Annual General Meeting 2017

CEO Mika Vehviläinen

21 March 2017

21 March 2017 Annual general meeting 1

21 March 2017 Annual general meeting 2

Cargotec’s Extended Executive Board

Mika Vehviläinen

CEO

Roland Sundén

President, Hiab

Mikko Puolakka

EVP, CFO Michel van

Roozendaal

President, MacGregor

Mikael Laine

SVP, Strategy

Stephen Foster

SVP, Audit & Assurance

Mikko Pelkonen

SVP, Human Resources Leena Lie

SVP, Communications

Antti Kaunonen

President, Kalmar

Soili Mäkinen

CIO

Outi Aaltonen

SVP, General Counsel

21 March 2017 Annual general meeting 3

Contents

1. Strategic development 2016

2. Result for 2016

3. Sustainability creating competitive advantage for Cargotec

4. Dividend and outlook for 2017

Strategic development 2016

Must-win battles to support strategy implementation

21 March 2017 Annual general meeting 5

Lead digitalisation Build world-class

leadership

Build world-class

services offering

Services operation development

Development of spare parts operations

Results already visible in Hiab

Services

729

814 883 872

23% 24% 24% 25%

0%

10%

20%

30%

40%

0

250

500

750

1 000

2013 2014 2015 2016

Sales of services MEUR

IoT Cloud platform built as the basis for

our digital solutions

The number of devices connected to

digital platforms increased strongly

Navis offering complemented by the

acquisition of INTERSCHALT

Digitalisation

Aim to establish more uniform

performance-based leadership culture

Over 200 key leaders engaged to

leadership transformation

Good progress in employee engagement

Leadership

Result for 2016

Profitability continued to improve

Record high operating profit excl.

restructuring costs

– Investments into the strategy: R&D costs

have increased 43% compared to 2013

Sales and profitability increased in Kalmar

and Hiab

MacGregor affected by difficult market

situation, new actions to safeguard

profitability started in Q4

127

149

231

250

4,0% 4,4%

6,2%

7,1%

2013 2014 2015 2016

Operating profit* EUR million Operating profit* margin

21 March 2017 Annual general meeting 10

Highlights of 2016: Highest operating profit* in Cargotec’s history

*) Excluding restructuring costs

181 204

315

373

0

50

100

150

200

250

300

350

400

2013 2014 2015 2016

21 March 2017 Annual general meeting 11

Strong cash flow from operations

MEUR

578

719 622

503

46,7%

59,2%

46,4%

36,0%

0%

20%

40%

60%

80%

0

100

200

300

400

500

600

700

800

2013 2014 2015 2016

Net debt Gearing %

21 March 2017 Annual general meeting 12

Strong balance sheet: gearing below the target level of 50%

MEUR

Sales and operating profit excl. restructuring costs

improved

– More efficient project management supported

profitability

The number of containers handled at ports increased

by 1.3%

– Demand for Kalmar’s container handling

equipment was stable

Customers’ interest in automated solutions increased,

but new investment decision making was slow

Services sales increased slightly, but fell short of our

expectations

– The development improved towards the end of the

year

Kalmar – Strategy implementation progressing

0

500

1000

1500

2000

2013 2014 2015 2016

Sales Orders received

0%

3%

5%

8%

10%

0

40

80

120

160

2013 2014 2015 2016

Operating profit* Operating profit* margin

MEUR

*) Excluding restructuring costs

21 March 2017 Annual general meeting 13

Sales increased by 12%

– Sales grew in all geographical areas

– Market share increased

– New products boosted orders (54 new products)

Operating profit excl. restructuring costs

improved significantly

– Profitability was supported by increased volumes,

profitability improvement measures and new

products

Sales of services grew by 7%

Hiab – Record-breaking year

0

200

400

600

800

1000

1200

2013 2014 2015 2016

Sales Orders received

0%

3%

5%

8%

10%

13%

15%

0

25

50

75

100

125

150

2013 2014 2015 2016

Operating profit* Operating profit* margin

MEUR

*) Excluding restructuring costs

21 March 2017 Annual general meeting 14

Sales and orders received decreased

– Considerably less new merchant ships were

ordered than in the previous year

– Sligthly increased oil price towards the end of the

year did not yet support investment activity in the

offshore industry

Operating profit excl. restructuring costs

declined, but remained positive

– New actions to safeguard profitability started

during the latter part of the year

Sales of services decreased by 12%

MacGregor – Difficult market situation continued

0

200

400

600

800

1000

1200

2013 2014 2015 2016

Sales Orders received

0%

3%

5%

8%

10%

0

25

50

75

100

2013 2014 2015 2016

Operating profit* Operating profit* margin

MEUR

*) Excluding restructuring costs

21 March 2017 Annual general meeting 15

R&D investments R&D investments have increased

by 43% compared to 2013

Digitalisation

Cargotec IoT Cloud platform

Investments in software operations

New product launches

Competitiveness, cost-efficiency,

and ecological efficiency of

products

21 March 2017 Annual general meeting 16

Investments in research and product development

63,5 67,3

82,8 90,8

2,0% 2,0%

2,2%

2,6%

0,0%

0,6%

1,2%

1,8%

2,4%

3,0%

0

20

40

60

80

100

2013 2014 2015 2016

R&D expenditure % of sales

MEUR

583 634

787

840 18,3% 18,9%

21,1%

23,9%

0,0%

2,5%

5,0%

7,5%

10,0%

12,5%

15,0%

17,5%

20,0%

22,5%

25,0%

0

100

200

300

400

500

600

700

800

900

1000

2013 2014 2015 2016

Gross profit, MEUR Gross profit- %

21 March 2017 Annual general meeting 17

Gross profit improvement driven by new products

MEUR

Sustainability creating competitive advantage for Cargotec

The need for sustainable and low-emission solutions

in the transportation industry is increasing

Legislation development expected

The market demand for low-emission solutions

has increased significantly

Transportation efficiency and emissions reduction

improved with:

More fuel-efficient and electricity-efficient

products

Automation solutions

Digitalisation

21 March 2017 Annual general meeting 19

Sustainability trends in the transportation industry

21 March 2017 Annual general meeting 20

Sustainability supports Cargotec’s business opportunities

Cargotec has clear sustainability targets and processes

The biggest positive environmental impact comes from using Cargotec’s solutions

Cargotec has defined its offering for eco-efficiency

Technology has been developed during the recent years

We want to be the thought leader and the market leader in eco-efficient products

Sales of eco-efficient solutions are expected to grow in the future

Approximately one fifth of Cargotec’s sales* in 2016

*Company estimate

21 March 2017 Annual general meeting 21

Cargotec’s offering for eco-efficiency

Visibility to customer’s material flows and the

logistics chain

• Improved control over operations that

consume fuel and other resources

Products that are in use in the growing

environmental industries, wind farming and

waste management

Technology that enables significant reductions

in fuel use or reduce significantly the risks of

oil spills in the sea

Solutions that help to reduce material use by

maintaining and upgrading the existing

solutions more efficiently

Dividend and outlook for 2017

Board proposal EUR 0.95 dividend per B share for 2016

21 March 2017 Annual general meeting 23

Dividend and earnings per share

0,89

1,11

2,21

1,95

0,42 0,55

0,80 0,95

0,00

0,50

1,00

1,50

2,00

2,50

2013 2014 2015 2016

Dividend Earnings per share Payout ratio

50%

36% 49%

47%

Operating profit excluding

restructuring costs for 2017 is

expected to improve from 2016

(EUR 250.2 million)

2017 outlook

Thank You