Kalmar Q2 flash comment: Drop in orders

Translation: Original comment published in Finnish on 8/8/2024 at 10:30 am EEST.

Kalmar's Q2 orders were disappointing, but profitability numbers were good. The 2024 guidance was unchanged, which is a bit of a disappointment. The initial negative reaction of the share price to the report is justified. 

Disappointment in orders

Kalmar's Q2 orders received (375 MEUR; -14% y/y) were disappointing, although we had already pointed out a downside risk to order intake in our preliminary comments. Our own expectation for orders was 432 MEUR (-1% y/y) and the consensus was 401 MEUR (-8% y/y). The order disappointment was in Equipment (-21% y/y), while Service orders increased slightly. Kalmar says that especially in the North American distribution customer segment (i.e. forklifts), there has been softness and also delays in decision-making for the largest orders. Kalmar's revenue was in the same ballpark as forecasts and adjusted profitability in Q2 (margin 12.6%) was a positive surprise. EBIT included items affecting comparability of -16 MEUR related to the preparation of the de-merger and listing of Kalmar. Financial items include interest income on consolidated receivables from Cargotec.

Guidance unchanged, even if there is room to lift

Kalmar reaffirmed its 2024 guidance for a comparable EBIT margin of >11%. This was a slight disappointment after the strong H1 profitability (12.4%) and the positive revisions in Cargotec's guidance. In the forecasts preceding this report, our own expectation for the full-year adjusted EBIT margin was 11.7% and the consensus was 12.6%.  In its market commentary, Kalmar emphasized that its customers' business is at a good level despite the challenging environment, including interest rates, inflation and geopolitics.

Negative initial reaction justified

Given the disappointing orders received and the unchanged 2024 guidance, the initial negative reaction in the share price is justified.