Cargotec Corporation’s Financial Statements Review Q4 · 2 Cargotec Corporation’s Financial Statements Review 2008 Cargotec Corporation’s Financial Statements Review 2008 •

Cargotec Corporation’s Financial Statements Review

January–December 2008

Q4

2 Cargotec Corporation’s Financial Statements Review 2008

Cargotec Corporation’s Financial Statements Review 2008

• OrdersreceivedtotalledEUR3,769(4,106)million.Duringthefourthquarter,ordersreceivedwereEUR633(1,214)million.

• TheorderbookwasEUR3,054(2,865)million.

• Salesgrewby13percent,amountingtoEUR3,399(3,018)million.SalesforthefourthquarterwereEUR924(868)million.

• SalesforservicesgrewtoEUR871(757)million,representing26(25)percentoftotalsales.

• OperatingprofitexcludingrestructuringcostswasEUR192.8(203.1)millionwithEUR35.9(46.3)attributabletothefourthquarter.Operating

marginexcludingrestructuringcostswas5.7(6.7)percentand3.9(5.3)forthefourthquarter.

• OperatingprofitwasEUR173.7(203.1)millionwithEUR16.8(46.3)millionattributabletothefourthquarter.Operatingprofitincludes

EUR19millionofcostsfromtherestructuringprogramannouncedinSeptember.

• CashflowfromoperatingactivitiesbeforefinancialitemsandtaxestotalledEUR133.8(235.1)million.

• NetincomefortheperiodamountedtoEUR120.8(138.4)million.

• EarningspersharewereEUR1.91(2.17)withEUR0.14(0.45)attributabletothefourthquarter.

• Thenumberofpersonneltotalled11,826(11,187)attheendoftheperiod.

• TheBoardofDirectorswillproposetotheAnnualGeneralMeeting,thatofthedistributableprofit,adividendofEUR0.59pereachclass

AshareandEUR0.60pereachclassBshareoutstandingbepaid.

• InthecurrentuncertaineconomicsituationitisdifficulttoestimatethedemandforCargotec’sproducts.Thisisfurthercomplicatedby

possibleordercancellationsanddelays.ThepreconditionsforsalesgrowthexistinservicesandMacGREGOR.SalesofHiabandKalmarare

expectedtodeclinefrom2008.SignificantrestructuringmeasurescostingEUR35millionweredecidedonduring2008tocreateanew

supplyplatformandimproveprofitabilityinCargotec.Focusisontherapidimplementationofthesemeasures.ApproximatelyEUR16million

ofthesecostsremainfor2009.

Thefiguresinthisfinancialstatementsreviewareaudited.

Operating Environment

ThemarketsforloadhandlingequipmentwerestronginEurope

forthefirstpartoftheyearbutweakenedsignificantlyduringthe

secondhalfasaresultofageneralslowdowninconstruction-

relatedcustomersegments.IntheUnitedStates,demandforload

handlingequipmentwasslackthroughouttheyear.However,

thereareopportunitiesingovernmentbusinessasvarious

countriesarelookingforwaystoboosteconomicgrowth.InAsia

Pacific,growthremainedhealthy,withtheexceptionofJapan.

Themarketsforcontainerhandlingequipmentremainedhealthy

untilthelastquarter,duringwhichtheeconomicuncertainty

begantobereflectedincustomers’investmentdecisions.The

marketsforreachstackers,straddlecarriersandrubber-tyred

gantry(RTG)craneswereactive.Demandformediumandlight

forklifttrucksaswellasterminaltractorsinmaturemarkets

slackenedtowardstheendoftheyear.Portoperators’interestin

automationcontinuedwithseveralautomationprojectsin

simulationandplanningphase.

Themarketsformarinecargoflowsystemsandoffshoresolu-

tionswerestrongthroughouttheyear,whichcanbeseeninthe

highnumberofordersreceived.However,theturbulenceinthe

financialmarketsandlowershipcapacityutilisationsloweddown

newshiporderstowardstheendoftheyear.Marketuncertainty

wasincreasedbyspeculationrelatingtocancellationsofalready

placedshiporders.

Demandforservicesremainedfavourable,theeconomic

downturnhavingnosignificanteffectonactivity.Customersare

increasinglyinterestedinimprovingtheiroperationalflexibility.In

emergingmarkets,highusageratesofequipmentsupported

demandforservices.ServicedemandinEuropewashealthy.

IntheUS,weakeconomicenvironmentaffecteddemandfor

services.

Orders Received

Ordersreceivedin2008totalledEUR3,769(4,106)million.

Especially,theboominshipbuildingboostedtheordersreceived

byMacGREGORduringJanuary-September.Thevalueoforders

securedbyCargotecduringthefourthquarterwasdowntoEUR

633(1,214)millionreflectingthesharplyincreasedeconomic

uncertainty.

3Cargotec Corporation’s Financial Statements Review 2008

Hiab

Oftotalordersreceived,HiabaccountedforEUR818(985)million

whileitsshareofordersreceivedinOctober–Decemberwas

EUR157(254)million.MajorpartoftheordersHiabsecured

weresmallindividualorders,whichistypicalofitsoperations.

Ordersreceivedhavedeclinedasaresultofadropindemand

inconstruction-relatedcustomersegmentsintheUSandalsoin

Europeduringthesecondhalfoftheyear.

Duringthefourthquarter,HiabreceivedanorderforoverEUR16

millionfromtheIraqiMinistryofElectricity.Thisorderincludes95

loadercranesandcargobodiesassembledontrucks.Mostofthe

deliverieswilltakeplaceduring2009.Inaddition,Hiabreceived

anorderfor21hookliftsand9loadercranesfromtheFinnish

Armyandanorderfor100demountablesand20loadercranes

tobeinstalledbyHiabfromtheDutchFireBrigadeandHighway

Police.

InSeptember,HiabreceivedasignificantorderfromBAESystems

Inc.intheUSfor428loadercranesand32hooklifts.Deliveryof

theequipmentstartedduringthefourthquarterof2008,with

mostofthedeliveriestakingplaceduring2009.

Duringthesecondquarter,Hiabbookedanorderfor90

demountablestobedeliveredtotheUnitedKingdom’sMinistry

ofDefence.Furthermore,Hiabdelivereddemountablesanddeep

wastecollectionunitstotheOlympicVillageinBeijing,China.

Kalmar

Oftotalordersreceived,KalmaraccountedforEUR1,566(1,429)

millionwhileitsshareofordersreceivedinOctober–December

wasEUR348(346)million.Severalordersincludenavigation,

containerpositionverificationandremotemonitoringsystems

developedbyKalmar.Orderintakeforreachstackerswasona

recordhighlevelduring2008.

Duringthefourthquarter,Kalmarwasawardedanewfive-year

contracttosupplyRoughTerrainContainerHandlers(RTCH)to

theUSDepartmentofDefence.Thisnewcontractwasawarded

bytheTank-AutomotiveArmamentCommand(TACOM)and

isstructuredtohavemultipledeliveryorderreleasesoverthe

termofthecontract.Thevalueoftheinitialdeliveryorderswill

bearoundEUR100millionandtheequipmentwillbedelivered

during2009–2010.Thetotalvalueofthefive-yearcontractis

estimatedtobeoverEUR300million.

Duringthesecondhalf,Kalmaradditionallyreceivedseveral

ordersforE-One+rubber-tyredgantrycranes(RTG),straddle

carriersandterminaltractors.Duringthefirsthalfof2009,four

E-One+rubber-tyredgantrycranes(RTG)willbedeliveredtothe

EvyapPortinTurkeyandduringthethirdquarter,twoE-One+

rubber-tyredgantrycranes(RTG)tothePortofKoper’scontainer

terminalinSlovenia,eighttothePortofKumportinTurkeyand

fourtothePortofLivorno,Italy.

OrdersforstraddlecarrieswerereceivedfromtheUnited

Kingdom,GreeceandAustralia.Twoofthe15straddlecarries

beingdeliveredtoDPWorldSouthamptonandoneofthesix

beingdeliveredtoTilburyContainerServicesduringthefirsthalf

of2009willbefittedwithKalmar’snewhybridtechnology,while

theremainderarecapableofbeingupgradedtohybridsinthe

future.Duringthefirsthalfof2009,anadditional10straddle

carrierswillbedeliveredtothePiraeusPortAuthorityinGreece.

Fournewautomaticstraddlecarrierswillbebroughtintoservice

attheFishermanIslandscontainerterminalinBrisbane,Australia

bySeptember2009.Some42terminaltractorsweredeliveredto

thePortofSalalahinOmanbytheendof2008.

Duringthethirdquarter,Kalmarbookedasignificantorderfor

E-One+rubber-tyredgantrycranes(RTG)fromSouthAfrica.

Atotalof32RTGswillbedeliveredtoTransnetPortTerminalsin

CapeTown,SouthAfricastartinginthesummerof2009withthe

lastunitsarrivinginautumn2010.

Duringthefinancialperiod,Kalmaralsoreceivedanorderof

sevenE-One+rubber-tyredgantrycranes(RTG)and10reach-

stackersfromIndianArshiyaInternational.Thedeliveryofthis

equipmentstartedattheendof2008.

InJune,Kalmarreceivedanorderfor30terminaltractors,

sevenE-One+rubber-tyredgantrycranes(RTG)andfivereach-

stackersfromSociedadPortuariaRegionaldeCartagena(SPRC)

ofColombia.ThisequipmentwilloperateatSPRC’snewContecar

terminalinCartagena.Thesmallerequipmenthasbeendelivered

andtheRTGswillbeoperationalbyMay2009.

InMay,Kalmarreceivedanorderfor30straddlecarriersfrom

TransnetPortTerminals(TPT)ofSouthAfrica.Thedeliveriesto

TPT’scontainerterminalinthePortofDurbanbeganinthe

summer,withthefinalunitsarrivinginJanuary2009.

Orders received, MEUR 1-12/2008

Share,% 1-12/2007

Share,%

Change,%

Hiab 818 22 985 24 -17

Kalmar 1,566 41 1,429 35 +10

MacGREGOR 1,393 37 1696 41 -18

Internalordersreceived -9 -4

Total 3,769 100 4,106 100 -8


InMarch,Kalmarreceivedanorderfor48EDRIVE®straddle

carriersforEurogate’soperationsinGermany.Atotalof22units

havebeenorderedforEurogate’sCTBBremerhavencontai-

nerterminal,and13unitswillgotoEurogate’sCTHHamburg.

Another13unitswillbedeployedattheMSCGateBremerhaven

terminal,ajointventurebetweenEurogateandMediterranean

ShippingCompany.Equipmentdeliveriesbeganintheautumn

withthelastunitsarrivingatthebeginningof2009.Inaddition,

KalmarprovidedStevecoOywithtenKalmarEDRIVE®straddle

carriersfortheMussalocontainerterminalinKotka,Finland.

Duringthefirstquarter,KalmarreceivedE-One+rubber-tyred

gantrycrane(RTG)ordersfrom,forexample,Vietnam,Thailand,

India,BrazilandMorocco.Kalmarwilldeliver17ofthesecranes

toVietnamInternationalContainerTerminals’HoChiMinhCityfa-

cilitybetween2008and2010.LCMTCompanyLtd.fromThailand

orderedsixRTGsforitsterminalatthePortofLaemChabang.

ThecranesareduetofordeliverybyMarch2009.Kalmarwill

alsodeliver11RTGstoGatewayTerminalsIndiaatNhavaSheva

inJanuary2009.SouthAmerica’slargestcontainerterminal

operator,SantosBrasilS/A,ordered12RTGsfordeliverybyMarch

2009.Furthermore,SomaportoperatingintheportofCasablanca,

Morocco,orderedtenRTGstobedeliveredinearly2009.

InFebruary,Kalmarreceivedanorderfor22E-One+rubber-tyred

gantrycranes(RTGs)fromSouthAfricanTransnetLimited.This

equipmentwillbedeliveredin2008–2009forthenewPortof

Ngqura.InFebruary,KalmaralsosecuredanorderfromthePort

ofTacomaontheUSWestCoastforthesupplyofsevenstraddle

carriers.Thesewillbeusedincontainerhandlinginon-dockrail

facilitiesandwillbeequippedwithKalmar’smonitoringsystem,

speedinguptheiroperation.Themachinesweredeliveredduring

thesecondhalfof2008.

MacGREGOR

Oftotalordersreceived,MacGREGORaccountedforEUR1,393

(1,696)millionwhileitsshareofordersreceivedinOctober–

DecemberwasEUR129(616)million.Thedropinordersreceived

duringthefourthquarterreflectedtheexceptionalshipbuilding

boomofthepastcoupleofyearsclearlyslowingdown.Also

theglobaleconomicslowdownattheendoftheyearcreateda

situationofovercapacityinmanyshiptypes,whichhasleadship

ownerstoreconsidertheirinvestmentplans.

Duringthefourthquarter,MacGREGORreceivedordersworth

nearlyEUR30millionfromChinafortenshipsetsofcranes,

hatchcoversandfixedcontainerfittings.Thisequipmentwillbe

deliveredin2010–2011.

Duringthethirdquarter,MacGREGORreceivedsignificanthatch

cover,shipcraneandRoRoequipmentordersfromKorea,

Singapore,ChinaandJapan.Hatchcoverswillbe

deliveredfor39containerships.Anorderofnewshipcranesand

hatchcoversforfourheavy-liftvesselswasreceivedfrom

Singapore.RoRoequipmentandhoistablecardeckswillbe

deliveredfor16purecar/truckcarriersin2009–2011.

InAugust,theOffshoredivisionreceivedamajororderfortwoac-

tiveheavecompensatedoffshorecranesfromFinnishFinstaship.

Thecraneswilldeliveredduringthesecondhalfof2010.

Duringthesecondquarter,MacGREGORobtainedextensivehatch

coverandRoRoequipmentorders,mainlyfromKoreaandJapan.

Thehatchcoverordersareforalargenumberofcontainerand

bulkvesselstobedeliveredin2009–2012.TheRoRoequipment

ordersincludethedesignandmanufactureofRoRoequipment

aswellashoistablecardecksforfourdeep-seaConRos(vessels

carryingbothcontainerandRoRocargo).Theequipmentwillbe

deliveredin2010–2011.

InJune,MacGREGORsignedacontracttosupplyself-loadingand

unloadingcementhandlingsystemsforthreecementcarriers.

Deliveriesofthesystemswillbeginduringsummer2009.

InMay,theOffshoredivisionreceivedacraneorderfromthe

US-basedEdisonChouestOffshore.Thecraneswillbedelive-

redbythefirstquarterof2009.Furthermore,alargenumberof

orderswerereceived,inparticularfordavits,fordeliveryduring

2008–2009.

Duringthefirstquarter,MacGREGORreceivedalargenumberof

shipcraneandhatchcoverorders,mainlyfromChinaandKorea.

MacGREGORwilldeliveratotalof276bulkhandlingcranesfor

vessels,tobedeliveredtoshipownersinGermany,Singapore,

ChinaandKorea.MacGREGORalsoagreedtodeliverhatchcovers

for70containervessels,120bulkvesselsand41generalcargo

ships.Theequipmentwillbedeliveredin2009–2011.

InMarch,MacGREGORreceivedamajorbulkhandlingequip-

mentorderfromtheTaiwanPowerCompanyforcoal-handling

equipment.MacGREGOR’sSiwertellbulkhandlingsystemfeatures

atotallyclosedconveyingsystemthatlimitstheamountofcargo

dustreleasedintotheair.

InMarch,MacGREGORalsoreceivedanorderfor30shipsetsof

tankercranesforaChineseshipyard.Provisionandhosehand-

lingcraneswillbedeliveredin2008–2010fortankersorderedby

Turkish,Norwegian,RussianandCypriotshipowners.


InJanuary,MacGREGORreceivedRoRoequipmentordersfor12

purecar/truckcarriers(PCTCs).Theseordersincludehoistable

cardecksforfourvesselsthatwillbebuiltintheKoreanHyundai

HeavyIndustriesshipyardanddeliveredduring2009–2010.

Additionally,theordersincludethedesignanddeliveryofkey

componentsforeightPCTCsunderconstructioninChina.

Cargotec Services

Theservicesmarketcontinuedtobeactive,whichwasreflected

inthedemandformaintenance,modernisationcontracts

andspareparts.Maintenancecontractswerereceivedfrom

Europeanaswellasemergingmarketcustomersinfor

exampleIndia,RussiaandAfrica.Cargoteccontinuedtoenhance

itsservicenetwork.

Anorderforannualmaintenanceofsome600loadercraneswas

receivedfromElectricitéRéseauDistributionFrance.

Themarketforshipconversionswasveryactiveandseveral

orderswerereceivedfordeliveryduring2008–2009.However,

theeconomicuncertaintysloweddowndemandduringthe

secondhalf.Thehatchcoverconversionorderreceivedfrom

EverlastShippingS.A.inGreeceinSeptemberwascancelled.

ContractsreceivedduringMayincludeoneforthesupplyof

electricallydrivenhoistablecardecksforFinnlines’twoRoRo

vessels,aswellasacontractfortheconversionofavessel’s

controlsystems.

InMay,afive-yearoperationandmaintenancecontractfor

rubber-tyredgantrycranesandreachstackerswassignedwith

ArshiyaInternationalinMumbai,Indiaandathree-yearleasing

andfullmaintenancecontractforreachstackersintheportof

Gothenburg,Sweden.

Additionalcontractsincludeafive-yearfullmaintenancecontract

inAprilonfourship-to-shorecranesdeliveredtotheportof

Vuosaari,Finland.Anothercontractinthesameportcoversthe

maintenanceofstraddlecarriers,terminaltractorsandreachst-

ackers.

InMarch,afive-yearservicecontractwassignedwiththe

Norwegiancompany,NorsteveOslo,coveringthemaintenance,

sparepartsandrepairsoffivestraddlecarriersattheSjursøya

containerterminalinthePortofOslo.

Duringthefirstquarter,amajormaintenancecontractforship

unloaderswasreceivedfromthePhilippines.

Sales

Cargotec’ssalesgrewby13percentandtotalledEUR3,399

(3,018)million.Salesderivedfrom2008acquisitionswere

EUR32million.Salesgrowthisaresultofincreaseddelivery

volumesinKalmarandMacGREGORandgrowthinservice.Sales

growthwasstrongestinAsiaPacific.

SalesforthefourthquarterwereEUR924(868)million.Hiab’s

salesamountedtoEUR216(244)million,Kalmar’sEUR413(364)

millionandMacGREGOR’sEUR298(261)million.Hiab’ssales

declinedduetotheweakenedmarketinEuropeduringthe

secondhalfoftheyear.Kalmar’sandMacGREGOR’ssalesgrewas

aresultofstrongorderintakeandincreaseddeliveries.

Salesfromservicesincreasedby15percentyear-on-yearand

amountedtoEUR871(757)million,representing26(25)percent

oftotalsales.Thisgrowthwasboostedbystrongdemandfor

sparepartsandmaintenanceagreements.Servicesaccounted

for23(17)percentofJanuary–DecembersalesatHiab,29(30)

percentatKalmar,and23(25)percentatMacGREGOR.

Order Book

Cargotec’sorderbooktotalledEUR3,054(2,865)milliononDe-

cember31,2008.Oftheorderbook,HiabaccountedforEUR164

(260)million,KalmarEUR704(660)million,andMacGREGOREUR

2,187(1,946)million.OrdercancellationsbookedinMacGREGOR

inthefourthquartertotalledEUR119million.

Order book, MEUR 31.12.2008

Share,% 31.12.2007

Share, %

Change,%

Hiab 164 5 260 9 -37

Kalmar 704 23 660 23 +7

MacGREGOR 2,187 72 1,946 68 +12

Internalorderbook -1 -1

Total 3,054 100 2,865 100 +7

Sales, MEUR 1-12/2008Share,

% 1-12/2007Share,

%Change,

%

Hiab 907 27 931 31 -3

Kalmar 1,515 44 1,343 44 +13

MacGREGOR 985 29 748 25 +32

InternalSales -8 -4

Total 3,399 100 3,018 100 +13


Financial Result

Cargotec’sfinancialresultreflectsayearoftwoverydistinct

halves,inwhichthefirsthalfwascharacterisedbysoaring

demand,whichthenplummetedduetotheglobalfinancialcrisis

andslowingmarketsespeciallyinHiab.

Cargotec’soperatingprofitfor2008totalledEUR173.7(203.1)

million.TheoperatingprofitincludesEUR19millionofcosts

andassetwrite-downsbookedinthefourthquarterfromthe

restructuringactionsinitiatedinSeptember.The2007comparison

operatingprofitincludesthecostofEUR18millioninKalmarbusi-

nessarearelatedtoacontainerspreaderinspectionandrepair

programmebookedinthefourthquarter.

Excludingrestructuringcoststheoperatingprofitfor2008was

EUR192.8(203.1)million,representing5.7(6.7)percentofsales.

TheoperatingprofitincludesaEUR8.3(9.9)millioncostimpact

fromthepurchasepriceallocationtreatmentofacquisitionsand

EUR9millionincostsfromtheOntheMovechangeprogramme.

OperatingprofitforthefourthquarterexcludingtheEUR19mil-

lionrestructuringcostsandwrite-downswasEUR35.9(46.3)milli-

on,equalto3.9(5.3)percentofsales.HiabaccountedforEUR3.7

(19.1)millionofthefourthquarteroperatingprofit,KalmarforEUR

12.1(26.9)million,andMacGREGORforEUR30.7(22.3)million.

OfCargotec’sbusinessareas,MacGREGORimproveditsprofitabi-

lityfromthepreviousyear,recordingarecordresultforthefinal

quarter;majorbusinessgrowthhasbeenachievedduringthelast

twoyears,alongsideanimprovementinprofitability.

Kalmar’soperatingprofitfortheyearincludesasignificant

amountofexpensesduetocostoverrunsinprojects.Duringthe

year,projectcostprovisionsofEUR16millionwerebookedinthe

businessarea’soperatingprofit:EUR4millionforthefirstquarter,

EUR5millionforthethirdandEUR7millionforthefourth.

Capacityutilisationrateswereloweredbyamajorslowdownin

theEuropeanmarketduringthethirdquarter,clearlyerodingthe

profitabilityofHiabinthesecondhalfoftheyear.Hiab’soperating

profitwasfurtherburdenedbytheslowerandmore-expensive-

than-expectedramp-upofHiab’scomponentplantextensionin

Narva,Estonia.

InbothHiabandKalmar,rawmaterialandmaterialcosts

continuedtoriseinthesecondhalfwhich,alongsidefaltering

demand,affectedprofitability.Clearsignsoffallingcosts,dueto

reductionsinrawmaterialprices,andlowercapacityutilisation

ratesamongsubcontractors,onlyemergedattheveryendofthe

year.

Duetoweakeningmarkets,Septembersawtheinitiationofa

restructuringprogramme,theoriginalreductionforecastsof700

employeesbeingincreasedtoalmost1,000.Thesemeasures

wereaimedatadjustingcapacityinHiabtotheprevailingmarket

situationandimprovingbothHiab’sandKalmar’sprofitability.

Moreover,anannualprofitabilityimprovementofaroundEUR

25millioninadditiontocapacityadjustmentsisbeingsought

throughthecostsavingprogramme.Therelatedcostsandwrite-

downsareestimatedatapproximatelyEUR35million.Ofthese,

EUR19millionwasbookedinthefinalquarterof2008,including

EUR3millioninwrite-downs.Theremainderisexpectedtoincur

inearly2009.

Netincomefor2008wasEUR120.8(138.4)millionandearnings

pershareEUR1.91(2.17).

Balance Sheet, Financing and Cash Flow

Cargotec’snetworkingcapitalgrewand,byDecember31,2008,

amountedto324(253)million.Capitalremainedemployedin

componentsandunfinishedproducts.Ontheotherhand,

advancepaymentsreceivedasorderconfirmationsfrom

MacGREGOR’scustomershadapositiveimpactonnetworking

capital.AdvancesreceivedtotalledEUR420(244)millionatthe

endoftheyear.TangibleassetsonthebalancesheetwereEUR

284(254)millionandintangibleassetsEUR754(751)million.

Cashflowfromoperatingactivitiesbeforefinancialitemsand

taxeswasEUR133.8(235.1)million.InJanuary–December,the

dividendpaymenttotalledEUR66.6(63.8)millionandacquisitions

amountedtoEUR46.5(172.5)million.NetdebtwasEUR478(326)

milliononDecember31,2008,includingEUR555(488)millionin

interest-bearingdebt.Thetotalequity/totalassetsratiowas33.0

(38.3)percentwhilegearingincreasedto55.3(36.3)percent.

Cargotec’sfinancingstructureishealthy.Interest-bearingdebt

consistsmainlyoflong-termcorporatebondsmaturingfromthe

year2012.OnDecember31,2008,CargotechadEUR635million

ofunusedcreditfacilities.

Returnonequityforthefinancialyearwas13.7(15.6)percentand

returnoncapitalemployedwas12.7(16.8)percent.


New Products and Product Development

In2008,Cargotec’sresearchandproductdevelopment

expenditurewasEUR47.0(46.4)million,representing1.4(1.5)

percentofsales.

InApril,CargotecopenedanengineeringcentreinPune,India,

providingengineeringresourcesinemergingmarketsinsupport

ofproductdevelopmentthatbetterrespondstolocalneeds.

Theengineeringcentrehasbeenestablishedasaresourcepool

forCargotecR&Dcentresaroundtheworld.Itcoversvarious

engineeringactivitiesfromdraftingtostructuralanalysisaswell

assoftwareengineering.Theunitemployedalmost40engineers

attheendoftheyear.

InSeptember,Hiabexpandeditscraneofferingwithasolution

thatfulfilsthenewEU-standardandenablesusingtruck-mounted

cranestoliftpersonnelbaskets.

Hiabintroducedanewautomaticloadcoveringsystemtobe

usedwithdemountableunitswhentransportingwasteand

recyclingmaterials.

Duringthefirstquarter,Hiabopenedastate-of-the-artcrane-

testingcentreatitsloadercraneproductionfacilityinHudiksvall,

Sweden.ThecentreoffersHiabandotherbusinessareasthe

opportunitytotestmoreandlongercranesandcomponentsas

wellasensuringthattestingismoreprecisethanbefore.

Kalmarlaunchedin2008theProFuture™conceptencompassing

allofitsenvironmentallyfriendlyequipment.Thisequipmentwill

beratedagainstfiveecologicaldecision-makingdrivers:sourceof

power,energyefficiency,emissions,noisepollutionandrecycla-

bility.

ThefirsttwoProFuture™solutionslaunchedwereanAC

electricalforklifttruckforemptycontainerhandlingandahybrid

straddlecarrier.Kalmarreceivedthefirstorderforahybrid

straddlecarrierduringthethirdquarter.TheseProFuture™

solutionswerefollowedinthethirdquarterbyavariablespeed

rubber-tyredgantrycraneandavariablespeedelectricstraddle

carrier.Duringthefourthquarter,Kalmarintroducedanadditional

twonewProFuture™solutions:anautomaticstackingcraneand

aship-to-shorecranewithregenerativeenergysource.

Duringthefirstquarter,Kalmarlaunchedanew,fully-automated

shuttlecarrierthatisabletopick,placeandtransportcontainers

betweenship-to-shore(STS)andyardstackingcraneswithouta

driver.ThenewKalmarAutoshuttle™ensuresthecostefficiency,

productivityandflexibilityofportoperations,particularlyinthe

verybigportsofthefuture.

During2008,Kalmarintroducedanewmediumrangeterminal

tractorofferingbetterergonomicsanddrivercomfortaswellas

lowernoiselevelsthanearliermodels,alsoanelectricforklift

truckwaslaunchedinthemediumliftrange.

MacGREGORcontinuedtodevelopelectronicallyoperatedcargo

handlingsolutionsandanewshipcranecontrolsystem.The

Offshoredivisionfocusedonthedevelopmentofdeckequip-

mentenablingtheuseofcranesindifficultweatherconditions

andwhenoperatingindeepwaters.InSeptember,MacGREGOR

signedthefirstcontracttodelivertotallyelectrically-drivensetsof

RoRoequipmenttotwopurecar/truckcarriers.

InFebruary,MacGREGORsignedanagreementwiththeUSNavy

onthedevelopmentofaship-to-shipvehicletransfersystem.

Withthehelpofthissystem,largevehiclescanbetransferred

fromoneshiptoanotherwhiletheshipsareinmotion.Theproto-

typeofthesystemwillbedeliveredbytheendof2009.

Capital Expenditure

Cargotec’scapitalexpenditurefor2008,excludingacquisitions

andcustomerfinancing,totalledEUR76.8(53.2)million.Invest-

mentsincustomerfinancingwereEUR35.9(37.5)million.

ThedecisionwastakentoconcentrateHiab’scranemanufacture

inEuropeinthreefactories,entailingtheclosureofproduction

attheSaloplantinFinland.Afurtherdecisionwastakentowind

downthemanufactureoftruck-mountedforkliftsinOhio,USA,

andfocusproductioninCargotec’scommonproductionunitin

Kansas,USA.

InApril,Cargotecformedasubsidiary,CargotecPortSecurity,

todevelopenhancedcontainersecuritysolutions.Cargotechas

beenexploringandinvestingintheareaofradiationdetectionin

containersecurityforthepasttwoyears.Ithasenteredintoan

exclusiveglobaltechnicallicensingagreementwiththeUS-based

InnovativeAmericanTechnology,andhassuccessfullyfieldtested

spreader-mountedradiationdetection.

Duringthesecondquarter,Hiabinitiatedtheextensionofatail

liftproductionplantinOborniki,Poland.Theprojectwas

completedduring2008.InKorea,Hiabinvestedinanew

paintinglineattheloadercranesproductionunit.Anotherproject

wasfinalisedinRaisio,Finland,resultinginamajorincreaseinthe

productioncapacityofdemountablesystemsduetotheimple-

mentationofamorecompetitiveproductionprocess.

Duringthesecondquarter,Kalmarstartedtoexpandits

productionfacilityforrough-terraincontainerhandlingequipment

inCibolo,Texas,USAaswellasinitiatinganexpansionofcapacity


inIpoh,Malaysiaforcontainerspreaders.Investmentsinthe

firstquarterincludeexpandingitspresenceintheAmericasby

openinganewsalescompanyinMexicoaswellasanewservice

unitinZeebrugge,Belgium.

InMarch,MacGREGORopenedanewoffshoreequipment

productionunitinTianjin,China.Thenewunitalsoenables

productionoptimisationandefficiencyimprovementsinthe

offshoreproductionunitsofNorwayandSingapore.Partof

offshorecranesproductionweremovedfromNorwayto

Singaporetomakeroomfortheincreasedproductionofbigger

sizecranesinNorway.

On the Move change programme

InJanuary,CargotecannouncedthelaunchofanextensiveOn

theMovechangeprogrammeaimingataprofitabilityimprove-

mentofEUR80–100million.Thechangeprogrammeaimstoform

abasisforprofitablegrowththroughimprovedcustomerfocus

andefficiency.Theprojectsinthefirstphasehavefocusedon

streamliningsupportfunctionsandcompanystructureaswellas

initiatingITprojectsthatimproveefficiency.InFinland,Sweden,

SingaporeandUSA,operationsbeganinCargoteccountrycom-

panies.

InordertoimproveclosenesstocustomersHiab,Kalmarand

MacGREGORchangedtheirstructuretowardsmorecustomer

orientedorganisationsduringthereportingperiod.

Duringthesecondhalf,thefocuswasondevelopingtheglobal

supplyfootprintclosertocustomersaswellastowardslower

costenvironments.Forthisimplemention,Cargotecestablished

acommoncorporatelevelSupplyorganisation,whichisrespon-

sibleforsourcingandsupplyforthebusinessareas.

ThefirstjointsupplychainprojectsareproceedinginChina

andEstonia.TheproductioncapacityinShanghai,Chinawillbe

doubled.TheexpansionwillincludemovingHiab’sassemblyunit

tothesamesiteastheexistingKalmarfacility.Thecapacityand

productivityoftheproductionunitinNarva,Estonia,acquiredin

2007,hasbeenupgraded.Aspartoftheactionstoimprovethe

supplychain,Cargotecisplanningtoestablishanewassembly

factoryinPolandmainlyforKalmarequipment.

Acquisitions

DuringJanuary–December,Cargoteccompletedeightacquisi-

tions,ofwhichfourwereinHiab'sbusinessarea.

InordertostrengthenitsR&Dcapabilities,Cargotecacquired60

percentofIdeaDesigning&ConsultingS.r.l.inMassa,Italy.The

companyemploystenpeopleinproductdesign.

InOctober,Kalmaracquired80%oftwoItalianservice

companies,CVSTechnoportsS.r.l.andCVSServiceS.r.l.Subse-

quenttothetransaction,thecompaniesworkunderthename

OfficineCargotecFerrariandthecompaniesfocusondeveloping

theserviceofferingtowardscontainerandmaterialhandlingcus-

tomersinItaly.Thetwocompanies’combinedsalesturnoverin

2007wasapproximatelyEUR8millionandthecompaniesemploy

65people.

InAugust,KalmarsignedanagreementtoacquireArgentina-

basedEquiposyServiciosparaTerminalesyPuertosSRL.The

companyhasbeenKalmar’sdealerforArgentina,Uruguayand

Paraguay.Inadditiontonewequipmentdistribution,thecompany

providesequipmentcommissioning,technicalandsparepart

support,andequipmentrepairandrefurbishmentinSouthAmeri-

ca.Thecompany’ssalesin2007werearoundEUR1millionandit

employs17people.

InJune,Hiabconcludedanagreementtoacquirethebusinessof

along-termdistributoroftailliftsinNewZealand.Inadditionto

tailliftsales,thebusinesscomprisesinstallation,repairs,mainte-

nanceandsparepartssales.

AttheendofMarch,Hiabconcludedanagreementtoacquire

theoperationsoftheSouthAfricancompanyBowmanCranes

(Pty)Limited,Hiab’slong-termagentintheregion.Thiscompany

supplies,installsandservicestruck-relatedloadhandlingequip-

ment.In2007,itssaleswereapproximatelyEUR18millionandit

employs70people.

InFebruary,Hiabsignedanagreementtoacquire70percentof

theoperationsofanAustraliancompany,O’Leary’sMaterial

HandlingServicesPtyLtd.,theleadingsupplieroftailliftsin

WesternAustralia.Thecompanyemploys24peopleandhad

salesofapproximatelyEUR2.6millionin2007.

InFebruary,HiabalsoagreedtoacquireUK-basedDelEquipment

(UK)LimitedandUS-basedUltronLiftCorp.Bothofthesecompa-

niesmanufacturetaillifts.Theaggregatesalesofthecompanies

in2007wereapproximatelyEUR23millionandthecompanies

employ164persons.


InApril,MacGREGORsignedanagreementtoacquireUS-based

PlatformCraneService,Inc.Thesalesofthecompanyin2007

totalledUSD16millionandthecompanyemploys105persons.

Employees

OnDecember31,2008,Cargotecemployed11,826(11,187)

people.Duetotherestructuringmeasures,thenumberof

employeesdeclinedby370peoplemainlyinFinlandandSweden.

Hiabemployed4,308(4,418)people,Kalmar4,766(4,459),and

MacGREGOR2,577(2,223).Theaveragenumberofemployees

during2008was11,777(10,276).

OfCargotec’stotalemployees,13(14)percentwerelocatedin

Finland,20(22)percentinSwedenand30(30)percentintherest

ofEurope.NorthandSouthAmericanpersonnelrepresented11

(11)percent,AsiaPacific24(22)percentandtherestoftheworld

2(1)percentoftotalemployees.15(15)percentofthepersonnel

werefemaleand85(85)percentmale.3(3)percentofCargotec’s

totalemployeesworkedparttimeand97(97)percentfulltime.

SalariesandremunerationstoemployeestotalledEUR387(356)

millionforthefinancialperiod.

Asaresultoflowerdemandandprofitability,Cargotecinitiated

restructuringmeasuresinSeptember,mainlyinWesternEurope

andNorthAmerica.Thesemeasuresaimatadjustingcapacityin

HiabtotheprevailingmarketsituationandimprovingHiab’sand

Kalmar’sprofitability.Thenegotiationsendedbytheendofthe

yearresultedinareductionof954employees:271inFinland,

241inSweden,117intheUSA,91intheNetherlandsandatotal

of234inothercountries.Hiabsaw635employeereductions,

Kalmar309andcorporatefunctions10.

Restructuringcontinuedaftertheendofthefinancialyear,dueto

thefurtherweakeningofthemarkets.

Implementationofthenewpeoplestrategy,approvedby

Cargotec’sBoardin2007,wasenhancedinthereportingperiod.

Specialfocusareasincludedsupportforemployeeandchange

management,thedevelopmentofleadershipskillsandhuman

resourcescompetencedevelopment,alongsidecommittingthe

besttalents.Duringthereportingperiod,auniformoperating

modelandaglobalmatrixorganizationwerecreatedforhuman

resources(HR)managementinlinewiththeOnetheMove

changeprogramme.Thecomprehensiveintroductionofshared

HRmanagementprocessesandtoolswasreinforcedglobally.

Additionally,Cargotec’skeyHRpolicieswererenewedduringthe

year.

Environment

Cargotec’senvironmentalpolicydefinestheenvironmental

principles.ThemainenvironmentaleffectsofCargotec’sopera-

tionsarerelatedtotheuseofitsproducts.Forthisreason,the

Companyfocusedonindentifyingproduct-basedenvironmental

perspectivesin2008.

In2008,Cargotecintroduceditsnewsubcontractorcriteriain

whichenvironmentalsafety,occupationalhealthandsafetyand

qualityissueshavebeentakenintoaccountmoreextensively

thanbefore.

Cargotec’sstrategicbusinessdevelopmentgoalssupport

thecreationofholistic,sustainable,long-termsolutionsfor

customers.Inproductdevelopment,environmentalconside-

rationsformanintegralpartofplanningandmanufacturing.

Intheservicebusiness,thefocusisonextendingproductlife

cycleswhileanextensiveservicenetworkhelpsupholdefficient

operatingcharacteristics.Inadditiontoproductdevelopment

andservices,Cargotecisseekingtotrainitscustomerstouse

Cargotecequipmentsothatsafetyandenvironmentalmatters

reachanoptimallevel.

Energyefficiency,safetyandthepreventionofoilleakagesrepre-

sentkeyfocusareasinCargotec’sproductdevelopment.In2008,

Cargotecdeterminedaclearenvironmentalcriterionforenergy

efficiency,accordingtowhichitundertakestoreducetheuse

offossilfuelsby10percentinitsequipmentoverthenext6–10

years.Amajorstepwastakeninenvironmentalimpactassess-

mentwhenKalmar,partlyasaresultoftheaforementioned

commitment,launcheditsProFuture™environmentalcriteria.

Themostsignificantenvironmentaleffectsassociatedwith

Cargotec’sprocessesarerelatedtothoseoriginatingfromthe

operationsofthevariousbusinessunitsaswellastransportation

andcommutingtoandfromwork.ThecertifiedISO9001andISO

14001qualityandenvironmentalmanagementsystemsform

thebasisofCargotec’senvironmentalmanagement,andregular

internalandexternalauditsandmanagementauditsareaimedat

monitoringtheachievementoftherelatedobjectives.

Cargoteccontinuedtobuildcertifiedmanagementsystemsinto

itsproductionunitswiththeaimofcreatinganoperational

modelthathelpstoidentifythemostimportantenvironmental

effectsandrespondtotheminallunits.EightofHiab’s16

productionunitsandtwoofitssalescompaniesapplyenviron-

mentalmanagementsystemscertifiedunderISO14001.These

systemscoverapproximately80percentofthesalesofHiab’s

productionunits.SixofKalmar’ssevenproductionunitsapply

certifiedenvironmentalmanagementsystems,thesesystems

10CargotecCorporation’sFinancialStatementsReview2008Cargotec Corporation’s Financial Statements Review 2008

coveringalsoapproximately80percentofthesalesofKalmar’s

productionunits.MacGREGORcommissionsmostofitspro-

ductsfromselectedpartnersindependentlyresponsiblefor

theirproductionprocesses.Operationalguidelinesrelatedtothe

managementofenvironmentalissuesareincludedinthequality

systemsofmostMacGREGORunits.

Furthermore,anextensiveenvironmentalassessmentwas

conductedin14productionunitsinaccordancewithaprogram-

meintroducedin2007.Thisinvolvedtheevaluationofmanage-

mentsystems,facilitiesandproductionfromtheviewpointof

theirenvironmentaleffectswhiletakingintoaccounttheunits’

operatingenvironment.Extensivesoilcleaningworkwascarried

outintwoCargotecsitesin2008asaresultofindustrialactivities

thathadtakenplaceinthosesitesearlier.

Internal control and risk management

Cargotec’sPresidentandCEOandtheExecutiveBoardare

responsibleforthemethods,implementationandsupervisionof

riskmanagement,andreportonthesetotheBoardofDirectors.

TheCorporateriskmanagementfunctionisresponsiblefor

thedevelopmentofcomprehensiveriskmanagement.Thisis

supportedbythecreationofCorporate-wideriskmanagement

principles,practicesandriskreports,thedevelopmentoftools

andtheapplicationandadoptionofthesetools.Businessareas

andunitsareresponsibleforassigning,managingandreporting

therisksinvolvedintheirownoperations.TheCorporateTreasury

functionmanagesfinancialriskscentrally.Cargotechasaninter-

nalauditingfunctionwhichisresponsibleforinternalcontroland

businessriskauditing.TheInternalAuditunitoperatesunderthe

supervisionofthePresidentandCEOandtheBoardofDirectors’

AuditCommittee,reportingregularlytotheAuditCommitteeon

itsoperationsandauditresults.

Cargotecbeganthesystematicdevelopmentofitsinternal

controlin2007.Cargotec’sBoardofDirectorsapprovedthe

internalcontrolpolicyin2008.Responsibilityforinternalcontrol

atCargotecisdividedintothreetiers.Linemanagement

isprimarilyresponsibleforinternalcontrol.Itisaidedby

Corporatesupportfunctions,whichdefinepoliciesandinstruct

onandsuperviseriskmanagement.Internalandexternalaudits

formthethirdtier,theirtaskbeingtoensurethatthefirsttwo

tiersarefunctioningeffectively.AsCargotecbecomesmore

harmonised,itscapabilitiesforthedevelopmentandimplemen-

tationofriskmanagementwillbefurtherimproved.Thegoalis

that,besidesgeneralriskmanagementprinciplesandguidelines,

Cargotecalsohasriskmanagementtoolsthatfacilitatepractical

workandwhichareimplementedthroughouttheCompany.

Duringtheyear,Cargotechasdevelopedabasicriskmanage-

menttool,theapplicationandadoptionofwhichwillbestudied

intheoperations,businessprojectsandriskreportingofthe

businessunits.

Cargotecdefinesariskasanyinternalorexternalthreatoruncer-

taintywhichmaypreventorjeopardiseoperationsandthe

achievementofobjectives.Risksaredividedrisksintostrategic

andbusinessrisks,financialrisksandoperationalandhazard

risks.

Strategicandbusinessrisksarerelatedtobusinesscyclesin

theworldeconomyandCargotec’scustomersectors,the

availabilityofrawmaterialsandcomponentsandtrendsinthe

relatedprices,mergersandacquisitionsandtheoperationsof

dealersandsubcontractors.Cargotecaddressestheserisksby

strivingtoidentifythemandpreparefortheminadvance.

Cargotec’streasuryoperationsandfinancialriskmanagement

principlesaredefinedintheCorporateTreasuryPolicy.Financial

risksarisingfromCargotec’sbusinessactivitiesincludecurrency,

interestrate,refinancingandliquidity,counterpartyandoperative

creditrisks.TheCompanyseekstoprotectitselfagainstthese

risksinordertoensureafinanciallysoundbasisfordevelopingits

businessoperations.

Operationalrisksrelatetopersons,property,processes,products,

informationtechnologyandpractices.Cargotec’smainactivities

relatedtothemanagementoftheserisksarerelatedfirstand

foremosttoincreasingproductsafetyandinformationsecurity

andensuringbusinesscontinuity.Withrespecttokeyperson

risks,successionplansforleadershipandkeyassignments

areupdatedonanannualbasis,forthepurposeofensuring

continuityinoperations.

Cargotec’smainhazardrisksincluderisksrelatedtopersonnel,

property,businessinterruptionsandlogistics.Inadditionto

preventiveriskmanagementmeasures,Cargotecprotectsitself

againsttheserisksbytakingoutworldwideinsurancepolicies

thatcoverallunits.

Shares, Share Capital and Option rights

Cargotec’ssharecapitalonDecember31,2008totalled

EUR64,304,280.ThesharecapitalincreasedbyEUR83,907during

thefinancialperiodasaresultofthesubscriptionforclassB

sharesunderCargotecoptionrights.

OnDecember31,2008,thenumberoflistedclassBshares

totalled54,778,191whilethatofunlistedclassAsharestotalled

9,526,089.ClassBsharesaccountedfor85.2(85.2)percentofthe


totalnumberofsharesand36.5(36.5)percentofvotes.ClassA

sharesaccountedfor14.8(14.8)percentofthetotalnumberof

sharesand63.5(63.5)percentofvotes.Thetotalnumberofvotes

attachedtoallshareswas15,002,201(14,994,074)attheyear

end.Attheendofthefinancialperiod,Cargotecheldatotalof

2,990,725classBshares,whichcorrespondsto4.7percentofthe

totalnumberofsharesand2.0percentofvotes.

Tradingwith2005AoptionrightsendedonMarch20,2008.The

remaining2005Boptionrightsmaybeusedtosubscribefora

further104,730classBshares,therebyincreasingCargotec’s

sharecapitalbyEUR104,730.Thesaidnumberofsharesthatcan

besubscribedforundertheremainingoptionrightsconstitutes

0.2percentofCargotec’stotalnumberofsharesand0.07percent

ofthetotalnumberofvotes.

Market Capitalisation and Trading

TheclosingpriceofCargotec’sclassBsharesonDecember31,

2008wasEUR8.09.TheaveragesharepriceforJanuary–

DecemberwasEUR21.47,thehighestquotationbeingEUR36.49

andthelowestEUR7.63.Thesharepricedropped74percent

duringthefinancialperiod.InJanuary–December,approximately

86millionCargotecclassBsharesweretradedontheNASDAQ

OMXHelsinki,correspondingtoaturnoverofapproximatelyEUR

1,868million.TheaveragedailytradingvolumeofclassBshares

was338,722sharesorEUR7,381,727.

OnDecember31,2008,thetotalmarketvalueofCargotecclass

BshareswasEUR419million,excludingtreasurysharesheld

bytheCompany.Theperiod-endmarketcapitalisation,inwhich

unlistedclassAsharesarevaluedattheaveragepriceofclassB

sharesonthelasttradingdayofthefinancialperiod,wasEUR495

million,excludingtreasurysharesheldbytheCompany.

Changes in Cargotec’s Management

OnDecember18,Cargotec’sBoardofDirectorsappointedPekka

VauramoasSeniorExecutiveVicePresidentandDeputytoCEO

MikaelMäkinen.Vauramocontinuestoberesponsibleforthe

Kalmarbusinessarea.

AxelLeijonhufvudwasappointedasSeniorVicePresident,Pro-

ductSupply,startingfromJanuary1,2009.Leijonhufvudwasear-

lierresponsibleforproductsupplyinKalmarandwasChairman

ofKalmar’sRTCH(RoughTerrainContainerHandling)boardat

CargotecCorporation.LauriBjörklund,SeniorVicePresident,Pro-

ductionandPurchasing,wasappointedasSeniorVicePresident,

CorporateDevelopmentProjectsasofJanuary1,2009.

OnFebruary1,2008,Cargotec’sSeniorExecutiveVicePresident

KariHeinistöwasappointedtoleadtheOntheMovechange

programme.HecontinuesasamemberoftheExecutiveBoard

andsecretarytoCargotec’sBoardofDirectors.EevaSipiläwas

appointedasCargotec’sCFOasofFebruary1,2008.MinnaKarhu

wasappointedasVicePresident,CorporateCommunicationsof

CargotecasofFebruary1,2008.

Decisions Taken at Cargotec Corporation’s Annual General Meeting

CargotecCorporation’sAnnualGeneralMeeting(AGM)washeld

onFebruary29,2008inHelsinki.Themeetingapprovedthefi-

nancialstatementsandconsolidatedfinancialstatementsaswell

asgranteddischargefromliabilitytothePresidentandCEOand

themembersoftheBoardofDirectorsfortheaccountingperiod

January1–December31,2007.

TheAGMapprovedtheBoard’sproposalofadividendofEUR

1.04foreachofthe9,526,089classAsharesandEUR1.05forthe

52,789,559outstandingclassBshares.

ThenumberofmembersoftheBoardofDirectorswasconfirmed

atsixaccordingtotheproposaloftheBoard’sNominationand

CompensationCommittee.HenrikEhrnrooth,TapioHakakari,Ilkka

Herlin,PeterImmonen,KarriKaitueandAnttiLagerrooswere

electedasmembersoftheBoardofDirectors.

AuthorisedpublicaccountantsJohanKronbergandPricewater-

houseCoopersOywerere-electedasauditorsaccordingtothe

proposalofAuditCommitteeofCargotec’sBoardofDirectors.

Inaddition,theAGMresolvedtoamendtheArticlesof

AssociationmainlyduetoandtoalignwiththenewFinnish

CompaniesActeffectiveasfrom2006.

Authorisations Granted by the Annual General Meeting

TheAGMauthorisedtheBoardofDirectorsofCargotectodecide

onacquisitionoftheCompany’sownshareswithnon-restricted

equity.Thesharesmaybeacquiredinordertodevelopthe

capitalstructureoftheCompany,financeorcarryoutpossible

acquisitions,implementshare-basedincentiveplans,ortobe

transferredforotherpurposesortobecancelled.Thesharesmay

beacquiredthroughadirectedacquisitionasdefinedinFinnish

CompaniesAct,Chapter15§6.

Altogethernomorethan6,400,000ownsharesmaybepur-

chased,ofwhichnomorethan952,000areclassAsharesand


5,448,000areclassBshares.Theabove-mentionedamounts

includethe1,904,725classBsharesintheCompany’spossessi-

onontheAGMdate,whichwerepurchasedduring2005–2007.

Theproposedamountcorrespondstolessthan10percentof

thesharecapitaloftheCompanyandthetotalvotingrights.The

acquisitionofownshareswilldecreasethenon-restrictedequity.

Theauthorisationisineffectforaperiodof18monthsfromthe

dateofdecisionoftheAGM.

Inaddition,theAGMauthorisedtheBoardofDirectorstodecide

ontransferoftreasuryshares.TheBoardofDirectorswas

authorisedtodecidetowhomandinwhichorderthetreasury

shareswillbetransferred.TheBoardofDirectorsmaydecide

onthetransferoftreasurysharesotherwisethaninproportion

totheexistingpre-emptiverightofshareholderstopurchase

theCompany’sownshares.Thetreasurysharesmaybeusedas

compensationinacquisitionsandinotherarrangementsaswell

astoimplementtheCompany’sshare-basedincentiveplansin

themannerandtotheextentdecidedbytheBoardofDirectors.

TheBoardofDirectorshasalsotherighttodecideonthetransfer

ofthesharesinpublictradingattheNASDAQOMXHelsinkitobe

usedascompensationinpossibleacquisitions.Thisauthorisation

isineffectforaperiodof18monthsfromthedateofdecisionof

theAGM.

Organisation of the Board of Directors

Cargotec’sBoardofDirectorsinitsorganisingmeetingelected

IlkkaHerlintocontinueasChairmanoftheBoardandHenrik

EhrnroothtocontinueasDeputyChairman.Cargotec’s

SeniorExecutiveVicePresidentKariHeinistöcontinuestoactas

secretarytotheBoardofDirectors.Cargotec’sBoardofDirectors

decidedthattheAuditCommittee,NominationandCompensati-

onCommitteeaswellasWorkingCommitteecontinuetoassist

theBoardinitswork.

TheBoardofDirectorselectedamongitsmembersIlkkaHerlin,

KarriKaitueandAnttiLagerroosasmembersoftheAudit

Committee.KarriKaituewasre-electedasChairmanoftheAudit

Committee.BoardmembersHenrikEhrnrooth,TapioHakakari,

IlkkaHerlinandPeterImmonenwereelectedtotheNomination

andCompensationCommittee.IlkkaHerlinwasre-electedas

chairmanoftheNominationandCompensationCommittee.

BoardmembersTapioHakakari,IlkkaHerlinandPeterImmonen

wereelectedtotheWorkingCommittee.IlkkaHerlinwasre-

electedaschairmanoftheWorkingCommittee.

Share Repurchases

Cargotec’sBoardofDirectorsdecidedtoexercisetheautho-

risationoftheAGMtoacquiretheCompany’sownshares.In

accordancewiththeauthorisationclassBshareswerepurchased

atpublictradingintheNASDAQOMXHelsinkiatthemarketprice.

Atotalof1,086,000ownshareswererepurchasedduringthe

periodMarch25–August23,2008atanaveragepriceofEUR

21.73.Cargotecheldatotalof2,990,725classBshareson

December31,2008.

Short-term Risks and Uncertainties

Duetothefinancialcrisis,theglobaleconomicsituationis

markedbyhugeuncertainty.Cargotec’soperationsaresubject

tosignificantshort-termrisksanduncertaintyfactors,specifically

relatedtotheeffectsoftheslumpondemandforCargotec’s

productsandservicesandthewillingnessofcustomerstoinvest.

Thefactthatmanyfactorsunderlyingthisuncertaintyarebeyond

thecontroloftheCompanymerelyservestoamplifythechallen-

geconfrontingriskanalysis.

Prolongeduncertaintyandcreditdroughtincreasestheriskof

lower,generalwillingnesstoinvestandconsequentlydemandfor

Cargotec’sequipmentcouldfurtherdecrease.Shipbuildinginpar-

ticularhasbeenaffectedbysignificantordercancellationsdueto

lowershippingutilisationratescombinedwithmajorincreasesin

financingcosts.Thecreditcrunchmayalsoseeothercustomer

groupsmovetheirinvestmentdecisionsbackorcancelorders.

Furthermore,customers’andsuppliers’financialsituationswill

affectthecollectionofreceivablesandthelevelofbaddebt.

Lowerdemandwillrequireadditionalcapacityadjustment

measures.Furtherfallingoffofdemandatafasterratethanthe

implementationofcapacitycutswillhaveanegativeimpacton

performance.

Events after the reporting period

StaffreductionscontinuedinJanuaryasthemarketscontinued

toweaken.IntheunitmanufacturingtailliftsinBispgården,

Sweden,negotiationsbeganontheneedforareductioninthe

workforceof75.AtKalmar’sLjungbyandLidhultunitsinSweden,

negotiationsbeganontheneedforareductionintheworkforce

of97.Cargotecplanstomakeitsoperationsmoreefficientby

reorganisingandtransferringamajorityofitsbusinessinLjungby

toitsLidhultfacility.Meanwhile,inFinlandnegotiationsbeganfor

theplannedtemporarylay-offof900staffforamaximumof90

daysinRaisioandTampereandareductionof60employeesin

Tampere.


Board of Director’s Proposal on the Distribution of Profit

Theparentcompany’sdistributableequityonDecember31,2008

wasEUR959,964,211.07ofwhichnetincomefortheperiodwas

EUR158,536,423.21TheBoardofDirectorswillproposetothe

AnnualGeneralMeetingconveningonMarch5,2009,thatof

thedistributableprofit,adividendofEUR0.59pereachofthe

9,526,089classAshareandEUR0.60pereach51,787,466classB

shareoutstaningbepaid,totallingEUR36,692,872.11.Therestof

thedistributableequity,EUR923,271,338.96willberetainedand

carriedforward.

NosignificantchangeshaveoccurredintheCargotec’sfinancial

positionaftertheendofthefinancialyear.Theliquidityisgood

and,intheBoardofDirector’sview,theproposeddistribution

ofdividenddoesnotposearisktotheCompany’sfinancial

standing.

Outlook

Inthecurrentuncertaineconomicsituationitisdifficultto

estimatethedemandforCargotec’sproducts.Thisisfurther

complicatedbypossibleordercancellationsanddelays.The

preconditionsforsalesgrowthexistinservicesandMacGREGOR.

SalesofHiabandKalmarareexpectedtodeclinefrom2008.

SignificantrestructuringmeasurescostingEUR35millionwere

decidedonduring2008tocreateanewsupplyplatformand

improveprofitabilityinCargotec.Focusisontherapidimplemen-

tationofthesemeasures.ApproximatelyEUR16millionofthese

costsremainfor2009.

Financial calendar

AnnualReport2008availableontheCargotec’sinternetpages,

week7

AnnualGeneralMeetingonThursdayMarch5,2009

RecorddatefordividendonTuesdayMarch10,2009

DividendpaymentonTuesdayMarch17,2009

InterimReportfortheperiodJanuary–March

onTuesdayApril28,2009

InterimReportfortheperiodJanuary–June

onMondayJuly20,2009

InterimReportfortheperiodJanuary–September

onThursdayOctober22,2009

Helsinki,February2,2009

Cargotec Corporation

BoardofDirectors


Cargotec Corporation’s Financial Statements Review 2008

Consolidated Income Statement

MEUR 10-12/2008 10-12/2007 1-12/2008 1-12/2007

Sales 923.5 867.5 3,399.2 3,018.2

Costofgoodssold -763.8 -689.3 -2,762.5 -2,376.8

Non-recurringitems* - -18.0 - -18.0

Gross profit 159.7 160.3 636.7 623.4

Grossprofit,% 17.3 % 18.5 % 18.7% 20.7%

Otheroperatingincome 15.0 6.7 39.1 26.8

Sellingandmarketingexpenses -49.4 -54.3 -189.9 -197.4

Researchanddevelopmentexpenses -13.2 -10.4 -43.6 -38.9

Administrationexpenses -58.7 -44.7 -212.0 -176.1

Restructuringcosts -19.1 - -19.1 -

Otheroperatingexpenses -18.1 -11.4 -38.0 -34.9

Shareofassociatedcompanies’andjointventures’netincome 0.5 0.1 0.6 0.3

Operating profit 16.8 46.3 173.7 203.1

Operatingprofit,% 1.8 % 5.3 % 5.1% 6.7%

Financing income 1.8 5.6 16.0 16.7

Financingexpenses -15.2 -12.2 -44.5 -35.5

Income before taxes 3.4 39.7 145.2 184.4

Incomebeforetaxes,% 0.4 % 4.6 % 4.3% 6.1%

Taxes 5.6 -10.8 -24.4 -46.0

Net income for the period 9.0 28.9 120.8 138.4

Netincomefortheperiod,% 1.0 % 3.3 % 3.6% 4.6%

Net income for the period attributable to:

EquityholdersoftheCompany 8.5 27.8 118.4 136.5

Minorityinterest 0.4 1.1 2.4 1.8

Total 9.0 28.9 120.8 138.4

Earnings per share for profit attributable to the

equity holders of the Company:

Basicearningspershare,EUR 0.14 0.45 1.91 2.17

Dilutedearningspershare,EUR 0.14 0.44 1.91 2.16

*Kalmarbusinessarearelatedcontainerspreaderinspectionandrepairprogramme


Consolidated Balance Sheet

MEUR 31.12.2008 31.12.2007

ASSETS

Non-current assets

Goodwill 669.2 670.2

Otherintangibleassets 85.0 81.0

Property,plantandequipment 283.5 253.7

Investmentsinassociatedcompaniesandjointventures 7.0 4.8

Available-for-saleinvestments 2.0 2.3

Loansreceivableandotherinterest-bearingassets1) 7.7 5.5

Deferredtaxassets 97.2 55.5

Derivativeassets 55.0 8.9

Othernon-interest-bearingassets 8.1 12.0

Total non-current assets 1,214.6 1,094.0

Current assets

Inventories 881.9 657.4

Loansreceivableandotherinterest-bearingassets1) 0.2 0.4

Incometaxreceivables 18.5 18.3

Derivativeassets 130.4 50.8

Accountsreceivableandothernon-interest-bearingassets 714.0 582.8

Cashandcashequivalents1) 79.2 179.0

Total current assets 1,824.3 1,488.7

Total assets 3,038.9 2,582.6

1)Includedininterest-bearingnetdebt


MEUR 31.12.2008 31.12.2007

EQUITY AND LIABILITIES

Equity attributable to the equity holders of the Company

Sharecapital 64.3 64.2

Sharepremiumaccount 98.0 97.4

Treasuryshares -93.6 -70.0

Translationdifferences -20.4 -29.6

Fairvaluereserves -54.5 19.9

Retainedearnings 861.6 808.7

Total equity attributable to the equity holders of the Company 855.3 890.6

Minorityinterest 9.1 6.1

Total equity 864.4 896.7

Non-current liabilities

Loans1) 440.2 433.3

Deferredtaxliabilities 43.0 38.5

Pensionobligations 33.5 35.2

Provisions 34.6 38.4

Derivativeliabilities 84.5 14.9

Othernon-interest-bearingliabilities 26.6 53.2

Total non-current liabilities 662.5 613.6

Current liabilities

Currentportionoflong-termloans1) 4.0 3.5

Otherinterest-bearingliabilities1) 110.6 51.6

Provisions 70.4 70.8

Incometaxpayables 53.2 46.9

Derivativeliabilities 129.3 17.6

Accountspayableandothernon-interest-bearingliabilities 1,144.4 882.0

Total current liabilities 1,512.0 1,072.4

Total equity and liabilities 3,038.9 2,582.6

1)Includedininterest-bearingnetdebt.Inaddition,thecalculationoftheinterest-bearingnetdebtincludesthehedgingofcross-currency

riskrelatingtotheUSD300millionPrivatePlacementbond,totallingonDecember31,2008,EUR10.2(Dec31,2007:21.9)million.


Consolidated Statement of Changes in Equity

Attributabletotheequityholdersofthecompany

MEUR

Share

capital

Share

premium

account

Treasury

shares

Translation

differences

Fair

value

reserves

Retained

earnings Total

Minority

interest

Total

equity

Equity on 31.12.2006 64.0 96.0 -23.9 -12.0 10.5 734.2 868.8 8.0 876.8

Gain/lossoncashflowhedgesbookedto

equity* 18.5 18.5 -0.0 18.5

Gain/lossoncashflowhedges

transferredtoIS -9.1 -9.1 -9.1

Translationdifferences -17.6 -17.6 -0.7 -18.3

Netincomerecogniseddirectlyinequity - - - -17.6 9.4 - -8.2 -0.7 -8.9

Netincomefortheperiod 136.5 136.5 1.8 138.4

Totalrecognisedincomeandexpenses

fortheperiod - - - -17.6 9.4 136.5 128.4 1.1 129.5

Dividendspaid -63.2 -63.2 -0.5 -63.7

Sharessubscribedwithoptions 0.2 1.3 1.5 1.5

Acquisitionoftreasuryshares -46.1 -46.1 -46.1

Share-basedincentives,valueofreceived

services* 1.2 1.2 1.2

Otherchanges - -2.5 -2.5

Equity on 31.12.2007 64.2 97.4 -70.0 -29.6 19.9 808.7 890.6 6.1 896.7

Gain/lossoncashflowhedgesbookedto

equity* -103.6 -103.6 0.4 -103.2

Gain/lossoncashflowhedges

transferredtoIS 29.2 29.2 29.2

Translationdifferences 9.2 9.2 0.6 9.8

Totalnetincomerecogniseddirectlyin

equity - - - 9.2 -74.5 - -65.3 1.0 -64.2

Netincomefortheperiod 118.4 118.4 2.4 120.8

Totalrecognisedincomeandexpenses

fortheperiod - - - 9.2 -74.5 118.4 53.2 3.4 56.6

Dividendspaid -65.3 -65.3 -0.6 -66.0

Sharessubscribedwithoptions 0.1 0.6 0.7 0.7

Acquisitionoftreasuryshares -23.6 -23.6 -23.6

Share-basedincentives,valueofreceived

services* -0.2 -0.2 -0.2

Otherchanges - 0.2 0.2

Equity on 31.12.2008 64.3 98.0 -93.6 -20.4 -54.5 861.6 855.3 9.1 864.4

*Netoftax


Consolidated Cash Flow Statement

MEUR 1-12/2008 1-12/2007

Netincomefortheperiod 120.8 138.4

Depreciationandimpairments 60.1 59.8

Financingitemsandtaxes 52.9 64.7

Changeinreceivables -171.2 -118.4

Changeinpayables 309.3 198.5

Changeininventories -237.5 -107.6

Otheradjustments -0.6 -0.4

Cash flow from operations 133.8 235.1

Interestreceived 4.9 5.6

Interestpaid -25.5 -12.0

Dividendsreceived 0.0 0.0

Otherfinancialitems 11.2 -12.5

Incometaxespaid -30.7 -43.6

Cash flow from operating activities 93.7 172.6

Capitalexpenditure -113.2 -90.8

Proceedsfromsalesoffixedassets 15.0 12.5

Acquisitions,netofcash -46.5 -172.5

Cashflowfrominvestingactivities,otheritems -10.5 -13.5

Cash flow from investing activities -155.1 -264.3

Proceedsfromsharesubscriptions 0.7 1.5

Acquisitionoftreasuryshares -23.6 -46.1

Proceedsfromlong-termborrowings 0.7 274.5

Repaymentsoflong-termborrowings -2.4 -29.5

Proceedsfromshort-termborrowings 61.3 40.8

Repaymentsofshort-termborrowings -32.0 -31.5

Dividendspaid -66.6 -63.8

Cash flow from financing activities -61.9 145.9

Change in cash -123.3 54.2

Cash,cashequivalentsandbankoverdraftsatthebeginningofperiod 167.5 114.5

Effectofexchangeratechanges 1.7 -1.1

Cash, cash equivalents and bank overdrafts at the end of

period 45.9 167.5

Bankoverdraftsattheendofperiod 33.3 11.4

Cash and cash equivalents at the end of period 79.2 179.0

KEY FIGURES

1-12/2008 1-12/2007

Equity/share EUR 13.95 14.29

Interest-bearingnetdebt MEUR 477.8 325.5

Totalequity/totalassets % 33.0 38.3

Gearing % 55.3 36.3

Returnonequity % 13.7 15.6

Returnoncapitalemployed % 12.7 16.8


Segment Reporting

Sales by geographical segment, MEUR 1-12/2008 1-12/2007

EMEA 1,901 1,677

Americas 556 647

AsiaPacific 942 695

Total 3,399 3,018

Sales by geographical segment, % 1-12/2008 1-12/2007

EMEA 55.9 % 55.6 %

Americas 16.4 % 21.4 %

AsiaPacific 27.7 % 23.0 %

Total 100.0 % 100.0 %

Sales, MEUR 1-12/2008 1-12/2007

Hiab 907 931

Kalmar 1,515 1,343

MacGREGOR 985 748

Internalsales -8 -4

Total 3,399 3,018

Operating profit, MEUR 1-12/2008 1-12/2007

Hiab 49.4 * 73.8

Kalmar 89.6 * 105.5 **

MacGREGOR 83.6 59.4

Corporateadministrationandother -29.8 -17.5

Operatingprofitfromoperations 192.8 * 221.1 **

Restructuringcosts -19.1 -

Containerspreaderinspectionandrepairprogramme - -18.0

Total 173.7 203.1

Operating profit, % 1-12/2008 1-12/2007

Hiab 5.4% * 7.9 %

Kalmar 5.9% * 7.9 %**

MacGREGOR 8.5% 7.9 %

Cargotec,operatingprofitfromoperations 5.7% * 7.3 %**

Cargotec 5.1% 6.7 %

*ExcludingrestructuringcostsofwhichbusinesssegmentHiabaccountedforEUR14.1million,KalmarforEUR4.5millionandCorporate

administrationforEUR0.3million.

**Excludingtheone-offcostofEUR18.0millionrelatedtoacontainerspreaderinspectionandrepairprogramme

20 Cargotec Corporation’s Financial Statements Review 2008 Cargotec Corporation’s Financial Statements Review 2008

Orders received, MEUR 1-12/2008 1-12/2007

Hiab 818 985

Kalmar 1,566 1,429

MacGREGOR 1,393 1,696

Internalordersreceived -9 -4

Total 3,769 4,106

Order book, MEUR 31.12.2008 31.12.2007

Hiab 164 260

Kalmar 704 660


Internalorderbook -1 -1

Total 3,054 2,865

Capital expenditure, MEUR 1-12/2008 1-12/2007

Infixedassets(excludingacquisitions) 75.7 52.5

Inleasingagreements 1.1 0.7

Incustomerfinancing 35.9 37.5

Total 112.8 90.7

Number of employees at the end of period 31.12.2008 31.12.2007

Hiab 4,308 4,418

Kalmar 4,766 4,459


Corporateadministration 175 87

Total 11,826 11,187

Average number of employees 1-12/2008 1-12/2007

Hiab 4,509 4,091

Kalmar 4,680 4,233


Corporateadministration 139 72

Total 11,777 10,276


Notes

Taxes in income statement

MEUR 1-12/2008 1-12/2007

Currentyeartaxexpense 44.3 56.2

Changeindeferredtaxassetsandliabilities -9.7 -3.9

Taxexpenseforpreviousyears -10.2 -6.3

Total 24.4 46.0

Commitments

MEUR 31.12.2008 31.12.2007

Guarantees 0.6 2.2

Dealerfinancing 0.2 8.4

Endcustomerfinancing 11.5 7.5

Operatingleases 48.0 47.7

Offbalancesheetinvestmentcommitments - 1.2

Othercontingentliabilities 4.0 3.7

Total 64.3 70.6

Cargotecleasesproperty,plantandequipmentundernon-cancellableoperatingleases.Theleaseshavevaryingtermsandrenewalrights.

Itisnotanticipatedthatanymaterialliabilitieswillarisefromtradefinancecommitments.

The future minimum lease payments under non-cancellable operating leases

MEUR Dec31,2008 Dec31.,2007

Lessthan1year 14.9 14.1

1−5years 26.5 27.4

Over5years 6.7 6.3

Total 48.0 47.7

TheaggregateoperatingleaseexpensestotalledEUR15.6(Jan1−Dec31,2007:13.6)million.


Fair values of derivative financial instruments

Positive

fairvalue

Negative

fairvalue

Netfair

value

Netfair

value

MEUR 31.12.2008 31.12.2008 31.12.2008 31.12.2007

FXforwardcontracts,cashflowhedges 79.6 199.0 -119.4 11.3

FXforwardcontracts,non-hedgeaccounted 82.1 14.9 67.2 20.7

Crosscurrencyandinterestrateswaps,cashflowhedges 23.7 - 23.7 -4.9

Total 185.4 213.8 -28.4 27.1

Non-currentportion:

FXforwardcontracts,cashflowhedges 31.3 84.5 -53.2 -1.1

Crosscurrencyandinterestrateswaps,cashflowhedges 23.7 - 23.7 -4.9

Non-current portion 55.0 84.5 -29.5 -6.0

Current portion 130.4 129.3 1.1 33.2

CrosscurrencyandinterestrateswapshedgetheUSPrivatePlacementcorporatebondfundedinFebruary2007.

Nominal values of derivative financial instruments

MEUR 31.12.2008 31.12.2007

FXforwardcontracts 3,617.5 2,610.0

Crosscurrencyandinterestrateswaps 225.7 225.7

Total 3,843.3 2,835.7


Acquisitions In2008CargotecmadeeightacquisitionsofwhichfourinHiab'sbusinessarea. InFebruary,inordertostrengthenitsR&Dcapabilities,Cargotecacquired60percentofIdeaDesigning&ConsultingS.r.l,Italy.Theaccountingofthisbusinesscombinationalsoincludestheminorityshare,whichincludesaredemptionobligation.TheacquisitionwasfinalisedinFebruary. InFebruary,HiabmadeanagreementtoacquiretheUK-basedDelEquipment(UK)LimitedandtheUS-basedUltronLiftCorp.ThesecompaniesmanufacturetailliftsinUKandUS.TheacquisitionswerefinalisedattheendofMarch.InFebruary,Hiabsignedalsoanagreementtoacquire70percentoftheoperationsofAustralianO’Leary’sMaterialHandlingServicesPtyLtd.,theleadingsupplieroftailliftsinWesternAustralia.TheacquisitionwasclosedinApril.AttheendofMarch,HiabconcludedanagreementtoacquirethemajorityoftheoperationsoftheSouthAfricanBowmanCranes(Pty)Limited.Thiscompanysupplies,installsandservicestruck-relatedloadhandlingequipment.TheacquisitionwasfinalisedinJune.InJune,HiabconcludedanagreementtoacquirethebusinessofZeproTailgate(1987)LimitedinNewZealand.Inadditiontotailliftsales,thebusinesscomprisesinstallation,repairs,maintenanceandsparepartssales.TheacquisitionwasclosedinJuly. InApril,MacGREGORsignedanagreementtoacquireUS-basedPlatformCraneService,Inc.TheacquisitionwasclosedinMay. KalmaracquiredArgentineanEquiposyServiciosTerminalesyPuertosSRL.Inadditiontonewequipmentdistributionthecompanyprovidesequipmentcommissioning,technicalandsparepartsupportaswellasequipmentrepairingandrefurbishinginSouthAmerica.InOctoberKalmaracquired80percentoftwoItalianservicecompanies,CVSTechnoportsS.r.l.andCVSServiceS.r.l. Managementestimatesthattheconsolidatedsalesfortheyear2008wouldhavebeenEUR3,426million,iftheacquisitionshadbeencompletedonJan1,2008. Thetablebelowsummarisestheacquisitionscompletedin2008.ThebusinesscombinationsofEquiposyServiciosTerminalesyPuertosSRL,CVSTechnoportsS.r.l.andCVSServiceS.r.l.wereaccountedaspreliminaryasthedeterminationoffairvaluestobeassignedtotheassets,

liabilitiesandcontingentliabilitieswasyetnotfinalised.

Net fair values of identifiable assets and

liabilities of the acquired businesses

Assets and liabilities immediately

before the business combination

MEUR

Otherintangibleassets 4.3 0.0

Property,plantandequipment 3.5 3.3

Inventories 12.9 12.7

Non-interest-bearingassets 14.3 14.3

Interest-bearingassetsandCashandcash

equivalents 0.9 0.9

Interest-bearingliabilities -6.3 -6.3

Othernon-interest-bearingliabilities -21.7 -19.9

Acquired net assets 7.8 5.0

Transactionprice 52.0

Costsrelatedtoacquisitions 2.6

Goodwill 46.8

Transactionpricepaidincash 45.7

Costsrelatedtoacquisitions 2.4

Cashandcashequivalentsinacquired

businesses -0.9

Total cash outflow from acquisitions 47.2

ThebusinesscombinationsofHydramarineAS,InditalConstructionMachineryLtd,BayEquipmentRepairsIncandBaltiESwereaccountedaspreliminaryattheendof2007,asthedeterminationoffairvalueswasstillunfinished.Theaccountingoftheseacquisitionswasfinalisedin2008.Ithadnoimpactonthepreviousyear’sfigures.


Accounting Principles

TheinterimreporthasbeenpreparedaccordingtotheInternationalAccountingStandard34:InterimFinancialReporting.

Theaccountingpoliciesadoptedareconsistentwiththoseoftheannualfinancialstatementsof2008.Allfigurespresentedhavebeenrounded

andconsequentlythesumofindividualfiguresmaydeviatefromthepresentedsumfigure.

Adoption of new interpretation starting in January 1, 2008

StartingfromJanuary1,2008CargotechasadoptedthefollowingnewinterpretationbytheIASBpublishedin2007:

-IFRIC14,IAS19-TheLimitonaDefinedBenefitAsset,MinimumFundingRequirementsandtheirinteraction.

Theadoptionoftheinterpretationdoesnothaveamaterialeffectontheinterimfinancialstatements.

Inaddition,Cargotechastheappliedthechangestostandards“IAS39FinancialInstruments:RecognitionandMeasurement”and“IFRS7Finan-

cialInstruments:Disclosures”,knownas“ReclassificationofFinancialAssets”,giveninOctober2008.Theamendmentshavenomaterialimpact

on2008financialstatements,asCargotechadnosuchassetswhosereclassificationmanagementestimatedtobenecessary.

Calculation of key figures

Totalequityattributabletotheshareholdersoftheparentcompany

Equity/share = __________________________________________________________________

Shareissueadjustednumberofsharesattheendofperiod(excluding

treasuryshares)

Interest-bearingnetdebt = Interest-bearingdebt*-interest-bearingassets

Totalequity

Totalequity/totalassets(%) = 100x __________________________________________________________________

Totalassets-advancesreceived

Interest-bearingdebt*-interest-bearingassets

Gearing(%) = 100x __________________________________________________________________

Totalequity

Netincomeforperiod

Returnonequity(%) = 100x __________________________________________________________________

Totalequity(averageforperiod)

Incomebeforetaxes+interestandotherfinancingexpenses

Returnoncapitalemployed(%) = 100x __________________________________________________________________

Totalassets-non-interest-bearingdebt(averageforperiod)

Netincomefortheperiodattributabletotheshareholdersoftheparent

company

Basicearnings/share = __________________________________________________________________

Shareissueadjustedweightedaveragenumberofsharesduringtheperiod

(excludingtreasuryshares)

*IncludingcrosscurrencyhedgingoftheUSD300millionPrivatePlacementcorporatebonds.


Quarterly Figures

Cargotec Q4/2008 Q3/2008 Q2/2008 Q1/2008 Q4/2007

Ordersreceived MEUR 633 967 1,013 1,155 1,214

Orderbook MEUR 3,054 3,486 3,360 3,287 2,865

Sales MEUR 924 848 901 727 868

Operatingprofit MEUR 35.9 * 49.6 63.1 44.2 64.3 **

Operatingprofit % 3.9 * 5.8 7.0 6.1 7.4 **

Basicearnings/share EUR 0.14 0.66 0.61 0.50 0.45

Hiab Q4/2008 Q3/2008 Q2/2008 Q1/2008 Q4/2007

Ordersreceived MEUR 157 194 238 228 254

Orderbook MEUR 164 229 238 253 260

Sales MEUR 216 209 253 230 244

Operatingprofit MEUR 3.7 * 9.5 18.5 17.7 19.1

Operatingprofit % 1.7 * 4.5 7.3 7.7 7.8

Kalmar Q4/2008 Q3/2008 Q2/2008 Q1/2008 Q4/2007


Orderbook MEUR 704 778 790 824 660

Sales MEUR 413 386 396 322 364

Operatingprofit MEUR 12.1 * 25.8 32.3 19.4 26.9 **

Operatingprofit % 2.9 * 6.7 8.2 6.0 7.4 **

MacGREGOR Q4/2008 Q3/2008 Q2/2008 Q1/2008 Q4/2007


Orderbook MEUR 2,187 2,480 2,334 2,211 1,946

Sales MEUR 298 256 254 177 261

Operatingprofit MEUR 30.7 19.1 21.9 11.9 22.3

Operatingprofit % 10.3 7.5 8.6 6.7 8.6

*ExcludingrestructuringcostsofwhichbusinesssegmentHiabaccountedforEUR14.1million,KalmarforEUR4.5millionandCorporate

administrationforEUR0.3million.

**Excludingtheone-offcostofEUR18.0millioninKalmarbusinessarearelatedtoacontainerspreaderinspectionandrepairprogramme

Documents

Cargotec Corporation’s Financial Statements Review Q4 · 2 Cargotec Corporation’s Financial Statements Review 2008 Cargotec Corporation’s Financial Statements Review 2008 •