kalmar’s horizontal transport business.

Hydraulic loader crane and handling equipment maker Hiab will be the core of Cargotec’s strategy where there are “plans to further accelerate the development of Hiab’s M&A pipeline.” In 2018 Hiab acquired Italian manufacturer Effer which specialises in larger loader cranes for specific applications.

The company was specific about the Kalmar business areas mentioned above because it said it will start planning an exit from the heavy port cranes business. Sales of heavy port cranes in 2021 were €97 million, with its comparable operating profit down more than 20%.

Options, including a possible sale, are being considered for the MacGregor offshore crane and ship equipment business.

In addition to the above, Cargotec plans to accelerate its research and development investments in electrification, robotics and digitalisation, plus the company’s climate programme Mission Climate.

Mika Vehviläinen, Cargotec CEO, commented, “Cargotec refined its strategy in April 2021 with sustainability and profitable growth as breakthrough objectives. Our vision remains, but we will further focus our businesses. That would enable us to accelerate M&A and R&D investments in our profitable core and I’m confident that with our refocused strategic direction we will be well positioned to capture growth in industry trends of electrification, automation and digitalisation.”

“With this planned balanced portfolio we will support our customers with lifecycle services as well as market leading equipment and technology in our profitable core businesses Hiab and refocused Kalmar. These are recurring businesses with already above 10 per cent comparable operating profit margins. The markets are structurally attractive and we hold leading market positions there. We are now planning to exit or evaluate strategic options for the project businesses where we have been less successful,” Vehviläinen continued.