Cavotec

OCTOBER–DECEMBER 2023
• Revenue increased 14.3% to EUR 53.5 million (46.8)
• EBIT improved to EUR 4.0 million (-1.6) and the EBIT margin increased to 7.6% (-3.5%)
• Net result for the period increased to EUR 2.4 million (-8.4)
• Operating cash flow improved to EUR 5.2 million (-2.8)
• Earnings per share, basic and diluted, increased to EUR 0.022 (-0.089)

JANUARY–DECEMBER 2023
• Order backlog decreased -16.1% to EUR 123.6 million (147.2)
• Revenue increased 22.2% to EUR 180.7 million (147.8)
• EBIT improved to EUR 7.2 million (-4.5) and the EBIT margin increased to 4.0% (-3.0%)
• Net result for the period increased to EUR 0.2 million (-14.7)
• Operating cash flow increased to EUR 1.9 million (-5.5)
• Earnings per share, basic and diluted, improved to EUR 0.002 (-0.156)

KEY EVENTS DURING THE FOURTH QUARTER
• Order valued at EUR 6.65 million from one of the world’s largest shipping companies for PowerFit, Cavotec’s containerized solutions for high-voltage connection of vessels to shore
• Long-term service agreement signed with COSCO Group
• Order signed for mooring units with North American seaway operator worth EUR 6.4 million

KEY EVENTS AFTER THE END OF THE YEAR
• Two-year service agreement signed with APM Terminals at Port of Tanger
• Shore power retrofit order signed with major European shipping line worth USD 5.7 million
• Three-year service agreement signed for shore power systems in a large North American port
• The world’s first ultra-fast 3 MW charging system for battery-powered heavy-duty vehicles now in service

Comment from the CEO

Strengthened financial position and key customers wins

It is encouraging to see our results for the fourth quarter with good growth and cash flow, continued improved profitability and positive net profit. It shows both that we have an attractive offer and that our focus on profitable growth is effective. This has also led to Cavotec’s financial position being strengthened. Although the macroeconomic situation remains uncertain, we see a strong interest in our cleantech solutions, driven by the electrification of society and regulations to reduce emissions and noise.

In the quarter, revenue increased 14.3% to EUR 53.5 million, mainly driven by deliveries of reels in the Industry segment and shore power solutions for container vessels in the Ports & Maritime segment. The projects for shore power were signed in 2022 and reflects the long lead times in the Ports & Maritime business. Currency effects had an impact on total revenue of -2.2% in the quarter.

EBIT has now been positive for four consecutive quarters and improved to EUR 4.0 million in the fourth quarter, a clear improvement from the loss of EUR 1.6 million in the last quarter 2022. This is an effect of our strategic initiatives in 2023 to improve the profitability of the order backlog which includes activities such as production optimization. So far, the Ports & Maritime segment has been most successful with these new ways of working, but we expect also the Industry segment to make significant progress in this area.

Lower financing costs
The improved profitability has had a positive effect on our financial position and operating cash flow increased to EUR 5.2 million (-2.8) in the quarter. For the full year, operating cash flow increased to EUR 1.9 million (-5.5), which is an effect of improved operational efficiency and financial management. It is gratifying to see that the net debt has decreased steadily during the last six months of 2023 to EUR 18.6 million at the end of the year. Our strengthened financial position means that our financing costs will be lower going forward.

Key customer wins
The order backlog has decreased during the year by -16.1% to EUR 123.6 (147.2) million. However, this reduction reflects an extraordinary high order intake 2022 and our efforts to grow profitably and a normalization of the order backlog. We meet a continuous steady stream of customer inquiries and strong interest in our cleantech solutions and service offering. We have recently signed several important orders, not least for larger projects within Ports & Maritime and key services agreements. Among the contracts can be mentioned the six vacuum mooring units we will deliver to a North American seaway operator worth EUR 6.4 million. Another deal encompasses the retrofitting of shore power solutions for a major European shipping line with a contract value of USD 5.7 million. We have also announced an order worth EUR 6.65 million from one of the world’s largest shipping companies for PowerFit, our containerized solutions for high-voltage connection of vessels to shore.

In 2023, we made the strategic decision to increase the focus on our service offering, which we are now seeing the effects of. We have recently signed an agreement where we will provide all service on the shore power systems we have installed in a large port in North America. The new thing about this agreement is that we are also responsible for connecting and disconnecting the power units, which improves performance and efficiency. In the fourth quarter, we signed a long-term service agreement with the large COSCO Group where we will provide maintenance for more than 60 ocean-going vessels equipped with our shore power systems. Earlier this week we announced a contract which covers the servicing of the 31 power and 45 MoorMaster units we have so far installed for APM Terminals in the Port of Tanger.

Ultra-fast 3 MW charger in operation
Another strategically important area for us that we will increase our focus on in 2024 is product development since we are determined to continue being a world-leading player in cleantech. A good example of our leadership is our ultra-fast 3MW charger – the world's first and most powerful – which is in full operation at a mining site in Australia. Developed by the Industry segment during 2023, it is now included in a solution that charges a prototype 240-ton electric haul truck in just 30 minutes. This technological advance paves the way for the electrification of heavy-duty vehicles and greatly reduced emissions in critical industries worldwide.

Significant progress in 2023
Thanks to our clear strategic priorities, we have made significant progress in 2023. We have strengthened customer relationships and improved our financial performance with a revenue increase of 22.2% to EUR 180.7 million and an EBIT that grew from EUR -4.5 million in 2022 to EUR 7.2 million in 2023. This is only possible thanks to the professionalism of our employees together with our close relationships with customers and suppliers.

Our recent customer wins are good examples of how our solutions meet the strong megatrend of the electrification of society. This megatrend is also supported by national and local authorities that are introducing requirements for reduced emissions and noise levels. This contributes to the strong interest from both existing and new customers for our leading cleantech solutions although the macroeconomic situation remains uncertain. I am looking forward to a new exciting year and working together with our employees for an emission-free world and a Cavotec that continues to grow profitably.

David Pagels
Chief Executive Officer

Webcasted presentation and telco
CEO David Pagels and CFO Joakim Wahlquist will present the interim report on Friday 23 February at 10:00 am CET. If you wish to participate via webcast, please use the link https://ir.financialhearings.com/cavotec-sa-q4-report-2023. Via the webcast you may submit written questions. If you wish to participate via teleconference, please register on the link https://conference.financialhearings.com/teleconference/?id=50046776. After registration you will be provided phone numbers and a conference ID to access the conference. You can ask questions verbally via the teleconference. The presentation is in English.

Interim reports on cavotec.com
The full report and previous interim and annual reports are available on https://ir.cavotec.com/financial-reports.

Next report
The first quarter report is published 26 April 2024 at 7:00 am CEST.