Investor presentation, December 2019 Becoming the leader in intelligent cargo handling
Investor presentation December 2019 1 Investor presentation December 2019 2 Content 1. Cargotec in brief 2. Investment highlights 3. Kalmar 4. Hiab 5. MacGregor 6. Recent progress 7. Appendix
3 Cargotec in brief
4 4 Strong global player with well-balanced business
Sales: Sales split: new Sales by Sales by EUR 3,304 million equipment vs service business areas geographical area EBIT: 7.3% and software
Kalmar Service and MacGregor Kalmar EMEA software 49% AMER Sales: EUR 1,618 million 16% 49% 34% 31% EBIT: 8.9% (EUR 143.6 million)
Hiab Sales: EUR 1,149 million EBIT: 11.7% (EUR 134.5 million) Hiab MacGregor 35% APAC Sales: EUR 538 million New equipment 20% EBIT: -0.3% (EUR -1.6 million) 66%
Strengths we are building upon Leading market positions Strong brands Loyal customers Leading in technology in all segments
Figures: 2018 EBIT = Comparable operating profit Investor presentation December 2019 5 Key competitors Cargotec is a leading player in all of its business areas
Global main competitors
Other competitors
Investor presentation December 2019 6 Currently two businesses performing well
Net sales* in Q4/18-Q3/19 Trend in orders, Profitability: Comparable EBIT EUR million last 12 months margin
~400 Kalmar software (Navis) ~1,300 and Automation and Projects Low due to long term division investments
~600 MacGregor 3,578 +39% -3.8%
Hiab +23% 11.8% ~1,300
Kalmar MacGregor Kalmar equipment and service equipment Kalmar APD and (excluding Automation and Low double digit Hiab software Projects Division & Navis)
* Figures rounded to closest 100 million
Investor presentation December 2019 7 Investment highlights
8 Investment highlights: Why invest in Cargotec?
1. Technology leader and strong market positions, leading brands in markets with long term growth potential 2. Our vision is to become the global leader in intelligent cargo handling 3. Growing service & software business and asset-light business model are increasing stability 4. Capitalising global opportunities for future automation and software growth 5. On track for profitability improvement and to reach financial targets
Investor presentation December 2019 9 1. Technology leader and strong market positions, leading brands in markets with long term growth potential
Global Growth Competitive Market megatrends drivers advantages position . Globalisation . Container . Strong brands . #1 or #2 in all and trade throughput . Full major growth growth automation segments . Urbanisation . Construction offering . Growing activity . Technology middle class . Automation leadership . Digitalisation
Investor presentation December 2019 10 2. Our vision is to become the global leader in intelligent cargo handling
VISION GLOBAL LEADER IN INTELLIGENT CARGO HANDLING
WIN THROUGH CUSTOMER CENTRICITY ACCELERATE DIGITALISATION
We help our customers achieve their goals We build and expand our digital solutions to offer by aligning our offering and way of working to a great customer experience and more efficient serve them better. business processes. MUST-WIN BATTLES ADVANCE IN SERVICES PRODUCTIVITY FOR GROWTH
We extend our offering towards intelligent solutions that We focus on activities that add value and benefit enable us to serve our customers wide across their our customers and us by developing our lifecycle. business operations and common platforms.
Investor presentation December 2019 11 3. Growing service & software business and asset-light business model are increasing stability
Service and software* sales Asset-light business model with a flexible cost MEUR structure . 1,200 Kalmar and Hiab: efficient assembly operation 1,090 1,126 1,100 1,052 1,053 +4% +3% . MacGregor: efficient project management and 147 1,000 955 +10% 121 +0% 152 engineering office: > 90% of manufacturing and +9% 149 900 873 108 30% of design and engineering capacity outsourced 107 800 . No in-house component manufacturing 700 600 Next steps to increase service and software sales: 500 980 931 905 938 . Improve service offering through digital solutions 400 847 766 . 300 Build on Navis position as industry leader 200 . Increase spare parts capture rates 100 . Boost service contract attachment rates 0 2013 2014 2015 2016 2017 2018 Services Software
*) Software sales defined as Navis business unit and automation software Investor presentation December 2019 12 4. Capitalising global opportunities for future automation and software growth
Industry trends support growth Significant possibility in port Automation creates significant cost savings* in port automation: software: Labour costs 60% less labour costs . Only 40 terminals (out of 1,200 . Container value chain is very Total costs 24% less costs terminals) are automated or semi- inefficient: total value of waste and Profit increase 125% automated currently globally inefficiency estimated at ~EUR 17bn . Ships are becoming bigger and . Over 50% of port software market is the peak loads have become an issue in-house, in long term internal . Increasing focus on safety solutions not competitive . . Customers require decreasing energy Navis has leading position in usage and zero emission ports port ERP . Optimum efficiency, space utilization Customers consider their automation and reduction of costs are increasingly decisions carefully important . Shipping line consolidation . Shortage and cost of trained and . Utilisation rates of the existing skilled labour pushes terminals to equipment base automation . Container throughput volumes * Change when manual terminal converted into an automated operation . Efficiency of the automation solutions Investor presentation December 2019 13 5. Clear plan for profitability improvement and to reach financial targets
Growth Profitability Sales and comparable operating Target to grow faster than market Target 10% operating profit and profit development . 15% ROCE in 3-5 years* Megatrends and strong market 4,500 6.2% 400 7.1% position supporting organic growth 4,000 4.4% Higher service and software sales 4.0% 3,729 8.0% 7.3% 350 3,514 . M&A potential key driver for profitability 3,500 3,358 3,304 3,181 3,250 300 improvement 3,000 250 Cost savings actions: 2,500 259 Service and software 250 242 231 200 Targeting service and software sales . 2020 EUR 30 million (indirect 2,000 150 40% of net sales, minimum EUR 1.5 purchasing and new Business 1,500 Services operations) 149 billion in 3-5 years* 1,000 127 100 Product re-design and improved 500 50 project management Balance sheet and dividend 0 0 Target gearing < 50% and 2013 2014 2015 2016 2017 2018 increasing dividend in the range of 30-50% of EPS, dividend paid twice Net sales Comparable operating profit margin a year Comparable operating profit
*Target announced in September 2017
Investor presentation December 2019 14 Kalmar
Investor presentation 15 15 Container throughput still forecasted to grow year on year
TEU million
Growth from 2013 to 2023 48% 1,000 948 CAGR 4.0% 912 +4.0% 875 +4.2% 838 +4.4% 133 784 806 129 800 +4.0% 125 748 120 702 +2.6% 675 685 +4.7% 115 117 642 +6.5% 109 235 +2.6% 101 227 98 +1.5% 101 220 600 96 +5.1% 213 202 206 195 182 182 185 173 400
556 581 504 530 444 466 482 200 373 395 401 416
0 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
APAC EMEA AMER 2019-2023: Drewry: Container forecaster Q3 2019 2016-2017: Drewry: Container forecaster Q2 2019 2015 Drewry: Container forecaster Q2 2018 2013-2014 Drewry Global Container Terminal Operators Annual Report 2013 Investor presentation December 2019 16 Flexible and scalable Navis TOS software
Terminal Operating System (TOS)
Terminal Logistic System
Truck / Transfer area Automated Horizontal Transportation
Automatic stacking crane (ASC) area Quay crane area
ASC stack area
Equipment Equipment
Investor presentation December 2019 17 Kalmar’s operating environment
Provides integrated port automation The collaboration platform solutions including software, serving the needs of ocean services and a wide range of cargo carriers, terminals and their Transfer handling equipment shipping partners area Yard
Horizontal Transportation TOS coordinates and optimises Industry leading spreader the planning and management manufacturer Quay of container and equipment moves in complex business environments. Navis provides also maritime shipping solutions: . Stowage planning . Vessel monitoring . Loading computer . Route planning
Investor presentation December 2019 18 XVELA provides benefits to ocean carriers and terminal operators
. Today’s container supply chain is a fragmented and siloed framework . Information sharing between parties is not optimally structured – Forms of communication today include email, phone calls, EDI, paper plans – Problems: incomplete data, errors, information not available on time . In-house developed XVELA is a many-to-many platform to solve these issues – Real-time stowage collaboration – Port-to-port visibility and collaboration – Synchronisation of planning between carriers and terminals Benefits of XVELA: . Faster vessel turn times . Operational efficiencies . Cost savings
Investor presentation December 2019 19 Services provide our biggest medium-term growth opportunity
Market Equipment & Projects Software Services share 20-30% 20-30% 3-5%
Market size 6B€ 0.5-1B€ 8B€
Investor presentation December 2019 20 Automation deals highlight our successful investments in automation
Kalmar and Navis to deliver world-first intermodal automation solution to Sydney, Australia Greenfield intermodal terminal, Qube’s Moorebank Logistics Park . First fully automated intermodal terminal in the world Kalmar OneTerminal contract, including Navis N4 TOS All equipment can be operated electrically on local solar power Order value EUR 80 million, booked in Q2 2018
Fully digitalised and autonomous container handling solution with software and services to Yara Solution enables autonomous, cost efficient and emission-free operations of the Yara Birkeland container ship in Norway
Investor presentation December 2019 21 Hiab
Investor presentation 22December 201922 Construction output driving growth opportunity
EMEA construction output AMER construction output y/y change (%) y/y change (%)
5.0% 130 4.0% 125 125 120 3.5% 4.0% 120 115 115 3.0% 110 3.0% 110 105 105 2.5% 100 2.0% 100 95 95 2.0% 90 1.0% 90 85 85 1.5% 0.0% 80 80 1.0% 75 75 70 -1.0% 70 0.5% 65 65 -2.0% 60 0.0% 60 2010 2012 2014 2016 2018 2020 2022 2010 2012 2014 2016 2018 2020 2022 Index Change % Index Change %
Oxford Economics: Industry output forecast 9/2019
Investor presentation December 2019 23 Strong global market position and customers across diverse industries
Industry segment MARKET SIZE* KEY HIAB GLOBAL (EUR billion) SEGMENTS POSITION & TREND indicative sales mix 2018 LOADER Construction CRANES ~1.5 and Logistics #2
TAIL Retail Industry and LIFTS ~0.9 Logistics #2
Waste and DEMOUNTABLES Recycling, #1 ~0.6 Defense
Most important segments TRUCK MOUNTED Construction #1 • Construction and FORK LIFTS ~0.3 and Logistics Building Material • Delivery Logistic • Waste & Recycling FORESTRY & Timber, Pulp, • Timber, Paper & Pulp RECYCLING CRANES ~0.3 Paper & Recycling #2 • Defense Logistic • Road & Rail • Other
*) Cargotec estimate Investor presentation December 2019 24 Attractive megatrends and growth drivers
MEGA . Urbanisation and Consumption growth driving needs for efficiency TRENDS . Digitalisation and Connectivity enabling new business solutions
MARKET . North America and main European markets continue to grow GROWTH . Developing markets strong load handling equipment penetration potential
KEY . Construction, Waste & Recycling, Logistics and Governmental SEGMENTS business segments show continued growth projection
PRODUCT . New applications market and segment growth potential OFFERING . Developing for increasing demand in Electrification and Automation
SERVICE . Growing demand for comprehensive life-cycle service offerings SOLUTIONS and tailored business solutions
Investor presentation December 2019 25 Hiab’s key growth drivers
Cranes Tail lifts Truck-mounted forklifts Services Gain market share in big Enter fast growing emerging Accelerate penetration in Increase spare parts capture loader cranes and crane markets and standardise North America and Europe rates driven by connectivity core markets and globalise business and e-commerce model
Investor presentation December 2019 26 MacGregor
27 We are an active leader in all maritime segments ~2/3 of sales ~1/3 of sales
Merchant Marine Naval Logistics Offshore Marine Resources Cargo Flow People Flow and Operations Energy & Structures
. Container cargo . Ferry . Naval & Military . Oil & Gas . Research . Bulk cargo . Cruise Supplies Logistics . Renewables . Fishery . General cargo . Superyachts . Naval & Military . Aquaculture . Liquid cargo Operations Support . Mining . RoRo cargo . Ship-to-ship transfer
Lifecycle Services
Picture: Statoil
Investor presentation December 2019 28 Merchant Ships and Offshore contracting activity below historical levels
Source: Clarkson Research, September 2019 Investor presentation December 2019 29 MacGregor’s asset-light business model gives flexibility
Sales & Design & Manufacturing Installation Lifecycle marketing engineering support
MacGregor MacGregor MacGregor MacGregor MacGregor
Outsourced Outsourced Outsourced
Cost-efficient scaling 90%* of manufacturing outsourced 30%* of design and engineering capacity outsourced * TTS business excluded
Investor presentation December 2019 30 Recent progress
31 Highlights of Q3 2019 – strong improvement in operating profit
7.7% 7.6% Comparable operating profit up by 18% 7.2% 7.1% 6.7% compared to Q3/18 70 68 . Kalmar’s comparable operating profit 64 increased by 24% compared to Q3/18 58 57 . Hiab’s comparable operating profit up by 41% . MacGregor’s comparable operating profit was MEUR -5.8 million TTS result has been consolidated into MacGregor's financial figures as of 1 August Cargotec’s2019 January–September 2019 interim report Mika Vehviläinen, CEO • Mikko Puolakka, CFOQ3/18 Q4/18 Q1/19 Q2/19 Q3/19 Comparable operating profit EUR million Comparable operating profit margin
Investor presentation December 2019 32 TTS acquisition completed
Strategic rationale Overview of the acquired Acquisition business Service growth potential Employs ca. 600 people Acquired businesses represent around 90% of total sales of the Strengthening MacGregor’s Services 26% of revenues TTS Group position also in China Estimated 2019 sales EUR 50 million, Announced enterprise value Based on revised estimates, comparable operating profit at break- EUR 87 million potential cost synergies are even estimated to be around Acquisition was completed on Closing balance sheet expected to be EUR 25-30 million on annual 31 July 2019 completed during Q4 level TTS results have been Restructuring costs ca. EUR 40 million consolidated into MacGregor's in 2019 financial figures as of 1 August 2019
Investor presentation December 2019 33 Market Global container throughput (MTEU) – Key driver for Kalmar Source: Drewry 600 500 588 603 environment 400 +2.6% 300 200 1-9/2019 100 0 Growth in number of containers 1-9/18 1-9/19 handled at ports continued Construction output – Key driver for Hiab Source: Oxford Economics . Customers are starting automation United States Europe projects mainly with phased investments +0.5% +3.0% Construction activity increased in Europe and grew slightly in the US 1-9/18 1-9/19 1-9/18 1-9/19
Source: Clarkson Research In the merchant sector, the orders New building contracting – Key driver for MacGregor (number of ships and offshore units) received remained at a low level Merchant ships > 2,000 gt (excl. ofs & misc) Offshore mobile units Indicative historical average . In offshore, activity remained on a 2,000 500 Historical average low level. Sales declined slightly 1,500 Historical average 400 300 1,000 200 500 -19% 56 683 554 100 -43% 32 0 0 1-9/18 1-9/19 1-9/18 1-9/19
Investor presentation December 2019 34 Orders received declined from the comparison period
Orders received MEUR
1,200 1,022 981 991 1,000 921 863 165 872 131 184 -19% 858 141 +10% 784 116 (y/y) 800 124 (y/y) 156 126 301 341 294 357 600 307 340 +4% 307 289 (y/y) 400
550 516 432 486 450 200 369 417 -19% 396 -(y/y)19% (y/y) 0 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019
Kalmar Hiab MacGregor
Investor presentation December 2019 35 Order book increased
Order book Order book by reporting MEUR segment, Q3 2019 2,400 2,251 2,145 2,200 2,072 1,995 2,000 1,887 1,786 536 712 1,800 1,684 519 32%-11% 530 (y/y) 1,600 513 503 1,400 519 483 453 458 1,200 371 453 337 1,000 329 800
600 1,127 1,101 1,083 48% 947 1,003 1,012 400 837 200 20% 0 0 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 Q3/19
Kalmar Hiab MacGregor Kalmar Hiab MacGregor
Investor presentation December 2019 36 Sales increased, comparable operating profit up by 18%
Sales Comparable operating profit MEUR MEUR
1,000 80 910 911 901 69.6 68.3 856 70 64.3 816 805 127 57.8 57.4 149 170 57.2 139 60 750 133 130 50 358 318 307 40 295 260 316 500 30 20 10 250 444 389 415 401 427 424 0 -10 0 -20 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 Q3/19 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 Q3/19
Kalmar Hiab MacGregor Kalmar Hiab MacGregor Cargotec total EBIT*
*) Including Corporate admin and support
Investor presentation December 2019 37 Service and software sales increased
Service and software* sales Services Q3 2019 service sales MEUR Software . Kalmar +4% • +3% in comparable FX and adjusted for 350 divestments
300 . Hiab +14% 44 47 41 38 . MacGregor +27% 29 39 250 . Total service sales +7% in comparable FX and adjusted for 200 acquisitions and divestments 150 257 259 269 Software sales +11% 247 239 249 100 Service and software sales 50 constituted 34% of total sales 0 in 1-9/19 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 Q3/19 *Software sales defined as strategic business unit Navis and automation software
Investor presentation December 2019 38 Kalmar Q3 – comparable operating profit increased
MEUR Q3/19 Q3/18 Change Orders received decreased Orders 396 486 -19% . Decline in automation solutions, received projects and in mobile equipment Order book 1,083 1,003 +8% Sales increased Sales 424 415 +2% . Services growth +3% in Comparable 47.8 38.6 +24% comparable FX and adjusted for operating divestments profit Profitability improvement driven Comparable 11.3% 9.3% +196bps operating by growth in sales and by a profit margin favourable mix
Investor presentation December 2019 39 Hiab Q3 – solid orders continued
Orders received grew by 4% MEUR Q3/19 Q3/18 Change . Growth in the Americas (+27%), Orders 307 294 +4% decline in EMEA (-7%) received Order book 458 371 +23% Sales +18% Sales 307 260 +18% . Sales +12% excl. Effer acquisition . Comparable 34.1 24.2 +41% Service sales +14% operating Comparable operating profit profit increased due to growth in sales Comparable 11.1% 9.3% +179bps operating profit margin
Investor presentation December 2019 40 MacGregor Q3 – further productivity actions required
Orders received increased by 10% MEUR Q3/19 Q3/18 Change . Decline in equipment orders, Orders 156 141 +10% service orders +30% received Sales increased by 31% Order book 712 513 +39% . Sales growth excl. TTS 17% Sales 170 130 31% . Service sales +27%, +9% excl. TTS Comparable -5.8 1.0 < -100% operating Comparable operating profit profit declined Comparable -3.4% 0.8% -417bps . Low capacity utilisation, lower sales operating margins, and cost overruns in profit margin certain offshore projects . Productivity improvements are ongoing . TTS consolidated since 1 August 2019
Investor presentation December 2019 41 Key figures – profitability improved
7-9/19 7-9/18 Change 1-9/19 1-9/18 Change Orders received, MEUR 858 921 -7% 2,752 2,766 0%
Order book, MEUR 2,251 1,887 +19% 2,251 1,887 +19%
Sales, MEUR 901 805 +12% 2,669 2,394 +11%
Comparable operating profit, MEUR 68.3 57.8 +18% 190.0 172.5 +10%
Comparable operating profit, % 7.6% 7.2% 7.1% 7.2%
Items affecting comparability, MEUR -10.5 -3.3 < -100% -28.1 -43.4 +35%
Operating profit, MEUR 57.9 54.5 6% 162.0 129.1 +26%
Operating profit, % 6.4% 6.8% 6.1% 5.4%
Net income, MEUR 29.7 37.9 -22% 89.7 73.9 +21%
Earnings per share, EUR 0.46 0.58 -21% 1.39 1.13 +23%
Earnings per share, EUR* 0.56 0.63 -11% 1.68 1.71 -2%
* Excluding items affecting comparability and adjusted with related tax effect Investor presentation December 2019 42 Cash flow from operations improved
Cash flow from operations before financing items and taxes MEUR
120 112
100 88 86 81 80
60
40 41 40 31 27 17 20 12
0 -4 -20 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 Q3/19
Investor presentation December 2019 43 Net debt and gearing Strong financial MEUR 64.5% position 1,200 59.2% 1,000 60% 46.7% 46.4% 43.8% 178 800 36.0% Two bonds issued in Q3 in the 33.1% 40% 600 719 749 aggregate amount of EUR 250 million 578 622 625 400 503 472 20% 200 Interest-bearing net debt EUR 927 0 0% million (31 Dec 2018: 625) 2013 2014 2015 2016 2017 2018 Q3/19 . Average interest rate* 1.8% (2.4%) Net debt IFRS 16 Lease liability** Gearing-% . Net debt/EBITDA 2.8 (2.3) Maturity profile Net debt and gearing increased MEUR mainly due to IFRS 16 300 273 . Gearing without IFRS 16 250 approximately 52% 198 200 166 150 142 Total shareholders’ equity 150 125 100 EUR 1,434 million (1,426) 100 . Equity/total assets 36.0% (40.9%) 50 0 Balanced maturity profile 2019 2020 2021 2022 2023 2024 Later . EUR 150 million loans maturing in 2019
*Excluding on-balance sheet lease liabilities Investor presentation December 2019 44 **IFRS 16 transition adjustment 1 January 2019 ROCE improvement driven by higher profitability
12
10
8.6 8 7.1 6
4
2
0 2013 2014 2015 2016 2017 2018 1-9/19
ROCE-% Comparable operating profit margin %
ROCE (return on capital employed), last 12 months
Investor presentation December 2019 45 Outlook for 2019
Cargotec reiterates its outlook published on 8 February 2019 and expects its comparable operating profit for 2019 to improve from 2018 (EUR 242.1 million).
Investor presentation December 2019 46 We have increased EBIT* margins since 2013 through operational improvements
EBIT* 2013 EUR 264 million better EUR 133 million increase EBIT* Q2 2017 LTM** EUR 127 million gross profit in fixed costs EUR 258 million
1.0% -1.5% 1.6% -2.5% 1.9%
3.4% -0.3% 7.5%
4.0%
2013 Hiab equipment Service and Kalmar’s large Kalmar MacGregor R&D, Software, Other fixed Q2 2017 EBIT-%* software projects equipment equipment Sales network costs increases LTM business and Service EBIT-%* investments
*Excluding restructuring costs **LTM=Last 12 months (Q3/16-Q2/17) Investor presentation December 2019 47 Group wide EUR 50 million cost savings programme proceeding faster than expected
WHY Expected savings compared to 2016 cost level, MEUR . Investments in common systems as enabler 60 . EUR ~600 million addressable indirect cost base
WHAT 50 Including . Reductions in indirect purchasing spend (EUR 30 million), and business services more efficient support functions (EUR 20 million) 40 centre in Sofia
HOW 30 . Central procurement organization to drive indirect procurement cost and efficiency 20 . Establishing support function services in Sofia . Automation in Finance, HR, information management and 10 procurement
RESULTS 0 2017 2018 2019 2020 . EUR 30.7 million savings realised since the beginning of the programme in 2017 Indirect procurement Support functions
Investor presentation December 2019 48 We have established Cargotec Business Services in Sofia to improve support function efficiency by EUR 20 million
. Savings from consolidation, outsourcing of certain activities, labour arbitrage and robotics . Scope: Finance, Human Resources, Information Management and Indirect Procurement services primarily from Sofia, Bulgaria . Good progress in establishing Cargotec Business Services – Cargotec Business Service (CBS) centre in Sofia, Bulgaria officially opened 30 January 2018
Investor presentation December 2019 49 Targeting EUR 1.5 billion service and software sales in 3-5 years* Cargotec service sales totalled EUR 980 million in 2018 . Spare parts the biggest category, around 46% of total service sales . Maintenance around 31% of total service sales
Kalmar Hiab MacGregor
MEUR 2018 MEUR 2018 MEUR 2018 Service orders received 488 Service orders received 312 Service orders received 230 Service sales 449 Service sales 309 Service sales 222
6% 5% 5% 1% 11% 5%
11% 44% 8% 45% 17%
52% 23% 38% 29%
Spare parts Maintenance Spare parts Maintenance Installations Accessories Spare parts Maintenance Fleet management Upgrade projects Used equipment Running supply Projects * Target announced in September 2017 Cargo Boost RoRo conversions
Investor presentation December 2019 50 M&A strategy focusing on bolt-on acquisitions
Key acquisition criteria M&A focus by business area: • Contribution to 15% ROCE target Kalmar • Recurring business Expand service footprint and software • Increase the potential for services through larger installed base and offering increased presence • Group gearing long term target of 50% Hiab Expand geographical presence, service Interest-bearing net debt and gearing and product offering MEUR MacGregor 1,000 64.5% 80% 59.2% Focus on distressed assets and 800 927 60% 46.7% 46.4% 43.8% software and intelligent technology 600 719 36.0% 578 622 625 40% 400 503 472 200 20% 0 0% 2013 2014 2015 2016 2017 2018 Q3/19 Net debt Gearing-% Investor presentation December 2019 51 M&A in 2017
RAPP MARINE GROUP ARGOS INVER PORT SOLUTIONS
Strengthen MacGregor’s Hiab entrance to Brazilian Broaden Kalmar’s existing offering for the fishery and loader crane market service capabilities research vessel segment throughout Australia
Sales Sales Sales EUR 40 million EUR 6 million EUR 5 million in 2017 in 2017 in 2017 Around 30% of sales from services
Investor presentation December 2019 52 EFFER acquisition finalised in Q4 2018
Effer in brief Strategic rationale Transaction highlights
Global leader in the heavy Effer complements Hiab’s Enterprise value EUR 50 cranes segment loader cranes portfolio and million expands the offering in heavy 2018 sales around EUR 97 cranes Acquisition was closed on 6 million and operating profit November 2018 EUR 5 million Leverage Hiab’s global service network to boost Distribution network of over Effer service sales 100 dealers covering 60 countries globally Strenghthen Hiab’s position in Effer’s core market areas
Investor presentation December 2019 53 TTS product portfolio
Container, Bulk & Multipurpose & RoRo, Cruise & Navy Offshore Vessels Services Tank Vessels General Cargo
Investor presentation December 2019 54 Shaping the portfolio
Two divestments made during Q2/18
Divestments . Siwertell and Kalmar Rough Terrain Center . Both outside of Kalmar’s core areas of container ports, heavy industry and distribution
Investor presentation December 2019 55 Our target is to reach 10% EBIT
~1-2% ~10%
~0.5-1% ~0% ~0-1%
~1-2% Continuing Improve cost Growth in innovations efficiency, Kalmar & Kalmar’s (R&D investments) leveraging 7.3% Hiab large sales equipment projects and Service & growth MacGreqor Software equipment
2018 EBIT* EBIT target
Target announced in September 2017, target to be reached in 3-5 years *Comparable operating profit
Investor presentation December 2019 56 Steadily increasing dividend EUR 1.10 dividend per B share for 2018 Dividend to be paid in two EUR 0.55 instalments Calculated from EPS excl. restructuring costs, payout ratio for 2018 is 47%
2.50 2.21 2.05 1.95 2.00 1.66 51% 66% 1.50 49% 36% 1.11 1.05 1.10 0.89 50% 0.95 1.00 47% 0.80 0.55 0.50 0.42
0.00 2013 2014 2015 2016 2017* 2018 EPS (reported) Dividend Payout ratio
Investor presentation December 2019 57 Appendix 1. Largest shareholders and financials 2. Sustainability 3. Kalmar 4. Hiab 5. MacGregor
58 58 Largest shareholders 30 November 2019
% of shares % of votes % of shares 14.1 % 1. Wipunen varainhallinta Oy 14.1 23.7 2. Mariatorp Oy 12.3 22.9 3. Pivosto Oy 10.6 22.2 4. KONE Foundation 3.0 5.5 12.3 % 5. Ilmarinen Mutual Pension Insurance 2.4 1.0 Company 6. Varma Mutual Pension Insurance 1.8 0.8 Company 7. The State Pension Fund 1.2 0.5 60.0 % 10.6 % 8. Elo Mutual Pension Insurance 0.8 0.3 Company 9. Mandatum Life Insurance Company 0.8 0.3 Ltd. 3.0 % 10. Herlin Heikki Juho Kustaa 0.6 0.3 Nominee registered and non-Finnish 26.0 Wipunen varainhallinta Oy Mariatorp Oy holders Pivosto Oy KONE Foundation Others Total number of shareholders 24,629 Wipunen varainhallinta Oy is a company controlled by Ilkka Herlin, Mariatorp Oy a company controlled by Niklas Herlin’s estate and Pivosto Oy a company controlled by Ilona Herlin.
Investor presentation December 2019 59 Examples of our wide equipment offering
Reachstacker Straddle carrier Loader crane Truck-mounted forklift Cranes Marine self-unloaders
Terminal tractor Container handler Hooklift, Skiploader Taillift Hatch covers, Offshore load handling container lashings
Forklift truck Automatic stacking crane Recycling and forestry cranes Deck machinery Mooring systems
Investor presentation December 2019 60 Capex and R&D
Capital expenditure Research and development
120 100 3.0%
100 80 2.4% 80 60 1.8% 60 40 1.2% 40 20 20 0.6% 0 0 0.0% 2013 2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2018 Capex Customer financing Depreciation* R&D expenditure % of sales
Main capex investments: R&D investments focused on . Kalmar innovation centre in Ljungby, Sweden . Digitalisation . Investments in multi-assembly units in Kalmar and Hiab . Competitiveness, cost efficiency and eco-efficiency of products . Intangible assets, such as global systems to improve efficiency in operational activities and support functions *) Including amortisations and impairments
Investor presentation December 2019 61 Hiab’s share increasing in sales mix
22 % 16%
48 % 49% 2017 2018
33% 35% (33)
Kalmar Hiab MacGregor Kalmar Hiab MacGregor
Year 2017 figures have been restated according to IFRS 15 Investor presentation December 2019 62 Well diversified geographical sales mix
32% 31% 44% 49% 2017 2018
(33) 20% 24%
EMEA APAC Americas EMEA APAC Americas
Year 2017 figures have been restated according to IFRS 15 Investor presentation December 2019 63 Sales by geographical segment by business area 2018
12%
33% 49% 38% 42% 52%
46% 18% 10%
EMEA APAC Americas EMEA APAC Americas EMEA APAC Americas
Year 2017 figures have been restated according to IFRS 15 Investor presentation December 2019 64 Cargotec’s R&D and assembly sites
EMEA APAC
• Arendal, Norway (MacGregor R&D) • Chungbuk, South Korea • Averøy, Norway (Macgregor prod + R&D) (Hiab prod.) • Kristiansand, Norway (MacGregor R&D) • Tianjin, China (MacGregor prod.) • Dundalk, Ireland (Hiab prod. + R&D) • Bangalore, India • Witney, UK (Hiab prod.) (Kalmar prod. + R&D) • Whitstable, UK (MacGregor prod.) • Chennai, India (Navis–Kalmar R&D) • Zaragoza, Spain (Hiab prod.) • Ipoh, Malaysia (Bromma prod.) • Uetersen, Germany • Shanghai, China (MacGregor prod. + WS + R&D) (Kalmar prod. + WH) • Schwerin, Germany (MacGregor prod.) • Busan, South Korea • Stargard Szczecinski, Poland (MacGregor prod.) (Kalmar + Hiab prod.) • Singapore, (R&D) • Bispgården, Sweden (Hiab prod.) Americas • Lidhult, Sweden (Kalmar R&D) • Bjuv, Sweden (Kalmar prod.) • Ottawa, Kansas (Kalmar prod.) • Örnsköldsvik, Sweden • Oakland, California (Kalmar R&D) (MacGregor WS + WH + R&D) • Cibolo, Texas (Kalmar prod.) • Hudiksvall, Sweden (Hiab R&D) • Tallmadge, Ohio (Hiab prod.) • Helsinki, Finland (HQ) • Kaarina, Finland (MacGregor R&D) • Raisio, Finland (Hiab prod.) • Tampere, Finland (Kalmar WS + R&D)
Investor presentation December 2019 65 Comparable operating profit development
Kalmar Hiab MacGregor 180 12.0% 180 16.0% 70 10.0%
160 160 60 14.0% 8.0% 10.0% 50 140 140 12.0% 6.0% 40 120 8.0% 120 10.0% 4.0% 30 100 100
6.0% 8.0% 20 2.0%
80 80 10 6.0% 0.0% 60 4.0% 60 0 4.0% -2.0% 40 40 -10 2.0% 2.0% -4.0% 20 20 -20
0 0.0% 0 0.0% -30 -6.0% 2013 2014 2015 2016 2017 2018 Q3/19 2013 2014 2015 2016 2017 2018 Q3/19 2013 2014 2015 2016 2017 2018 Q3/19 LTM LTM LTM
Comparable EBIT EBIT-% Comparable EBIT EBIT-% Comparable EBIT EBIT-%
Investor presentation December 2019 66 Sales and orders received development
MEUR Kalmar MEUR Hiab MEUR MacGregor 2,200 1,600 1,400 2,000 1,400 1,200 1,800 1,200 1,600 1,000 1,400 1,000 800 1,200 800 1,000 600 800 600 400 600 400 400 200 200 200 0 0 0 2013 2014 2015 2016 2017 2018 Q3/19 2013 2014 2015 2016 2017 2018 Q3/19 2013 2014 2015 2016 2017 2018 Q3/19 LTM LTM LTM Sales Orders received Sales Orders received Sales Orders received Order book Order book Order book
LTM = Last 12 months Investor presentation December 2019 67 Gross profit development
MEUR
1,000 26.2 % 27.5 % 24.6 % 23.9 % 900 23.7 % 25.0 % 21.1 % 800 840 852 849 22.5 % 814 18.9 % 18.3 % 20.0 % 700 787 17.5 % 600 634 583 15.0 % 500 12.5 % 400 10.0 % 300 7.5 %
200 5.0 %
100 2.5 %
0 0.0 % 2013 2014 2015 2016 2017 2018 Q3/19 LTM
Gross profit, MEUR Gross profit-%
Investor presentation December 2019 68 Net working capital increased due to higher inventories and accounts receivable
MEUR 400 360 350
300 271 250
200 186 151 150 115 100 57 50
0 2014 2015 2016 2017 2018 Q3/19
Investor presentation December 2019 69 Cash flow from operations development
MEUR Cash flow from operations before financing items and taxes
400 373
350 315 300 253 250 239 204 200 181
150 126
100
50
0 2013 2014 2015 2016 2017 2018 Q3/19 LTM
Investor presentation December 2019 70 Income statement Q3 2019
Investor presentation December 2019 71 Balance sheet 30 September 2019
Investor presentation December 2019 72 Cash flow statement Q3 2019
Investor presentation December 2019 73 Sustainability
Investor presentation December 2019 74 Sustainability is a great business opportunity
We serve an industry, which produces the majority of emissions as well as GDP in the world - Inefficient industry with potential to improve Our vision to be the leader in intelligent cargo handling also drives sustainability - Increasing efficiency and life-time solutions We are in a position to be the global frontrunner, setting the sustainability standards for the whole industry - We are ready to shape the industry to one that is more sustainable
December 2019 75 Sea Freight Transport is by far the most sustainable transport mode in terms of emissions Compared to transportation of goods by trains, sea freight emits by trucks, sea freight emits by air cargo, sea freight emits ~2-3 times less emissions ~3-4 times less emissions ~14 times less emissions
Investor presentation December 2019 76 Sustainability is our competitive advantage
Sales account for around 21% of the total revenue in 2018: Significant R&D and digitalisation investments drive the growth of offering for eco-efficiency
Systems Efficiency for Emission Resources efficiency environmental industries efficiency efficiency
. Visibility to identify inefficient use of . Offering to support the operations in . Technology to enable fuel and . Service enabling the extended resources and fuel environmental industries emission efficient offering usage of products or new applications . Software and design system . Cargotec solutions for environmental . Products with features to decrease industries fuel usage and avoidance of . Product conversions and maritime hydraulic oil emissions modernisations
Investor presentation December 2019 77 Key to more sustainable cargo handling business is solution development
Waste in cargo handling business due to inefficiencies ~17 billion euros 19 mil CO2 in shipping industry ~2.5 mil barrels (1.8 mil CO2 equivalent tonnes) annually of fuel savings enabled by Cargotec port For moving equipment solutions during past 6 to 10 years empty containers
~31 900 CO2 of emissions from Cargotec eqv. tonnes factories annually
Investor presentation December 2019 78 Cargotec sustainability managed with clear policies, processes and KPIs on varying areas
. Cargotec is a supporter of UN Global Compact and other major international sustainability initiatives . We have a clear governance on sustainability issues with Board of Directors overview on the subject . Safety is our key priority and we have clear improvement program to further decrease our current IIFR rate of 6.7 . Focus on climate change and human rights risks in 2019
79 Performance highlights 2018
Permanent Code of 72% of all employees have All strategic suppliers were Supplier code of conduct Conduct panel and case conducted the code of taken into the sustainability sent to all strategic investigation process conduct e-learning tool self-assessment tool process suppliers
30% of the electricity used by Cargotec is generated from renewable energy sources
Offering for eco-efficiency 21% of total sales
17 products were added to our Offering for eco- efficiency portfolio
A renewed human rights risk assessment was conducted on Cargotec operations
Investor presentation December 2019 80 Kalmar appendix
Investor presentation December 2019 81 The current replacement market size for key terminal equipment is EUR 1 billion annually and the market is expected to double in the next decade Total Capacity MTEU The replacement market will 1,400 grow in coming years, as the 1,200 container terminal capacity has expanded significantly during 1,000 the last two decades. 800 600 Average lifetime of 400 type of equipment: 200 . STS - 25 yrs 0 . RTG -15 yrs . SC - 8-10 yrs 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 f2016 f2017 f2018 f2019 f2020 e1995 e1996 e1997 e1998 e1999 e2000 . RS/ECH/TT – 8 yrs
Replacement after lifetime of equipment Source: Drewry reports: Global Container Terminal Operators 2001-2016 Note: 1995-2000 capacity is estimation based on the assumption that the utilisation rate has been between 70- 72% in that period. 2016-2020 forecast based on Drewry’s Global container terminal operators report, published in August 2016 Investor presentation December 2019 82 Global container terminal operators – Most capacity expected to be added by Cosco
Global/international terminal operators' capacity development, 2018-2023 (MTEU)
0.0 20.0 40.0 60.0 80.0 100.0 120.0 140.0 160.0 China Cosco Shipping * PSA International Hutchison Ports APM Terminals DP World Terminal Investment Limited China Merchants Ports CMA CGM ** ONE *** NYK # MOL # K Line # Eurogate SSA Marine ICTSI Source: Drewry Maritime Research Evergreen * Cosco figure includes OOCL terminals Hyundai ** CMA CGM includes APL terminals *** International terminals of NYK, K Line and MOL are due to be combined as part of ONE merger HHLA # Japanese terminals only from 2019 onwards Yildirim/Yilport Hutchison figure includes HPH Trust terminals TIL figure does not include MSC/affiliated companies Bollore Ports Figures include total capacity for all terminals in which shareholding held (regardless of size of shareholding) Figures do not include capacity related to stevedoring operations at common user terminals and also exclude barge/river terminals Yang Ming Figures based on confirmed expansion plans only SAAM Puertos Some double counting occurs where joint ownership/management structures exist Figures for each operator do not include capacity of other operators in which stakes are held
2018 2023
Investor presentation December 2019 83 Global container throughput and capacity development
1400 90%
80% 1200 70% 1000 60%
800 50%
600 40%
30% 400 20% 200 10%
0 0% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 f2019 f2020 f2021 f2022 f2023 Throughput, MTEU Capacity, MTEU Utilisation rate
Sources: Investor presentation December 2019 84 Throughput: Drewry container forecaster Q3/19 Capacity: Drewry Annual Global container terminal review 2019 56% of global container throughput is expected to take place in APAC in 2019
Global container throughput expected to grow 2.6% in 2019 AMER 117mteu . APAC +3.0% (+13 mteu) (15% of total) . EMEA +2.6% (+6 mteu) . AMER +1.2% (+1 mteu)
62% of growth will come from APAC APAC 450 mteu EMEA 239mteu (56% of total) (30% of total)
Source: Drewry container forecaster Q3 2019
Investor presentation December 2019 85 Three alliances controlling about 80% of global container fleet capacity Shipping line Alliance/ Vessel sharing agreement (VSA) April 2017 Maersk 2M 2M MSC P3 (denied) CMA CGM China Shipping Ocean Three China Shipping/ UASC UASC NYK OOCL (acquisition ongoing) Grand Alliance Ocean Alliance Hapag-Lloyd G6 Alliance APL MOL New World Alliance Hyundai Cosco China Cosco Shipping K Line CKYH Alliance Yang Ming CKYH Alliance The Alliance Ocean Network Express Hanjin Evergreen Independent Hamburg Sud Total: 17 (9 after further • The arrows indicate changes, confirmed or planned, through M&A or JV over the last 18 months. Hanjin bankrupt. Hyundai isn’t consolidations) currently officially part of any alliance, but formed a cooperative relationship with 2M. • Ocean Network Express (ONE) launch April 2018. • COSCO Shipping’s planned acquisition of OOCL expected to completed by the end of June Sources: Drewry, Alphaliner, Cargotec • Analyse excludes Zim, PIL and Wan Hai Investor presentation December 2019 86 Ship sizes increasing dramatically
TEU • The largest containership in the fleet has nearly tripled since 2000
• The average size of new builds doubles between 2009 and 2014
Largest container ship Average newbuilding in world fleet delivered in year
Source: Drewry November 2015
Investor presentation December 2019 87 Hiab appendix
Investor presentation December 2019 88 Construction output forecast
Percentage point change vs last forecast YoY changes 2017 2018 2019 2020 2021 2017 2018 2019 2020 2021 NAM -0.1% 0.1% -0.4% -0.2% -0.1% NAM 1.3% 2.6% 0.3% 2.3% 2.2% SAM 0.2% 0.4% 0.5% -0.4% -0.7% SAM -3.4% -1.4% -0.4% 2.2% 2.7% NE 0.0% 0.0% -1.3% -0.3% -0.1% NE 2.8% 5.4% 1.7% 1.7% 1.9% UK 0.0% 0.0% -0.6% -0.6% -0.2% UK 7.3% 0.7% 1.6% 1.1% 1.6% DACH 0.0% 0.0% 0.0% -0.2% 0.0% DACH 2.9% 2.7% 2.2% 1.3% 1.2% BENELUX 0.9% 0.1% -0.6% -0.2% 0.0% BENELUX 4.0% 5.2% 4.5% 1.2% 1.5% MED 0.1% -0.7% 0.7% -0.4% -0.1% MED 3.4% 2.3% 2.9% 1.9% 2.0% EE -0.2% -0.8% 1.5% 0.1% -0.1% EE 4.5% 11.1% 5.8% 3.2% 3.0% MEA 0.2% 0.0% 0.3% -0.1% 0.0% MEA 2.0% -2.0% 0.2% 2.9% 3.9% APAC 0.0% 0.0% -0.7% 0.0% 0.1% APAC 3.8% 4.1% 3.8% 3.9% 4.2% Total 0.0% -0.1% -0.4% -0.1% 0.0% Total 2.7% 2.8% 2.3% 2.8% 3.1%
Source: Oxford construction output (All Output series are measured in Billions, 2015 Prices) Oxford Economics 10/2019, old data 6/2019) Investor presentation December 2019 89 Global truck volumes
Changes vs last Forecast YoY changes (vs. prev. year) 2 017 2 018 2 019 2 020 2 021 2 017 2 018 2 019 2 020 2 021 NAM 0.0% 0.0% 1.6% -1.6% -2.4% NAM 0.6% 31.1% 1.2% -16.9% -6.4% SAM 0.0% -0.5% 16.1% 6.0% 9.4% SAM 8.4% 19.9% 27.2% 1.7% 8.0% NE 0.0% 0.0% -5.2% -3.1% 0.3% NE 27.5% 4.6% -0.5% 1.0% 7.9% DACH 0.0% 0.0% 0.2% -0.1% -0.2% DACH 1.8% 12.6% -6.2% -4.5% -1.5% UK/IR 0.0% 0.0% 30.5% 13.7% 7.1% UK/IR 0.3% -11.1% 23.0% -12.1% -2.2% BENELUX 0.0% 7.2% -2.3% -4.1% -4.0% BENELUX 5.4% 14.5% -19.7% -3.0% 3.8% EE 0.0% -0.6% 1.9% -3.8% 1.6% EE -1.6% 27.9% 5.2% -5.9% 7.2% MED -0.7% 0.2% 0.5% 0.0% 1.0% MED 19.3% 9.8% -2.2% -8.5% 6.9% MEA 0.0% 0.4% -1.9% -1.0% -1.3% MEA -2.4% 3.4% -0.5% 5.4% 2.7% APAC 0.2% 0.1% 5.8% 3.3% -0.2% APAC 39.7% 6.6% -12.1% -11.9% -2.1% Total 0.2% 0.1% 5.3% 2.4% 0.3% Total 29.4% 9.9% -7.5% -10.9% -1.3%
Source: IHS truck registrations, Aug 2019 forecast, prev May 2019 Investor presentation December 2019 90 Operating Profit Bridge FY Actual 2018 vs 2017 (AER)
YOY Gross Margin change [excl Effer and RtM additions]= €(3.6)m €m
190
185
180 • Additional costs driven by supply chain challenges 20,0 • Some lower margins from drive to 175 • S&S investments grow Key Accounts – EMEA up • US maintenance growth 28,4 16& YOY in sales 170 • System investments: • Webshop 165 • Service management tool • Configure price quote tool 7,0 160 157.2 Effer trading for Nov-Dec, 5,0 offset by PPA adjustment 155 1,8 Route to Market additions 3,9 and integration costs in UK, Sweden, Germany 150 GM from 6.5% & France organic growth Higher costs in Stargard 8,8 145 and Dundalk driven by Higher factory costs supply chain inefficiencies FX headwinds reflect unstable supply 140 in FY18 vs FY17 from chain and related 5,4 USD, GBP, SEK, AUD, inefficiencies 0.4 0.3 3,5 134.5 135 CNY, NOK, JPY
0 FY17 Volume Transactional Factory Sales gross Warr / BD / Factory Sales One-offs Effer RtM FX FY18 FX variable margin Obs Ohds investments & Corp translation costs variance impact
Investor presentation December 2019 91 MacGregor appendix
Investor presentation December 2019 92 Merchant ships: Contracting forecast by shiptype (no of ships) Merchant ship types > 2000 gt excl offshore and misc, base case
Source: Clarksons September 2019 Investor presentation December 2019 93 Merchant ships: Deliveries forecast by shiptype (no of ships) Merchant ship types > 2000 gt excl offshore and misc, base case
Source: Clarksons September 2019 Investor presentation December 2019 94 Offshore mobile units: Contracting forecast by shiptype (number of units)
Source: Clarksons September 2019 Investor presentation December 2019 95 Offshore mobile units: Deliveries forecast by shiptype (number of units)
Source: Clarksons September 2019 Investor presentation December 2019 96 Shipbuilding – contracting ships >2000 gt/dwt
Investor presentation December 2019 97 Source: Clarkson Research, October 2019 Shipbuilding capacity and utilisation scenario
Source: Clarksons Research September 2019 Investor presentation December 2019 98 Shipping – The world fleet World fleet comprises currently roughly 97,000 ships
Source: Clarksons Research, September 2019 Investor presentation December 2019 99 World fleet development since 1986 World fleet continues to grow - ships getting younger and bigger
Investor presentation December 2019 100 We are capturing ”blue growth” opportunities
Seaborne Marine bio- Marine and Tourism Fishing Aquaculture Offshore Offshore Ocean logistics technology seabed mining oil and gas wind energy renewable energy
Traditional New New New New New Traditional New New Core Growth Growth Growth Growth Growth Core Growth Growth
Investor presentation December 2019 101 Disclaimer
Although forward-looking statements contained in this presentation are based upon what management of the company believes are reasonable assumptions, there can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. These statements are not guarantees of future performance and undue reliance should not be placed on them. The company undertakes no obligation to update forward-looking statements if circumstances or management’s estimates or opinions should change except as required by applicable securities laws. All the discussion topics presented during the session and in the attached material are still in the planning phase. The final impact on the personnel, for example on the duties of the existing employees, will be specified only after the legal requirements of each affected function/ country have been fulfilled in full, including possible informing and/or negotiation obligations in each function / country.
Investor presentation December 2019 102 103