Good morning, ladies and gentlemen, welcome to the financial statements January to December 2011 conference call. At this time, all telephone participants are in listen only mode until we conduct a question and answer session, and instructions will be given at that time. If anyone should require assistance during the conference, please press star then zero on your telephone. Just to remind you, this conference call is being recorded. I would now like to hand over to the Chairperson, Paula Liimatta. Please begin your meeting and I will be standing by.
Good afternoon, ladies and gentlemen, and welcome to Cargotec's conference call on financial statements 2011. My name is Paula Liimatta, and I'm the Head of Investor Relations at Cargotec. Today, we have a live audience here in Helsinki and also people on the phone lines. We will start with a presentation by our President and CEO, Mikael Mäkinen. After the presentation, we will have time for your questions. Before asking a question, please wait for a microphone and state your name and company to benefit the listeners on the phone lines. I think we are ready to start. Mikael, please.
Thank you. Welcome everybody. As usual, I will go through, let's say, 15, 20 minutes through the presentation, and after that you have a possibility and hopefully have some questions. Highlights for 2011. I said market activities were healthy. Very happy about that. It's in all segments and all geographies. Based on that, our order intake grew by 18% year-over-year. Out of that, 74% came from IMT and 26% from marine. Again, a healthy development there. In Q4, the sales grew by 11% year-over-year, also that's according to our expectations. The next line, if someone would ask me am I happy or unhappy with 2011, I'm very happy with the development we have done. I am not very happy with the result.
We are not there where we should be. The development has been in the right direction. We have done the right things. On the fourth line here, bullet point, you can see the R&D expenditure was EUR 60 million compared to 2010, EUR 37 million. I think this is worthwhile noting that we got the permission from our board to spend a lot on R&D during 2011 to develop new products. Really, there were times when we didn't have the financial possibilities to develop products. I think that when you look at the results, you have to remember that this very, very big effort that we made on new products, that will come online 2012.
After that, related to solutions, related to marine, mainly related to IMT, meaning terminals and load handling. Q4 operating profit margin 5.8%. Not a great figure. Of course, we are going towards this 10%, but we still have a way to go. I'll come back to that a bit later. Marine, again, high profitability. We have been guiding that it will drop. Yes, it will be drop one day. I'll come back to that as well a bit later. Risk activity in terminals. I think that when we acquired Navis, we came into another league. We are a player, someone who has to be taken into consideration every time when there is a bigger project.
We have, as I've said, we have even customers who are asking us how can they become our preferred customers. I think we have changed the game a bit here. Earnings per share doubled in 2011. Market environment during the year. Load handling, not very surprising, grew at the beginning of the year, softening towards the end of the year, particularly in Europe. Luckily, as you will see later, we have a fairly good part of our business outside Europe. We are not totally dependent on Europe, no. I think that's where we are pushing the other regions of the world. The company has changed a lot during the year, as you will see a bit later in this respect. Container handling grew.
Forecast is that it will grow 2012 as well. More and more products, as I've said many times before, are being moved in containers, things that were not moved in containers earlier. At the same time, the big mega ships are coming on stream. You know about the big mega ships, let's say more than 13,000 TEU. Those ships require new types of ports, bigger cranes because the ships are wider. New equipment ashore. That's driving the business. Also they require bigger feeder vessels to move the containers from the mega ports to ports around that. There are actually only one totally ready, two semi-ready ports to take those mega ships today. On the marine side, bulk handling till the beginning of the year, dried out towards the end of the year.
On the other hand, we have seen activities, positive activities on ro-ro ships and container ships. Service, beginning of the year, we saw a slowdown in the marine service, but now it has been growing towards the end of the year as well. Fairly interesting that we have a good, had a good market environment in all segments, all geographies. Order book grew by 3%. We have to remember that we are now eating of the very long, too long marine order book coming to a healthier level. I'm very happy that we can build on industrial and terminal order book with a shorter delivery time. More important for us in the short run to see that we have a healthy order book there. As I already said, 5.8% for the fourth quarter.
Not a great figure, but bearing in mind a few things. Navis, which due to the accounting principles doesn't show a very good operating profit, actually shows a loss for the first year. It's only an accounting issue. EUR 23 million more in R&D. Then we have the component problem which cost us. Main part of it came in Q4, but EUR 10 million we have made reservation over the years. Of course, we are not manufacturing the components. We are talking to the insurance company, we are talking to the component manufacturers how to solve it over the year. The prudent way is that we have to see to it that our customers are not suffering. We take the cost right now. We'll see then what will happen during 2012.
Cash flow, as you saw over the quarters, you will see it on my slide, didn't look that great at the beginning of the year, but the end result was anyhow good as it was good in Q4. Industrial and Terminal order intake grew by 36% year-on-year. As I said, we are one of the players in all big projects. That's why you see that the biggest project was of course London Gateway, and that's in Europe, Middle East, and a few other bigger projects in EMEA. That's why you see that EMEA is still a very important part of this business. Marine. Yeah, if you look at the trend line, you could say that it's going down. It's still on an okay level.
I think that this is the level that we will see or our forecast is that this is the level we will see on Q1 2012. The way we track it is of course when ships are being ordered, what type of ships are being ordered, how far after that do we normally get to know an order. My estimate is that we will see a lower Q1 2012, and then it will grow again after that. Offshore, signs of recovery. We have seen many offshore ships being ordered. Not that many orders for us yet, but it's in the pipeline. Sales, we were talking about that. Healthy development. If we then go to industrial and terminal operating margin. Yes, you can well say that Q4 was a disappointment.
Yeah, it was a disappointment. I mean, taking away the one of the quality problem of the component, it would have been a flattish figure. If we would then have added a few tens of almost EUR 20 million on R&D that we spent more, then it would have been a healthy development. We thought that for the long run, this is still the right way to do it. Invest now, take the benefits later. Many new products, you know that when you move products from production site to another, you would like to build, have a new generation and so on. We need more products for the developing markets. A bit simpler products. That is a huge market and so on.
From that point of view, development has been good, nobody can be happy with that figure. Marine, as I said, continue very strong. We still maintain our guidance that over the years, it will level out to a healthy double-digit number, which is of course somewhere between 10 and 15. Operating model in Marine is very good, even when the market is going down, we can keep the profitability at a very good level. Of course, that's an area where we try to learn terminal business to take after that operating model. Gross profit development. You can say that it dropped in 1 quarter, 1 quarter's drop is, it's a question of mix and so on. Nothing that I'm particularly worried about for 1 quarter's drop.
Of course, if it's a continuation, then something has to be done. Cash flow didn't look that great for the first three quarters, but as we already guided at that time, it will be fine. We know that we will deliver a lot in December and that's what happened. Service sales, 11% growth year-over-year. Yeah, we are doing a lot on service and my ambition is still to have a kind of a step change in this. As long as it's a steady business, it will grow like this. Not a very big change in geographies. Small changes quarter to quarter. Asia and Europe are the biggest ones, and then Americas after that. I have a few new slides.
One of them is this, here you see the world map, you can see that our five biggest countries represent 50% of our sales. I think it's very, very interesting that we have managed to build a company so that our biggest sales to a specific, to one country is China today. 15% of our sales go to China. Very close to that, 14% of our sales comes from United States. Third one, South Korea with 10%, we have Germany with 6%, and Japan with 5%. If you would take the next five countries, we would be talking about Norway, Belgium, Holland, Sweden and Russia, they are in the level of 2%-4% of sales.
A very, very good, in my opinion, a good development that we are not totally dependent on. Not very much dependent on, for example, South Europe, and the fact that we also have big market in United States. Another slide that I added was the fact that we always get the question that, "Hey, how about the number of employees?" Has been growing by about 1,000 over the year. Sounds like a lot. Why do you need to grow by 1,000? Have a look at the list, what's happening. 129 new positions in Poland. That's our main factory. Very well according to our strategy. 270 new people in USA. That's Navis acquisition. 153 in China. That's our multi-assembly unit in China. 254 new employees in Malaysia.
That's a company that we acquired that is doing crane, big crane service. We were a majority owner, now we own the whole company. Very exciting development when you talk about the lifetime of a total solutions. Next, India, that's Navis. After that, it's going down. 109 positions in Sweden, 62 in Norway, 37 in Australia. You can see that there's a very big shift. We are lowering the number of people in certain countries, very much focusing on Asia and developing world . Of course this other 211, that's, that could be a few new in Finland, something new in Germany. Well, they are small numbers compared to our 10,000 employees. That give you a waterfall diagram of how we are changing the total company.
Earnings per share, EUR 2.42. A dividend proposal by the board of EUR 1 per share. Few words about the key priorities 2012. I've lifted up Asia as number one. We still have to strengthen our position in Asia. We have to be a real player. Remember that Asia is not only China. Asia is also Southeast Asia, it's India, it's the Asian part of Russia. Those are very dynamic markets, very interesting markets. Second point, strengthening the market position in load handling. That's an area where we are working a lot. We have very interesting, exciting projects on how to strengthen our market position, how to build a strategy and the building blocks for load handling. Repositioning in heavy cranes. You know about the joint venture with Rainbow. It will start up during 2012.
First cranes have been manufactured by Rainbow, not in our joint venture facilities, which are not ready yet. That will be our real base for all components that requires a lot of steel. Growth opportunities in marine. We have a very good high market position in many of our marine products. To grow there, we have to look at organic growth, new products. We have to look at acquisitions, also a bit bigger acquisitions to be able to grow in marine. That's the plan. Further development of service, as I said, we have to build a base so that we can take a mega step there. It's a long project. ERP projects now in how many countries do we have it, Eeva, now? In three. Now the rollouts have started.
We had take it slowly first to see that you roll it out, see that everything is fine, now the real rollout is starting. Leveraging the building blocks in terminals. Talk about that. I added one more slide here, and that's what we have done in terminals. I would like you to understand that this is the way we are looking at load handling also. We have to find the real building blocks to change the dynamic in the market. What we have done in terminals is of course, beginning of the year, we acquired Navis. During the year, we started our technology and competence center in Singapore.
At the same time, we made an agreement joint venture with Singapore Technologies, which is the big technology company in that country, to develop some very exciting new type of products for terminals. The technology and competence center in Tampere will be the biggest competence center in the world, biggest area where you can test new types of navigation system, automation system, new type of terminal products. I think that this will help us very much in faster introducing new technologies into the market. Repositioning in heavy cranes, referring to, as I said, Rainbow Heavy and to see that we can be a real player in this market. I think we have the tools now. We know what to do. We know how to do it. Last but not least, winning with products, projects, and services.
Why do I have all this? I think it's very important, even if we are talking about big projects, big solutions, we still have to have very competitive products. That's still the bread and butter for us in terminals is to sell products, terminal tractors, reach stackers, and so on. Very exciting, the development in terminals. Of course, as I've said a few times before, we managed to do it a bit faster than I had anticipated. That's why we were ready to take out terminals or split terminals and load handling. Now we have to do the same with load handling. We have to find a very good growth path for marine as well. 2012. Yes, of course, if you look at the newspaper, it should be a really lousy year. Everything should be bad.
On the other hand, we have a good, healthy order book in marine. We have a very good order book in terminals. We have good order intake in load handling as well. No, I don't know what the 2 last months of 2012 will look like. We expect our sales to grow and operating profit margin as well. That's in line with what you saw earlier. Not only operating profit, but operating profit margin as well will grow during 2012. I think I will stop my presentation here. If you have any questions or concerns or comments, I'm happy to take them. I have here my colleagues as well. Thank you.
Okay. Thank you, Mikael. We will start with the questions from the library. As Mikael said, we also have our CFO, Eeva Sipilä.
This is Tom Skogman from Handelsbanken. I've got a couple of questions, so I think it's best to take just one by one here.
Okay.
First of all, the R&D spending increase in 2011, was that like a step change? Will we just see the same level now continuing, or will it go down this year or next year, or will it continue to go up?
It's a step because you have to remember a part of the R&D spending is of course coming when we acquired Navis. That's a different type of business. That's part of it, and the rest is really a step change. You will see it in the coming years as well until we have a new product portfolio. Yes.
It will continue up in 2012 compared to 2011?
No, it will continue on that level.
Okay.
On the higher level.
About IMT, we continue on the same theme here that we have seen last quarter. Sales continues to go up very nicely. Up 12% quarter-on-quarter now and still no margin improvement. They have, of course, explanations in component prices and increased R&D spending. You know, I think there is still something lacking there. Typically, companies have much better margins when the volumes go up.
Okay. Yes. Let, yeah. Yes. Yes and no. I think you have to remember this step change in R&D. You have to take into consideration this the component EUR 10 million. You have to remember that we have spent quite a lot of time and money in China in the joint venture. Those are kind of one-offs. In addition to that, yes, that's why I wanted to increase the R&D spending because some of our products, they are smaller, small products in terms of volumes, and there you don't get the operational leverage. There are things like that, yes, definitely.
It's not a constant weakening of the pricing power?
No.
There is no con continuous weakening of the gross margin there in that business?
No, no.
On the marine order intake outlook, you said something about it, but is it like a serious threat that orders could go down by, let's say, 30% this year? That would really risk your 2013 earnings, given, marine made up 85% of 2011 earnings.
Let me take the marine. Where did I have the marine order intake? What I said was that I believe that Q1 2012 will be on the Q4 2011 level, and then it will grow after that. Of course, our order book is... Yeah, yeah, you are talking about the second half of 2013 then. You're not talking about 2012.
You don't see any major risk. I mean, that's what I get, need to get confirmed on that.
No, I don't see any major risk, no. You have to remember also that at the same time, when I'm saying that the marine margin will go down, of course, implicitly, that says that the IMT or load handling and terminal market has to go up. I'm quite confident that we know how to do it.
My final question would be about the environmental retrofits in the marine industry. We see some companies expecting a bright future. Do you have any products for that space?
No. You have to remember that, the environmental retrofits are mainly related to engines and so on. There is, of course, more and more of our marine products are electrical instead of hydraulic hatch covers, cranes. I don't think it will be. Okay, maybe not retrofits, but you will see more, a bigger part of them being sold as electrical because hydraulic oil in our product is the environmental hazard. No, you won't see a big retrofit boom. No.
Hi, Erkki Vesola from Swedbank. A couple of questions. First, just a clarification. How large a chunk of the current marine order backlog will be delivered this year?
Have we, Eeva, given any guidance on that?
A big part of it.
Yeah. I would also... Yeah. I think Eeva's answer is correct. A big part of it.
Thank you. About these one-offs. We remember that a few years back, there was this one-off in Kalmar.
Yes.
I was wondering, whether there is something to be corrected in your operating model if these turn out to be more, say, repetitive by nature.
First of all, you have to remember that these two problems are totally unrelated. Of course we changed. I mean, the previous one that you saw that was actually a much bigger one that was related to welding, and it has to do with our welding process. This was a component. Actually, yes, and of course, we have changed it, but when you have a reputable sub-supplier of a component, you actually, at least you believe that the component is correct. Yes, we have changed the process there as well. We have to inspect the components more in detail. This is nothing that you can see on the face of the component. It's something that comes up during the utilization of the product.
A quick follow-up, if I may.
Yes.
Was this linked to some of your Polish subcontractors that you had to replace?
No. No.
Okay, thanks.
Hello. Elina Råman from Evli Bank. A question on marine. If Chinese shipbuilding start to increase a lot, are you currently delivering to them? Would you benefit if the Chinese start building ships in a more big way than so far?
We have to remember the Chinese shipyards depends on the quarter. They are already number one or number two in shipbuilding in the world. If you would see a mega increase, no. I mean, our market share is fairly healthy on all shipyards, so. I don't think that would have a big effect.
Okay. Thank you. About load handling, could you talk a bit about what you have seen during the end of 2011, in terms of order intake, the activity in the market and what you're seeing now?
The activity is on a good level. Yes. Actually, if you also read about the truck manufacturer, their report. It's not very bad. It's actually fairly good. Yes.
Still a follow-up on that. In the U.S. market, what kind of development are you seeing there? I think you said that the market stayed on a very low level after the financial crisis, and it hadn't really recovered. Are you seeing a recovery there now?
yes. Actually, you're seeing a recovery, and the recovery on the U.S. market is replacement recovery. There is now too long time since replacement of some of the equipment. It's the big fleet operators, whether it's Coca-Cola or Walmart. These are the customers now that are saying that, "Hey, now we haven't invested in five, six years.
Okay. Still a final question on the components. What components are they? What products are affected by the problem?
You mean the quality problem?
The quality problem.
We haven't gone into detail on that because we are talking to the supplier of those components, so we won't go into any details.
Okay.
It's under control now. Yes, it costs us and it created a lot of cost because you have to replace those components. You have to check all the other ones. That's something that. Our feedback from the problem we had with Bromma was that actually our market share went up after that because we were considered a very, very responsible supplier. Said, "Hey, we will change this. We will correct this." Now we are doing the same.
Thank you.
Iiris Kemppainen from Carnegie. Still on your guidance, does it assume improving margin in both divisions?
From excuse me. Of course, in 2012, we have 3 divisions. You have Marine, you have Load Handling, and you have Terminals. Yes, on Marine. Sorry, on Load Handling and Terminals, yes.
Could you still elaborate your current pipeline in Terminal?
We took some big projects towards the end of last year. I don't think that you will see any mega projects being ordered during the coming quarter. You will see smaller projects. I'm talking about EUR 10 million-EUR 40 million projects. These mega ones are not coming that often. Of course, everybody is full now with the mega projects. The next delivery for a mega project is far ahead. The customers are also thinking about who can take the next project, how can it be done, when can it be delivered, and so on.
Finally, what is your current tax rate expectation for this year?
Eeva, what would you say?
We would guide on something between 25% and 30%.
Yeah.
to be on a cautious level. Obviously, we've had a track record of being slightly below that now in the past couple of years. That maybe is a good estimate to use.
Okay. Jan Kaila, Nordea Markets. Just on the development during the last 3, 4 months, how would you describe, has there been any change in sentiment of your clients in terms of number of projects out, in terms of how do they think of the future? What kind of signals are you getting them? Has your mood or your view of the coming future changed a lot in the last 3 months for one or the other direction?
Yes and no. In general, no. On the other hand, of course, Load Handling, very short business cycle, can drop very quickly. Other end of the scale, Marine. In Marine, you see less speculative ship building orders being placed. That's maybe a change. I mean, those big ship owners, they don't get financing today. In a way, the interesting thing is that order intake might go down, but so goes very much the cancellation risk as well. It's a healthier market from that point of view. It's a bit of a change of a market, I think. Of course, we are lucky that we are a worldwide company. There are still a lot of pockets where the market is growing.
The market is growing in Africa. The market is growing in, especially in Asia, outside China. It's a very interesting market at the moment. As I said, United States as well, and Brazil. I think we are very Often we are very European-centric and think about that this is the whole world, the European market, but.
This would apply to Marine and Terminals both in sort of the view, or were you speaking more specifically about the Marine side?
I was speaking specifically on the Marine. On the Terminal sides, we haven't seen any projects being postponed due to financing or uncertainty by the customers. No.
Just on this, Mikael, on this quality issue. I mean, you're saying it's under control. Does that mean that all the faulty parts have now been replaced and compensated for and we cannot expect anything more from this line anymore?
No, no. I mean, replacing those because we have very few of those machines that actually have broken down and so we have to test it will take a few years to test them. We just have to take the cost now. We know that, hey, now we have tested so many, we know the percentage of those who have to be replaced, we know the cost of that. Now we take the cost, it takes a few years just technically to do it.
This booking that you made, this EUR 10 million, how much would that cover of. I mean, you're making a guess of the percentage, how many will break down because of the problem, and then you assume the EUR 10 million will cover for that. If you made a wrong assumption, it could be more.
We have tested so many of those machines worldwide. I think that the statistics that we have, we know very well. I think that the figure is accurate. If my guess is that it's more conservative than aggressive.
Okay. Thank you.
Pekka Spolander from Pohjola Bank. I would like to ask about the cost side, cost inflation. Have you seen cost inflation leveling down or are the prices still rising? Related to this question, what is the pricing situation? Have you had a possibility to improve your prices in the current situation?
We have been able to improve our pricing. Of course, it's more difficult when the market is not at a peak. We have been able to increase the prices to cover the cost increases. There is cost increases and I think I don't think it has changed from last quarter, that the cost increase funnily is higher than it should be in this market situation. It's totally run all the time. Can you find other component manufacturer? Can you do something in a lower cost country and so on. The cost inflation, cost increase is, I mean, it's an ongoing battle. We are happy when we have our big factories like the one in Poland and in China.
They are a very cost-efficient way of doing it. It's not easy. It's in this market situation, maybe when we are at a 80% level of a peak, it should be a bit easier. I think that I think that the, as I've said last time, many of the component manufacturers disappeared from the market during the last crisis. We also see today some component manufacturers that have problems in getting financed. That's where the banks are squeezing first. We have to be very careful in who we go to, how we go, and so on.
I'll continue. What about the wage inflation, especially in China? We have seen quite high increases there.
We have seen quite high increases in China. You have to remember that when we talk about the high increases, they come very often in, we are talking about the middle management and management where the high increases are. If you then go. It's increasing, but not that dramatically in the lowest level. There, even if you increase it a few percentages, we are talking about. It's very, very different from Europe. I mean, one manager in Asia, his salary is 100 times or 1,000 times the worker. There's, even if you increase the workers a bit, it's in the total picture is not as dramatic as in Europe.
The interesting thing is, of course, that you look at the Chinese manufacturers of any type of industry, they are now moving inland China, and they are moving to Cambodia, they are moving to Vietnam. Then we are talking about really base product.
It's Erik from Swedbank again. Low capacity utilization at your Polish factory used to be a problem in the past. Now that you've got this, big order intake, where do we stand now and what's the outlook with that?
I don't think that the load utilization of Polish factory has ever been a problem. The problem has been how fast you can ramp it up. You saw here that we had a few hundred new employees there. That's the ramp-up speed. I don't know Eeva what could be a good figure today.
I think what we can say for this year is really that we are expecting a significant increase in the volume output from Poland this year based on, as Mikael was saying, on the sort of successful ramp-up and increase in personnel. Internally, it will have a bigger share and be a bigger importance as a factory.
I mean, If you look at the different scenarios, we have the more optimistic scenario for this year, that's something that the Polish factory cannot do. They cannot employ so many new people. They cannot find them and so on. The utilization rate is fairly high. We start to be on that level that eventually we start to think about the second and third phase III. That depends on the market. Remembering that our factories are fairly simple assembly halls. The main issue is how can you employ and train people.
Yeah, you see that your current subcontractor chain can kind of feed the factory to the full extent?
Yes. That's how we see it. Yeah. Yeah.
This is Tom Skogman from Handelsbanken again. I'm trying to get a feeling for the risk level in your guidance. This is how I'm thinking that, you know, the marine order book is down quite a lot. We know that you have quicker delivery times than you had 1 year ago in the marine order book. In the Industrial and Terminal, you have not had any margin leverage for many quarters. It's quite fair to assume that you will have some sales decrease and some margin pressuring in the marine division. That gives a lot of pressure to the Industrial and Terminal division to improve.
In that division, we have not seen any margin improvement, despite much higher sales the last 2 or 3 quarters compared to the quarters one, you know, one year ago, basically. What will drive up the margins that much in Industrial and Terminal next year when it didn't happen in 2012?
We have of course, mix of products. We have the fact that we have changed the organization. There's not one big thing that will change it. We are. I think we have analyzed it very much in detail. I mean, in this market situation, it's very easy to say that next year is flat. I think that we know that this is the case, that we know the remedy for that. It consists of many small things here and there. What products should you not sell? What products should you sell? Where should they be manufactured and so on. Plus a good base load.
It's right to assume that how you think is that the marine earnings will go down, you know, a bit at least.
Yes.
That has to be compensated by much better performance by the Industrial and Terminal Division.
Yes. That's how we see it today.
Yeah. Okay. Thank you.
I think it's time to move on now. operator, please, we would be ready to take the questions from the conference call participants.
Thank you. Just to remind telephone participants. To register a question, please press star one on your telephone keypad. To cancel the question, please press the hash or pound key. Our first question comes from the line of Christopher Magnerat. Please go ahead with your question.
Yes, hello. Christopher Magnerat from DNB. Three questions. I'll take it one by one. First, a follow-up on Tom Skogman's question on guidance for next year and also related to the one-offs you had in 2011, since you had quite much. Can you specify the one-offs you had except for just the component cost? You also mentioned time and money related to one-offs in the JVs, also costs related to Navis. Can you specify that?
Of course, we had the one-off cost for the component problem. We have the R&D, step change in R&D. We have China, where we have a lot of activities around the JV setting up of that. What else do we have, Eeva? Navis, yes. Navis, but Navis is of course a question of... Maybe Eeva can explain it more in detail. That's confusing.
If you read in the notes part of the report, we have indicated that the deferred revenue treatment in Navis affects our results and sales by some EUR 10 million. We have some tails of that still in the first quarter, when majority of that came in 2011. Then maybe good to remind everyone that we had close to EUR 2 million in acquisition-related costs, which we announced separately earlier in the year. Those would be the areas of the one-off. Although as you obviously can see, we have reported them as part of our earnings. They are operational issues in that sense.
If you look at 12, 2012 estimates, it's, you can think of them as one-offs in that sense.
You have roughly EUR 20-25 million in one-offs in 2011 that will not come in 2012. Is that correct?
I didn't catch the number you said, but.
20, 25.
Sorry, the line is really bad. Did you say 12?
20-25 .
20-25? Yeah.
Yes.
Yeah.
Yes.
That's in that range, yes.
Okay, good. The second thing you talked about is mega ships and the ports that are. You know, that there is 1 port ready for the mega ships today and 2 seem ready. Yeah, can you give me a number of roughly how many big ports there will be in the next coming years? I just get a understanding for the potential in that segment.
For the mega ships to have a global system, I think that you need 10-12 ports.
Some ports might also, might of course decide that... Of course the new, like London Gateway, TraPac in U.S., those ports are ready for the mega ships. Let's say 10 more. Some of them can manage by buying a few ship-to-shore cranes. They are not very efficient after that and so on. It's 10 projects. Investment then from a small one, till a mega investment.
Thank you. Finally, just on the margins bit between Industrial and Terminal in Q4 and 2011, if you can say anything about that?
Eeva, can you?
Sorry again to repeat your question. Margins in Industrial and Terminal going into 2012, was that?
No, no, sorry. The split between Industrial and Terminal.
Okay.
Since you're gonna break out the divisions.
Yeah. Well, we are working on providing obviously the exact pro forma figures, which will then help your help your work. What we said in conjunction with the capital markets day was that if you take the Industrial and Terminal average and assume that terminals is a bit higher and load handling a bit lower, that would be the sort of ballpark where we will be. As said, if you can wait a while, we will provide obviously the exact information.
Will do. Thank you very much.
We appear to have no further questions at this time. I hand the conference back to you.
Thank you, operator. Do we have any more questions here in Helsinki? No? I think it's time to thank you all the participants, and I wish you to have a good day. Thank you.
Thank you very much.
Ladies and gentlemen, thank you for your participation. This concludes today's conference. You may now disconnect your lines. Thank you.