Kalmar: Same old with Q4

Translation: Original published in Finnish on 1/17/2025 at 7:15 am EET.

Kalmar held a Q4 conference call before the silent period yesterday. No major news was heard and the market has continued as in Q3. However, we are slightly more confident than before about our rather bold order intake expectations. 

Orders coming in at normal pace, releases may be delayed

Kalmar's demand situation was described as similar to Q3 for both equipment and services, but no details were given on demand in the North American market or for all-electric equipment, for example, which will be addressed in the Q4 report (February 13). However, base demand was described as good.

Kalmar stressed that we should not draw too strong conclusions from the announced Q4 orders (we estimate 22-24 MEUR by January 15, 2025). There can be significant delays in order releases, depending on the release permission from the customer, and the numerous public holidays during the Christmas period in 2024 may have caused additional delays. As a result, there may still be significant order announcements to be booked in Q4'24. Our forecast for Kalmar's Q4 order intake (436 MEUR; +8% y/y) is quite challenging and if no new Q4 order announcements are received in the coming weeks, the forecast may come under pressure. For the comparison period, Q4'23, we estimate the value of announced orders at 64 MEUR. 

Marginal drivers in both directions

Kalmar has previously stated that it does not expect the Q4’24 EBIT margin to rise to the 13.5% level of Q3'24. This is due to the weaker sales mix in Q4, both between businesses (equipment vs. services) and within businesses (e.g. carriers vs. terminal tractors). The geographical mix of revenue is also worse than in Q3. However, compared to the comparable EBIT margin of 11.8% in Q4'23, the profitability in Q4'24 was supported by a 30 MEUR cost reduction program, which we believe was completed in Q4 and is therefore estimated to have an impact of at least +7 MEUR year-on-year (+1.7% for margin). Considering this, our current forecast for Kalmar's Q4'24 comparable EBIT margin (12.2%) may even be conservative.

Decent overall takeaway

Kalmar's message was mildly positive, although as a newly listed company its communication outside official reports is characterized by caution. In any case, the market situation in Q4 has been reasonable, with the RWI/ISL index for global container traffic up +5% year-on-year in October-November and the North Range sub-index for European container traffic up as much as +11% year-on-year. This indicates a fairly good situation also in the aftermarket business. Our positive view on Kalmar and its stock has not changed.