Good afternoon, shareholders! I am the Chairman of the Board of Cargotec, Jaakko Eskola. Those of you who are present here, as well as those who are following the meeting online to the annual general meeting of Cargotec. For Cargotec in many ways. Last April, last year, April, the board decided to start a process to de-merge Hiab and Kalmar into two different companies. And for Kalmar, it would mean that it would become a new listed company. The board at the time estimated that de-merging Kalmar and Hiab would increase the shareholder value, and with that arrangement, both Kalmar and Hiab could both pursue profitable growth opportunities. We still agree with this. The board thinks that a de-merger would be the right decision, both for shareholders and for the customers of Kalmar and Hiab.
During the year, hundreds of people in Cargotec and its business areas have worked for the demerger and the listing of Kalmar. The work has progressed as planned and on time. This annual general meeting will demerger plan in practice on listing Kalmar as an independent company, roughly on the first of July in the Helsinki Stock Exchange. If you look at the stock exchange and share prices, the market supports the demerger. Cargotec's price has increased over 80%, and the biggest shareholders of Cargotec that own over 40% of the shares of Cargotec and about 45% of the votes of Cargotec, have expressed their support for the proposed demerger. Although the prerequisites of the demerger were strongly supported in the company last year, we did not forget about the business performance in Cargotec.
This should be appreciated also because in 2023, the market environment was not an easy one. Geopolitical tension continued, the interest rates remained high, and clients spent a lot of time wondering whether they to purchase and make big orders, and the forecasts right now are still slow, of slow growth. Against this background, we achieved a record high comparable profit. Due to the preparation of the proposed demerger, we are conducting our annual general meeting somewhat later than in the previous years, and therefore, we also have the opportunity to look at the first quarter of 2024. It is a pleasure to see that January through March was the fifth good quarter in a row and the best first quarter in the history of Cargotec.
All business areas improved their comparable EBIT percentage, and we will hear more about the business progress in 2023 and on the first quarter of this year later on in the CEO's review. In 2023, where the monitoring and following of the demerger preparation, business reviews, and the product and service development of Cargotec. As we have shared, MacGregor's business area would, in the future, no longer be part of Cargotec's portfolio, and we are looking for a new solution for that later on this year. And we've also been monitoring this work closely. One of the most important objectives for the board was to be committed to sustainable growth, and we have been looking at the corporate responsibility issues, and Johanna Lamminen presented the first remuneration policy for the AGM in 2020.
Today, we're going to present an updated remuneration policy that is going to be valid until the annual general meeting of 2029... 2028, sorry. The remuneration policy defines the framework for the remuneration for the CEO and management, according to which the remuneration is carried out, and it emphasizes the implementation of strategy and the creation of shareholder value. Remuneration is an investment, which the outcome of which will be reviewed in the board and in the audit of Cargotec. If the annual general meeting today shall adopt the demerger as described in the demerger plan and Kalmar's listing, today's annual general meeting will be the last in the present form for Cargotec. The listing of Cargotec will mean that we are going to focus on looking at Hiab as an independent listed company.
In this board office, Ms. Hankonen-Nybom, Ilkka Herlin, Teresa Kemppi-Vasama, Tapio Kolunsarka, Johanna Lamminen, Kaisa Olkkonen, Ritva Sotamaa, and myself were members of the board. I acting as the chair, and all the members are today present in the meeting. I would like to thank all the members of the board for a committed welcome the new members for the board that will be elected in this meeting. As the agenda of the meeting reveals, I will step down from the board of Cargotec myself, and if the annual general meeting shall become the chairman of Kalmar's board of directors. I would also like to welcome the members of Kalmar's board members to the new board work.
Finally, I would like to thank the management of Cargotec, as well as the personnel for the good work in 2023, as well as for the excellent preparation for the demerger. I would like to thank you, shareholders, for your trust and confidence in Cargotec by that you have shown by investing in Cargotec's shares. I hence open Cargotec's annual general meeting and propose that the document published as attachment to the notice to the meeting. There seem to be no other proposals. I note that Mikko Heinonen shall act as the chairman of this meeting. Thank you. I thank you for the trust, and welcome those present and those following the webcast to this annual general meeting. In accordance with the organizational document attached to the notice to the meeting, the Chief Legal Officer, Outi Aaltonen, will act as the secretary of the meeting.
So we can move on. However, before dealing with the actual items on the agenda, these usual procedures and technical details are described for items one to five in the organizational document that was already mentioned. This way, we can more easily get to the actual business of our meetings and can also shorten my soliloquy here. So we shall not deal with all these issues to the degree to which we haven't got the information prior to the meeting, and of course, shareholders are also entitled to speak on these items covered by the organizational document one to five. The organizational document will be annexed to the minutes. I've further stated that the attendees of the meeting can ask for the floor by raising their hand to you.
Those requesting to speak are again asked to begin by stating their name, and if applicable, the name of the shareholder they represent and their ballot number. About the languages, this meeting will be interpreted into English.
Back of the hall, and the headsets should have multiple options, but channel two should have English language version available. Availability for the English language is also, i.e., on channel two.
We then move on according to the agenda. We have also summarized our proposals in the agenda. Can we proceed as proposed? There seem to be no requests for the floor, so this is how we shall proceed. We're now at item counting of votes. I propose that we elect one scrutinizer of the minutes, who shall also act as the supervisor for the counting of votes, as described in the organizational document, and Ulla Silvonen has been proposed for these duties. She seems to be present and is available. Thank you. Are there any other proposals for supervisors of the counting of votes? No. Hence, Ulla Silvonen has been elected. We are now at item four, recording the legality of the meeting.
At this item, we shall state that the notice of the meeting has been published on the company's website and as a stock exchange release on the eighth of April, and the notice of the meeting has also been sent in writing to those shareholders whose addresses are known to the company. The meeting documents comprised, and the materials relating to this meeting and to item 20 on the partial demerger, have been made available on the company's website for the period required by the Companies Act prior to the annual general meeting. Those said documents are also available for inspection at the venue. I note that the general meeting has been convened in accordance with the articles of association and in compliance with the provision on the notice to the meeting. There seem to be no requests for the floor. Therefore, the notice is quorate and duly convened.
We are now at item 5, the shareholders participating in this meeting are those shareholders who have duly registered for the general meeting before the end of the registration period, and who are entitled to participate in the general meeting pursuant to Chapter 5, Section 6, of the Companies Act, and who have either voted in advance during the advance voting period or attended the general meeting at the meeting venue. The list of votes showing the shareholders, proxies, and assistants represented at the beginning of the meeting, and the number of shares by the secretary and Outi Aaltonen as the secretary of the meeting, has promised to go through our attendance at the beginning of the meeting.
At the beginning of the meeting, there are 881 shareholders represented at the meeting, either by advanced voting or in person at the meeting venue, or by legal representative, or authorized proxy. I note that at the beginning of the meeting, 9,000,089 Class A shares and 36,961,731 Class B shares votes, and altogether 13,222,000 and 0.89% of all the votes in the company. Thank you. The list of votes shall be updated in case of a possible vote. We shall also state that based on the advanced voting, the majority of the shareholders are in favor of the proposals made to this annual general... at the chairman's desk, and it will be updated to correspond the... Well, each situation.
A summary of the distribution of the votes cast in the advance vote shall also be annexed to the... In accordance with the Companies Act, the proposal for a resolution, which has been the subject of a preliminary vote, shall be deemed to have been submitted unchanged at the end of general meeting. We shall state that, as the chairman of the board stated, we have all the members of the board of Cargotec and persons nominated as new board members, Cargotec's senior management, Cargotec's chief auditor, and, the proposed... and technical staff are present, present here. This was item six. Any requests for the floor, comments, questions? No. Hence, we will adopt the list of votes and move on to item six. Item six, presentation of the final...
Sorry, the CEO of the company, Casimir Lindholm, in this case, will present the financial statements and an overview of the company's activities in the past financial period. And right after that, the auditor, Heikki Ilkka , will present the auditor's report, and after that, management and auditor of the company. But now, Casimir Lindholm, the CEO, please.
Thank you, Chair. Distinguished shareholders, my name is Casimir Lindholm. I have acted as Cargotec's President and CEO since first of April, 2023. As the chairman of the board mentioned, the CEO's review includes also the first quarter for 2024 exceptionally. Before we proceed with the actual topics, I would like to introduce Cargotec's executive group, executive team to you, and I would ask the members of the executive team. Mikko Puolakka, our Executive Vice President, CFO.
Sami Niiranen.
Then we have Sami Niiranen, President of Kalmar, and future President and CEO, if the general meeting... Hiab.
Leif Byström.
Leif Byström, President of MacGregor.
Outi Aaltonen.
Outi Aaltonen, Senior Vice President, General Counsel. Mikael Laine, Senior Vice President, Strategy, including our own IM and IT process related to the partial demerger. And Mikko Pelkonen, our Senior Vice President, Human Resources. For year 2023, we mentioned in our targets, all three business areas, a strong performance of those businesses, improving their performance had a central role. And I'll say a few words about the results in a moment. MacGregor's profitability turnaround was also a key part of our planning and implementation work last year, and we focused mainly on one division, namely turnaround of the offshore in Norway, regarding the personnel. And as the chairperson of the board mentioned, we've had about 200 people who have been involved with the demerger preparation work on a daily basis, and three key areas have been related to this.
First of all, IT. When companies are separated, that is always in a key role. Secondly, our legal side. We have business operations in more than 100 countries. That, of course, is quite a high amount of work involved. And we also need to prepare the companies for the future as well as last year. In addition, as the chairperson mentioned, we have also focused on the actual business side of our operations. Kalmar's situation, the order book was very good when the year started, and we wanted to make sure that we're able to deliver all the orders that were in the order books in a profitable manner. And at the same time, we wanted to look forward, look into the future, and prepare for that, and we have also focused on that in all three business areas.
The future solutions and products have been in the focus at Kalmar, Hiab, and MacGregor. At the same time, we have been looking into the future as the world changes and has already changed last year. Our order books have normalized and our net sales are decreasing. We have also been looking at our work. For example, in Q3 last year, we announced a EUR 50 million cost savings, and in the spring, the targets have been reached. At MacGregor, the market has been very positive. We have been able to grow our order book, whereas at Kalmar and Hiab, we have been seeing some decrease. Again, the turnaround of the offshore business has had a key role. A project that I mentioned, 200 people involved, has taken up a lot of management's time.
The functional leaders, man, directors are already at the center, and everybody who has business responsibility should focus on that. Changing Cargotec from a conglomerate was something that we were involved with last year, and now, currently, Cargotec is in the holding model. All business operations, development work, improvement, is already happening at Hiab, Kalmar, and MacGregor. So Cargotec, at the moment, is no longer developing anything new. We have moved, during the year, 800 people from Cargotec's centralized functions to these three separate companies. And how did we perform? The result was good, and both Hiab and Kalmar improved their results, and a significant turnaround also took place in the case of MacGregor. The whole project has proceeded according to the plan.
In profitability during last year, and I'm glad to say that all three companies improved significantly their performance. Something to note here, something that is important for all three companies' business areas, is that our service business grew, something that is very important. We can see 2021, 2022, particularly strong years. Now the markets are more normal. They have returned to a normal state, and we can see that the order books decreased last year. And we started last year from a lower level, significantly lower level compared to earlier years. And our cost structure has been modified according to the estimated net sales and the current order books.
is something that also in part enables the partial demerger, and thanks to this, this is all thanks to the great work that has been done in the company in the last decade. The company does not need money from the markets to will both have a strong financial basis and balance sheet, and this can, in a concrete manner, be seen that our gearing was 10% at the end of the year and even lower in the first quarter of this year. Here, you can see all our numbers. I wasn't planning on going through all of them, but a few highlights. Our net sales were EUR 4.5 billion.
Our comparable operating profit, the estimation is that that will go down because, our order book has gone down, but our target is that we stay above 10% on a comparable operating profit. And the return on capital employed, approximately 20%. Significant improvement there as well. If these financial figures and completing, the project are on a good level, same cannot be... Although, here on the left side, we can see that we have made improvements in occupational safety, there's still room for improvement compared to world's best, compared to our competitors. So we still have a lot of work in front of us in this area. Eco portfolio net sales have grown in a positive light, but also there, we have still a lot to improve to hold on to our position as market leader.
For example, when the diesel machines of Kalmar are being exchanged to electric machinery. The next topic, our dividend and outlook for 15 EUR per share, per B share, is the proposal from the board of directors of Cargotec to the general meeting. The dividend record date is third of June, and payment date, tenth of June, 2024. Cargotec aims at a steadily growing dividend that would be approximately 30%-50% of the earnings per share, also in the future. Our outlook for this year. Towards the end of last year, we created the plans, and we prepared for this year. According to the market outlook and the plans, we then created these outlooks for 2024, and Cargotec expects Hiab's comparable operating profit margin in 2024 to be over 12%.
Kalmar's equivalent to its transformation or turnaround process in a positive way. And in the same way, this year, we have also three focus areas. We want to continue the strong business performance in all three business areas. That is, of course, the most important thing. The markets are slightly more challenging than last year. Kalmar in a smooth way, if the general meeting today so decides. Preparation work is already far along. The third area, focus area, is to ensure that MacGregor we find a suitable solution for MacGregor. Day before yesterday, we announced that this process also has started. First quarter of 2024. We have already published the results for this quarter, and all in all, it can be said that the development has been as expected.
Orders are on the level we have expected has been for the past six quarters, EUR 380 million of orders, approximately, and for Kalmar, the orders have been around EUR 400 million for the past three quarters. So these are good things to look at when we are planning things and to get an idea of what the world looks like at the moment. MacGregor in a more positive position, the orders have grown, increased in a positive market for MacGregor. In order to react quickly enough to all these changes, the cost savings program at the moment. Now we are monitoring, following the markets, how the markets are developing.
As we started, the cost savings, the EUR 400 million and EUR 380 million for Hiab, and the EUR 400 million for Kalmar, that, that would be the level we want to proceed with. If things behave differently, then we'll react accordingly. Net sales have also gone down slightly, except in MacGregor's case, which is going up. Operating profit in all three business areas was good. At Hiab, one could say extremely good, considering the history, and Kalmar continues a steady growth. MacGregor's 6% comparable operating profit margin in was loss-making. Profit margin was 11%, and the full order book of MacGregor, which is more than EUR 1.9 billion, is offshore, and EUR 40 million are project-based business, out of which in which we've had challenges with historically.
The project business that we have minimized, and that led, for example, to 350 terminations in Norway in our personnel in order to get a grasp on the business and to... This is going to be approximately 5% of the total business of MacGregor this year. That, in short, was the CEO's review, including the first quarter for 2024.
Thank you, CEO Lindholm, and as it was mentioned previously, we will also hear the company auditor's review. Mr. Ilka, if we can have your address first, and then we will start the discussion. Go ahead, Mr. Ilka. Thank you. My name is Heikki Ilkka . I work for the Ernst & Young auditing company as the chief auditor for Cargotec. And the consolidated financial statements were drawn up in accordance with IFRS, and the statement of the parent companies were compiled in accordance with the statutory requirements in Finland. And the company operating as an auditor for them and for 60 countries in which Cargotec operates, and we have about 16 locations that are the more relevant locations for Cargotec. For the audit of-...
It always starts at the Annual General Meeting in March, March last year, with the planning for the audit that was in March, April, and we presented the auditing plan in the April audit committee's meeting. That starts the so-called interim and the controls for them, and in audit. This interim audit started in June and continued all the way to December, and we have presented in the audit committee's meeting in December, our observations of this interim audit. In between, in July, we also took part in the audit committee's meeting. The actual audit took place then in January, and at the end of this, we had made our observations and presented them first to the risk and audit committee meeting, and then in the board's financial statement meeting, at the end of February.
Key audit matters are in our report, the recognition of revenue over time, including provisions for these two areas were selected as the key audit matters, is that they both involve a lot of discretion and judgment by the management, as well as forecasts for the future, of course, in line with the existing regulations, but still, there's a lot of forecasting. And in our report, we have explained in more detail the auditing measures that we've taken for these areas.
Done, we could state that the consolidated financial statement give a true and fair view of the Group's financial position, and also the financial statements give a true and fair view of the parent company, and this is from the first of January in that the auditors' report and the final statements have been presented to the meeting, including the various documents, the balance sheet. The consolidated financial statements have been available for the shareholders' review on the website, and are also available here at the meeting venue. We can now open the discussion, but before that, I would also propose that the demerger that the CEO mentioned to you will be dealt with under item 20. So perhaps you can save your questions regarding the demerger for that item, and now just go through the financial statements and activities in the...
Peter Friis, I believe. Just please wait for the microphone. Chairman, Peter Friis, ballot number 64.
Many, many thanks and congratulations. The company has been... Good performance, and we can see with these figures that productivity and efficiency have been improved, costs have... to say the least. But when I look at the figures, my question also is related to them because the... And so I wonder whether you were too courageous in your pricing. Perhaps being a little bit more careful with that, you may have attracted some more orders and then ultimately, a better result. This is my first question. And to give some background or comparison, if you could give us a rough estimate on how the three main markets developed with regard to these decreasing order books.
Thank you for good questions. If I will start with the last question, both for Kalmar and Hiab, America has been the key market, the most important market and has worked well. Slowed down last year, and that seems to continue that way. So America has been an important market for both companies. Then, looking at the pricing versus profit or result, as it was stated, when we released the figures for the first quarter this year, the good performance basically comes from three different sources. One is the pricing that you mentioned. In 2021 and 2022, Kalmar and Hiab, on average, increased, and we have held on to those prices, even increased individual product prices at times. So pricing has been important. That is the case....
The second part of a good performance comes from the fact that in a somewhat decreasing market, we've succeeded in the procurements. We've been able to have better prices. We have centralized volumes in the procurement side. And the third thing is that we've been able to track down our costs and adjusted our organization within the organization. These three elements play their part. And about the first question, whether the orders would have been higher with different pricing, maybe the clearest message in that is that we have not lost market share in this market. So we strongly believe that these three things have been the most important ones, and we are... That's where we need to be active to win the big orders in our market.
But other than that, we do believe that these three elements have been essential and have made it possible for us to get the performance that we did last year. This was the first question, and a satisfactory response, apparently. And then to my left, there is a question. Go ahead.
Thank you, Chair. It was not clear to me what will happen to Cargotec when MacGregor apparently is staying, their business is staying there, and if you're selling it out, it is currently not a separate listed company, as far as I understand it. It's just part of one entity from the Finnish Stock Exchange map. What will happen with MacGregor in that case? So please, could you elaborate on that?
Thank you for a good question. Thinking about this part, partial demerger that we will discuss separately in a minute.
First of all, we intend to list Kalmar on the first of July. At the same time, we have started a sales process for MacGregor, with the intention of having it completed during this year, and that means that we will have Hiab remaining, there to replace Cargotec by, by Hiab as a stock exchange, exchange company, and then Cargotec's business name will disappear. Probably it will stay within Hiab, legally speaking. But this is the timeline and the plan for this, procedure. So Hiab will be a pure listed company in that case. Thank you. We already talked about the demerger a little bit, but are there other questions with regard to the CEO's review or the financial statements? People seem to be quite satisfied.
There seem to be no questions or requests for the floor. Then we thank the CEO for a very good review for this financial period as well, which was reported for 2023, have been presented to the general meeting, and the financial statements will be annexed to the minutes. We then move on to item seven, to adopt the financial statements. We can adopt this financial statement. There are no requests for the floor. Hence, I note that the annual general meeting has adopted the financial statements for 2023. We move on to item eight, resolution of the use of the profit shown on the balance sheet and the payment of dividend.
And a while ago, it was already stated that the Board of Directors has proposed to this Annual General Meeting that a dividend of EUR 2.14 be paid and distributed for the financial year 2023, and the dividend will be paid to those shareholders who are registered in the list of shareholders maintained by Euroclear Finland on the record date, and the payment date would be the 10th of June, that the Annual General Meeting has resolved to use the profit shown on the balance sheet and the payment of dividends as proposed. We move on to item 9, resolution of the discharge of the members of the Board of Directors and the President and CEO from liability. The discharge applies to all persons who have served as members of the Board of Directors during the financial year 2023, either for-...
For the whole financial year, or until the 23rd of March, or from 3rd to 23rd of March, respectively, and also the CEOs. And the discharge applies to two CEOs, because the managing director was changed at the turn of March for the financial year. These, with responsibility, there are no requests for the floor, so therefore, discharge has been granted to the members of the board and the CEO. We are now at item 10: presentation of the remuneration report for governing bodies, and this also involves the remuneration policy. It is noted that the remuneration website as of the 9th of April, and it is also available here at the meeting venue. And of course, on the website still.
The remuneration report and the policy will be presented to us by the chairman of the board, as well as the chairman of the Nomination and Remuneration Committee, Mr. Jaakko Eskola, and we will go through it all together for item 11, and go through the items separately then. Now, Mr. Jaakko Eskola.
Thank you, Chair. Shareholders, I shall present first the remuneration report for last year and after that, the issues regarding the remuneration policy. It is always good to remember that the remuneration policy is decided on the annual general meeting, and the company will then carry out the such policy and for the advisory decision at the annual general meeting in 2020. The company has followed this remuneration policy and its decision-making processes and governance models in 2023.
The remuneration report also describes how the company has implemented the remuneration policy, and the remuneration report has been reviewed by the Nomination and Remuneration Committee of the Board of Directors, and approved by the Board of Directors. An advisory resolution on the approval of the 2023 remuneration report will be passed by shareholders at this company's annual general meeting. The remuneration report goes through the remuneration of the board and the remuneration of... I don't think everybody can see it, but as the chairman of the meeting stated, it is available on the website of the company, and it explains the annual fees and the meeting fees of the members of the board.
I will not remember that the fees also include, of course, the actual fee on that duty, and also includes whether that person is also a member of any committee. It's also good to remind people that the members of the board are not under any bonus schemes. These are annual fees and meeting fees related to them. The remuneration of the CEO in 2023 is divided into two parts: the CEO until the end of March, and Casimir Lindholm after that. Casimir Lindholm started in the beginning of April, so for him, we have no short-term incentives or long-term incentives, but the incentives earned by the previous CEO were part of his remuneration.
In my own presentation, I already mentioned that remuneration should somehow be based on the development of the shareholder value graph, the remuneration, and has quite nicely followed the share prices. Here, the remuneration report, and was it so that you want me to go through the remuneration policy while I'm here? Yes. So then, on the remuneration policy of the governing bodies. Again, it applies to the Board of Directors, the CEO and the Deputy CEO, which Cargotec has not had in more recent times, at least. Has been subject to the general meeting, and the remuneration policy is presented here every four years.... To the extent when we're looking ahead. The annual general meeting decision is advisory.
Of course, if there is a lot of talk and ideas, to the extent that we are carrying out some kind of the wrong policy here, we will take it into account, and the remuneration policy can be used as the basis for remuneration, even if the meeting had voted against it. The remuneration of the Board of Directors is based on the same principles as before. There is an annual decision based on the nomination and remuneration committee's proposal. We also take into account the committee work. Level of internationality of the company. So we compare the company operations to other companies of similar size that also operate internationally. And we continue with the same principles, so due to the Board's duties and responsibilities, the Board's remuneration is not linked to the company's performance, and they therefore only include a fixed fee.
The principles for remunerating the CEO is the same. The CEO has a fixed salary and then a short-term incentive. Share prices of the company or other such matters. We also pay a pension and some other benefits. The CEO must also own some shares of the company. And just, in some cases, we also need, perhaps with regard to structure or remuneration recruitment, if we need to hire a new CEO, or it may also be linked to the company's financial position. But this was in brief, the remuneration policy and the report. Thank you, Chairman, for this presentation. We can then start discussing them. So at item 10, it's the remuneration report. Are there any requests for the floor on the remuneration report? No.
So we shall state that this annual general meeting has... We are now at item 11, presentation of the remuneration policy. Rather, perhaps now the discussion of the remuneration policy for governing parties. This is the policy that is adopted every 4 years and has been available for the shareholders, changes to this policy. Do you have any requests for the floor on the remuneration policy? No. Therefore, we note that the annual general meeting has decided to endorse the remuneration. Now, at item 12, resolution on the remuneration of the members of the board of directors, and the main points of the proposed decision on the remuneration of board members are shown on the screen. The proposal is also described in the notice to the meeting and in the agenda distributed to the participants, the meeting materials.
The main content of this proposal is that the chairman of the board would be paid EUR 160,000 per year, the vice chairman of the board, EUR 95,000 each, and euros each, and there are also various roles of committees, whether they are chairman or ordinary members, then the fees would be either EUR 10,000 or EUR 20,000. About 50% as B shares, and the rest would be paid in cash, and the company will be responsible for the transfer tax on the shares paid as remuneration.
In addition, it is proposed that the board members receive a meeting fee of EUR 3,000 per meeting for any such meetings that are held in a different continent from the member's country of residence, and then EUR 1,500 per meeting for any additional meeting. This was the
...These were the main points of the proposal, on the remuneration. Any requests for the floor? Apparently not. So hence, we state that the annual general meeting has decided to adopt the remuneration for the board of directors. Agenda item 13, resolution on the number of the members of the board of directors. According to Article 5 of the company's articles of association, the company's board consists of at least 6 and at most 12 members. The current number is 8, and, as per the notice to the meeting, the recommendation of the Nomination and Remuneration Committee, the board has proposed that 7 members be elected to the board. Are there any requests for the floor related to the matter? Everyone is okay with 7 members in the board, and thus the AGM has of the members of the board of directors, these 7 members.
The company's articles of association says that the term of office of the board ends at the end of the next annual general meeting.
Yeah.
Seven members must now be elected to the board. Note that the Nomination and Compensation Committee of the Board of Directors recommends regarding the selection procedure of board members, that the shareholders take a position on the proposal as a whole at the general meeting. The members proposed for election to the board are shown on the screen, and the proposal is also described in the meeting invitation and in the agenda distributed to the participants. All proposed members are also present here at the meeting, and three of the proposed members, Raija-Leena Hankonen-Nybom, Ilkka Herlin, and Ritva Sotamaa, are current members. The background information of the new proposed members can be seen now on the screen. We'll go through them in short.
The first new proposed member, Eric Alström, who is a citizen of Sweden and United States, has a Master of Science in Management and has acted as a director at Danfoss Power Solutions, and has had long career, for example, employed by General Motors and also a board member at Hempel AS. Then Jukka Moisio, a familiar person to many here, I'm sure, still act as the president and CEO of Nokian Renkaat Oy, Munksjö AB. Then Tuija Pohjolainen-Hiltunen has a degree from Great Britain, an equivalent of Finnish Master of Science, a Finnish citizen, has acted as a director at Kemira Industry and Water Segment.
Luca Sra, Italian citizen, has an MBA, Master of Science in Economy, and is currently acting as the President and CEO of Iveco Group in the truck business and has had other roles at Iveco and Ingersoll Rand, for example. These were the new proposed members to the board of directors, and this would be the composition, these seven members to be elected to the board. Does anyone wish to speak on? Here are the presentations of them. Don't see any requests for the floor, and thus, the AGM has thus decided to elect Raija-Leena Hankonen-Nybom, Ilkka Herlin, and Ritva Sotamaa again to the board, and Eric Alström, Jukka Moisio, Tuija Pohjolainen-Hiltunen, and Luca Sra as the new members of the board of directors.
And also, here, the board has created a proposed on the recommendation of the Audit and Risk Management Committee, and that is auditors' remuneration be paid according to... I don't see any requests, and thus, the general meeting has decided that the auditors will be paid according to the invoice approved by the company. We are on agenda item 16, resolution on the number of auditors. Exceptionally, in this company, the number of auditors may vary, but the board's proposal on the recommendation of the Audit and Risk Management Committee is that the company that one auditor be elected for the company. So one auditor has been proposed for the company. Does anyone has comments or questions?
I don't see any requests for the floor, and thus, the general meeting has elected one auditor for the company or has... 17, election of the auditors. Again, the board has proposed, on the recommendation of the Audit and Risk Management Committee, that the auditing firm, Ernst & Young Oy, be re-elected as the company's auditor, and Ernst & Young Oy has announced that Heikki Ilkka ... I do not see any hands up, so the general meeting has decided to choose the auditing firm, Ernst & Young, as the company's auditor. Agenda item 18, resolution on the remuneration of the sustainability reporting assurance provider. This is a fairly new matter.
Next year, at the annual general meeting, it will be presented, and we need to elect a certifier, assurer, and again, the board is proposing that the fee be paid according to the invoice approved by the company. This seems to be in order, and thus, the general meeting has decided that the assurer will be paid according to the invoice approved by the company. Agenda item 19, board's proposal on the recommendation of the Audit and Risk Management Committee, is that audit as per Chapter 7, Article 6 A of the Limited Liability Companies Act, Ernst & Young be elected as the sustainability audit company, and Ernst & Young Oy has announced that Heikki Ilkka would act as the main responsible verifier for sustainability reporting. Are there any requests for the floor related to this matter?
I don't see any requests, and thus, the general meeting has decided to elect our sustainability audit company, Ernst & Young, as the 2023 partial demerger of Cargotec Corporation, and first, we will hear from the Company CEO, his presentation of the matter, the drivers behind the decision, and then we will go through in detail on this. The floor is yours.
Thank you, Chair. I will go now through, in brief, the background and decisions that the board took approximately a year ago, and how the plan has progressed. The partial demerger: in April 2023, Cargotec plans to demerge Kalmar and Hiab into two world-leading standalone listed companies in order to grow shareholder value. So, other factors and opportunities that this introduces.
First of all, we wanted to grow the potential of Kalmar and Hiab, and communicate in a clearer and more transparent way of these two companies, compared to how this has been done previously. What do these companies actually do? In which markets are they active in? And what type of opportunities these companies will have moving forward? And I find that we have succeeded in this. Shareholders, investors, companies, more transparent as they have previously been under Cargotec. So more information has been provided to the markets. Then raising the interest, and that has been a big part of our work. We have met with interest towards the company in the last year. I have used this as an example of this. When we are recruiting experts, knowledgeable people for positions, also in these recruitment processes, there has been a lot of interest.
If Kalmar and Hiab would have been recruiting a CFO a few years back, and both companies have been and are global companies, EUR 1.6 billion-EUR 2 billion net sales companies, fairly large companies. For those positions, we have not been able... Rather works for a listed company. So the size and the position of the company would require a high-level CFO, but such people usually find positions elsewhere in a listed company, mainly. Then the acceleration of organic and inorganic growth companies, these two companies have been competing for the same resources. Considering the work conducted in the board of directors, several companies under one roof mean that they each get less attention, and they are competing, for example, financial resources, if you want to grow through acquisitions, for example. Then improving the performance of Kalmar and Hiab.
We saw a year ago, and we still see that both companies still need to improve their performance. They need to become more efficient. Cargotec was at times established on multiple companies, and that introduces certain complexity to processes and strategy-wise as well, and this would make it more clearer to administer and manage these companies. Instead of multiple ones. Kalmar and Hiab, there are only some few synergies between them. These two business areas have separate customers, different distribution channels, there is no joint production or manufacturing or development work. So, only very few synergies. However, both companies are leading companies in the world, number one or two in their own markets, and they will be able to . . . in a much more efficient way. Then the structure of the planned transaction.
We went through this in brief as we received a question from the audience previously in the meeting, but the final result is that, of course, today, we have a resolution proposal to the general meeting regarding the separation, and as was previously mentioned, the sales process regarding MacGregor has been initiated, and at the same time, we are preparing Hiab as a separate listed company, as we have done for Kalmar. Systems, processes, a lot of legal issues, and technical issues are involved. So assuming that all of these three things will take place, the final result will be that there will be two new listed companies at the Helsinki Stock Exchange, and Hiab taking Cargotec's place at the stock. Leader, Sami Niiranen, of Kalmar, director, president, we recruited him at the end of 2023.
If the general meeting so decides, on the separation, Sami will become the President and CEO of the new company. Sami has more than 20 years' experience in the industry. Atlas Copco, 15 years, Epiroc, 5 years, and Epiroc, at its time, was separated from Atlas Copco. Currently, Atlas Copco and Epiroc are at the top class in their own industry, looking at the financial figures. The idea in this recruitment is that Sami brings in the know-how, the experience, and is going to work at bringing Kalmar further and forward to the next level. Then the final image, these are the proposed members to Kalmar's... The chairperson of the meeting is going to be discussing in more detail. Chair, this was my presentation at this point.
Thank you for the background information to the company CEO. We will now move to more formal and technical details of the matter. It's going to take a while, so perhaps the CEO will also want to take a seat during that. The Board has proposed to the operation in accordance with the demerger plan and approves the demerger plan so that as part of the demerger resolution, the general meeting resolves as a whole on the matters presented below, which are conditional upon the completion of the demerger. I note that according to the Companies Act, the general meeting can, when deciding on the demerger, either approve the completion of the demerger in accordance with the demerger plan in an unaltered form or reject it. However, it is not possible to make changes to the plan.
I note that the demerger plan and its attachments at the meeting venue today. Pursuant to the, this will be attached to the meeting minutes. All assets, debts, and liabilities that have not otherwise been described in the demerger plan to be moved to Kalmar or are not related to the Kalmar business area, will remain at Cargotec, and otherwise, resolution of the general meeting, the board of directors of Cargotec Corporation may, at any time prior to the completion of the demerger, resolve not to complete the demerger if the board of directors considers that the completion would no longer be in the best interest of the company and its shareholders due to a change in circumstances. In accordance with the demerger plan, the shareholders of Cargotec Corporation shall receive as-...
the demerger consideration, one new share of the corresponding share class, Class A or Class B, of Kalmar Corporation for each Class A and Class B share owned in Cargotec Corporation. That is, the demerger consideration shall be issued on a 1 to 1 basis. The demerger consideration shall be distributed through the book-entry security system maintained by Euroclear Finland automatically, and no action is required from the shareholders of Cargotec Corporation in relation thereto. Kalmar Corporation shall apply for the listing, and the trading will start the first of July at Nasdaq Helsinki. Kalmar Corporation shall apply for the listing of all its Class B shares, primarily on the official list of Nasdaq Helsinki, and the trading in Kalmar Corporation's shares on Nasdaq Helsinki shall begin on the effective date on the third of June, or as soon as reasonably possible thereafter.
And then, as part of the demerger resolution, the general meeting shall decide on the following matters, conditional upon the completion of the demerger. Point A, the incorporation of Kalmar Corporation and approval of its articles of association. The receiving company in the demerger is incorporated in connection with the registration of the completion of the demerger. It has been proposed that the trade name of the company be Kalmar Corporation in Finnish, Kalmar Oyj, and the company's proposed articles of association. And I'm sure those are, are quite familiar to Kalmar shareholders. Then point B, the number of the members of the board of directors, election of the members of the board of directors, and the auditor of Kalmar Corporation, as well as their remuneration.
Directors, has proposed to the general meeting that seven members be elected to the board of directors of Kalmar, the same number as Cargotec, and the proposal includes the of the board, and as ordinary members, Lars Engström, Marcus Hedblom, Teresa Kemppi, Vesa Laisi, Sari Pohjonen, and Emilia Torttila-Miettinen. All these persons are also present at the meeting. In the same way as in Cargotec's board, the new members of Kalmar, members of the board of Cargotec, their presentations can now be seen on the board behind me. Lars Engström is one proposed new member, Swedish citizen. He's an engineer by education and has also acted or worked at Munksjö Group, Munters Group, and Atlas Copco, and at the mining and rock technology business area at Sandvik. He has a seat in Normet and Alcadon Group boards.
Then we have Marcus Hedblom, also a Swedish citizen, engineer, also by education, currently the President and CEO, has had several roles at Spanair and SAS Group, so airlines, and he also is a member of board at Lindab Group. Vesa Laisi, Finnish citizen, and also Master of Economy and engineer, and has acted as the CEO or has had other management positions at companies such as Danfoss. Also Finnish citizen. Education background, Master of Economy and Master of Business, and has acted in Oriola, Fiskars as examples, and is currently the chairperson of Oriola board. Emilia Torttila-Miettinen, also Finnish citizen and an engineer by education, is acting as the Director of Automation Systems business line at Valmet, and has previously had various roles at Valmet and Metsä Group. So these were the proposed members to the board of directors.
Fees, the remuneration, annual fees, EUR 160,000 to the Chair of the Board, EUR 95,000 to the Vice Chair, and each member of the Board, EUR 80,000 for a term. Then the committee fees, depending on the committee and whether the person is an ordinary member or the Chair, from EUR 5,000 to EUR 20,000 per term. According to the corporation's Class B shares, and the rest in cash, and Kalmar Corporation will cover the transfer taxes related to board remuneration paid in shares. And the members of the Board of Directors of Kalmar would be, same meeting fees, that is EUR 3,000 per meeting, as in Cargotec.
For meetings held on a different continent and where the board member is domiciled, and a meeting fee of EUR 1,500 per meeting for additional meetings held outside the regular board and committee meeting cadence. The board of directors of Cargotec further proposes that expenses of Kalmar Corporation's board members related to trips shall be reimbursed in accordance with Kalmar Corporation's policy. The board of Cargotec has proposed that the general meeting elect audit firm Ernst & Young as Kalmar Corporation's auditor. Ernst & Young has notified that Kristina Sandin would act as the responsible auditor, and auditor's fees should be paid according to an invoice approved by Kalmar Corporation. Then we move to subpoint C, decrease of share capital and dissolution of share premium reserve of Cargotec Corporation.
So as part of the demerger, it is proposed that the share capital of Cargotec Corporation be decreased in connection with the demerger from EUR 64 million, the amount by which the share capital of Cargotec Corporation is decreased, shall in whole or in part be used to distribute funds to Kalmar Corporation. It is also proposed that the share premium reserve of Cargotec Corporation of EUR 97 million and that the amount corresponding to the share premium reserve to be dissolved shall, in whole or in part, be used to distribute funds to Kalmar Corporation, as further described in the demerger plan. That was part point C, and then point D, the establishment of the shareholders nomination board of Kalmar Corporation.
The board of directors of Cargotec proposes to the general meeting that a shareholders' nomination board be established for Kalmar Corporation, consisting of four members, and the members one member each, and two largest shareholders of B shares who do not own any A shares, are entitled to appoint one member each. The number of votes held by each shareholder of all shares in Kalmar Corporation are determined based on the shareholders' register of Kalmar. The composition, tasks, and activities of the shareholders' nomination board of Kalmar Corporation are defined in more detail in its proposed charter, that has been available on the company website since first of April, 2024, and in addition, it is available here at the meeting venue. We shall attach the charter if it is approved to the meeting minutes.
Then sub point E, approval of the remuneration policy for governing bodies of Kalmar Corporation. Since a listed company, we must have a remuneration policy. Kalmar Corporation's remuneration policy for governing bodies has been available. It's quite an identical policy as the policy at Cargotec, and this for Kalmar has been available since ninth of April, twenty twenty-four, and will also be attached to the minutes, if approved. Then we need to there we will need a resolution on the remuneration of Kalmar Corporation sustainability reporting assurance provider, and also to be paid according to an invoice approved by Kalmar Corporation, and Ernst & Young act as the responsible, responsible sustainability reporting assurance provider. These were the sub points related to the... demerger plan, and these in connection with the registration of the completion of the demerger.
Now we have gone through the whole package, the whole entity regarding the demerger. Are there questions regarding this? Jukka Sulanto, in the middle of the room, you have the first opportunity to speak. Please, go ahead.
Thank you, Chair. Ballot number 23. Couple of questions. This would have been a good opportunity to think about combining these share classes. Did the board think about it? And if it did, why did you not combine? And another question... during the demerger? Perhaps the CEO can answer to this.
Thank you for this question. Class A and B shares, we discussed it.
... and wanted to continue, as we did with Cargotec. And with regard to the shares that the company owns, we have reserved them for the long-term incentives, incentive programs, and we deal with them in the same way as, any shares owned by shareholders. If I recall, by the company. If I may add, according to the demerger plan, Cargotec will not have any cross-ownership to that company. Would you have other questions here in the front? I believe it's Mr. Erkki Tammi. Go ahead. Yes, thank you. I wonder about the change of business name here. You're changing the name Cargotec Oyj to Hiab. Cargotec still includes MacGregor, but you're selling it. So what if the sale can't be done before the name is changed? So will it be then owned by Hiab?
MacGregor, will it be owned by Hiab as a business unit? Or who will ultimately be selling it in that case? Thank you for a good question. So to clarify, we're not changing the names Cargotec to Kalmar. So the sales process of MacGregor has been started, and if we manage to sell MacGregor then in a year, in that annual general meeting, we perhaps would change Cargotec's Cargotec into Hiab, and then MacGregor would no longer be part of the company. So the name Hiab would only... Another question by Mr. Jukka Sulanto. Chairman, another question. The remuneration of the board of Kalmar will be paid as Kalmar shares. How will they purchase them if Cargotec doesn't own them, and you don't want to give any authorization of purchasing them for Kalmar either?
Let's see what the demerger plan says, but we can or they can be purchased for the members of the board. So with the half of the, remuneration can consist of the, the shares and, and the board members can purchase them. So then the company doesn't have to have them, but we can get them to them. Or you don't have your own, own equity, own shares. And the HR director is nodding his head that this is the intention. Are there more questions with regard to the demerger? In the back, in the middle of the room. Go ahead. Timo Laine , ballot number 3663.
On the partial demerger, it's shares will be listed in Helsinki, Nasdaq, Stock Exchange. Is this a question still not defined? What is the case here?
We intend to list Kalmar on Nasdaq Helsinki, and that was always the, what we've been preparing for. So Kalmar will be a company listed on Nasdaq Helsinki. And if you allow me, Nasdaq Helsinki is the main location for listing, but the market operates now, so that on what kind of platforms it will be traded on, and this is why we have the word primarily here. But the brochure on the demerger and listing on Nasdaq Helsinki will be the primary trading place. Any more questions on item 20 on the agenda? There seem to be in this. Partial demerger has been presented to the annual general meeting. There haven't been any oppositions or other proposals regarding it.
Hence, I state that the general meeting has decided on the partial demerger of Cargotec in accordance with the demerger plan and approved of the other items that are on the agenda of the general meeting, which I just presented.
... Thank you to the CEO. Then a few more technical matters. Agenda item 21, authorizing the Board of Directors to decide on repurchase and/or on the acceptance as pledge of the company's own shares. In this case, the Board of Directors proposes to the General Meeting that the General Meeting authorize the Board. The authorization would apply to a maximum of 6,400,000 shares in the company that may be repurchased and/or accepted as pledge, which no more than 952,000 are Class A shares and 5,448,000 are Class B shares. The authorization would allow for their shares in proportion to ownership. The main points of the decision proposal regarding the Board's authorization are shown on the screen, and the proposal is also described in the meeting.
No notice to the meeting and the agenda distributed to the participants. Are there any requests for the floor regarding this? Erkki Tammi, if I'm correct. Yes, thank you. Previously, it was discussed how the company now has 38,384 own shares. So with that, with this new organization, with this new system, will these current one be owned by Hiab? And, what about, shares that, will possibly be, purchased later? Who will they belong to? Who owns them? Thank you for the question. Through the demerger, only business and assets related to Kalmar's business will move or transferred to Kalmar. Cargotec is going to be closed. That is not to be closed.
This plan is that when MacGregor will be sold from Cargotec, hopefully, the price for MacGregor that will be received will come to Cargotec, and after that, Cargotec only owns the business called Hiab, and after that, Cargotec takes on the name Hiab. Cargotec will not... With business called Hiab, hopefully when MacGregor is sold. Thank you. Are there any other questions regarding the authorization of purchase of shares? Authorization. Then agenda item 22, authorizing the board of directors to decide on the issuance of shares, as well as the issuance of option rights and other special rights entitling to shares.
Here, the board has proposed that it be authorized to issuance of shares, including at most 952,000 shares, either in one or more installments, and would also entitle the issuance of shares of special rights entitling to shares to be carried out in deviation from the shareholders' preemptive rights. The main points are seen on the screen. Are there any requests for the floor regarding this authorization? Jukka Sulanto, please, the floor is yours. Chair, voting slip 23. Does this authorization also entitle to cancel shares? The board always has the right to cancel shares that are in its position without the resolution from a general meeting, but turning them over, issuing them needs an authorization from the general meeting. So, the reply is that, yes, the board may cancel the shares.
Are there any other questions on the floor? So the general meeting has decided to authorize the board according to the proposal regarding the authorization of issuance of shares. In this demerger plan, there are also authorizations included for the board of Kalmar to purchase of own shares and the authorization regarding issue of shares. So Kalmar's board is going to have the same tools at its disposal as the board at Cargotec. We have one actual agenda item left, item 23, authorizing the board of directors to decide on donations. The board has proposed to the general meeting that the board of directors be authorized to decide on donations to science, research, and/or charity in the maximum amount of 100,000 EUR.
The main points of this proposal are, again, seen on the screen, and they are also described in the notice to the meeting. Are there any requests? Tammi, please, the floor is yours. Thank you, Chair. If I remember correctly, last year, there was a similar authorization granted to the board, and I would like to ask how that has been used in the meantime. Thank you. CEO, would you like to reply? Help, assistance to Ukraine has been the main target, and UNICEF. So these two causes we have donated funds to. All in all, yes. Thank you. So for charity, for good causes. Any further questions, questions related? I don't see any requests for the floor, and thus the general meeting has decided to authorize the board to decide on donations in accordance with the board's proposal. Final agenda item, closing of the meeting.
The matters mentioned in the notice to the meeting have been discussed, and it should be noted as shareholders, unless otherwise stated in the minutes. The minutes of the general meeting will be available for shareholders to view on the company's website no later than two weeks from now, that is June 13, 2024. We have remaining, the coffee, will be served. I hope we will meet there, and I want to thank the meeting participants, and declare the general meeting closed at 2:45 P.M. The meeting has ended.