Welcome and good morning, everyone, to Kalmar Q4 2025 pre-results call. My name is Katariina Kataja. I'm from Investor Relations at Kalmar. Today's presentation will be given by our CFO, Sakari Ahdekivi. We have a Q&A session at the end of the presentation where you can ask questions. Please also note that this webcast is recorded, and the recording will be found later today at Kalmar's Investor Relations website. But now we are ready to start the presentation, so I will hand over to Sakari.
Thank you, Katariina, and good morning to all, and welcome to our pre-silent call this morning here from Helsinki. So, as usual, the disclaimer in the beginning, and then the normal way of moving forward here. I will recap where we left off after Q3, covering the Q3 highlights. We will also cover the order releases booked in Q4, which we have been able to release, and then also have a look at the latest market indicators for 2026 and have a discussion around those. And as Katariina said, then a Q&A at the end. So with that, so Q3, in a nutshell, you could say that the profitability was strong and the orders were quite low.
But if we go into it in a little bit more detail, so we had record high comparable operating profit margin of 13.8%, and we had, you could say, exceptionally high profitability in services and then a solid profitability on the equipment side. The market activity during the third quarter was in line with our own expectations. So even though the global market uncertainty persisted and has also continued since, as we all know, and the volatility in the tariff and trade policy landscape was there, it was dampening some of the decision-making on the larger deals in Q3. So that was the operating environment in that quarter. However, our services orders increased by 12% year- on- year, and they were strong across the entire portfolio, whereas the equipment orders declined by 20%.
So even though the market activity was pretty much in line with previous, it was impacted by the timing of larger orders, delayed decision-making, and also our order releases were less in Q3 than in the previous quarters. And then we maintained our outlook for 2025, so unchanged comparable operating profit expected to be above 12% in 2025. So that was Q3 in a nutshell. If we still continue a little bit on Q3, on the market activity by region, or the orders rather, across the regions, you could say that it probably makes more sense to look at the year-to-date numbers than the quarterly numbers that fluctuate quite a lot depending on how the larger orders fall into which quarter and into which region. Europe, year-to-date up until the end of Q3, was strong.
There was a decline in Q3 in the quarter explained by the timing of larger orders. The Americas showed nice growth percentages, but let's remember that this was compared to a weak comparison period, both in the quarter and year-to-date, so still, Americas' activity, although better than in 2024, remained on the lowish side, and then IMEA was stable, and services orders were strong across all the regions, then one reminder, as you know, we have somewhat changed our regional segment structure, and in the upcoming reporting in Q4, we will have the new structure where Europe becomes EMEA, Americas remains intact, and then IMEA becomes APAC, which will, to some degree, then change the numbers also, but we have published the comparables already previously, so you are aware of that, but just as a reminder that this will be then changing with the Q4 reporting.
All right, then if we just have a recap of where we are on an LTM basis, not to cover everything here, but maybe a couple of highlights. Over the last 12 months, ending at the end of September 2025, we've been able to increase our order backlog by about EUR 100 million. So the orders have been higher than sales, strengthening, and of course, our ability to deliver then going forward from that point onwards. And then maybe the other thing to note here is the comparable operating profit margin on an LTM basis at 12.7%, perhaps leaving the other metrics here uncommented at this stage.
Then the order releases booked in Q4, so a larger number of releases than in the previous quarter, starting from the left-hand side with a significant order of 16 straddle carriers for Transnet Terminals in South Africa, then 3 hybrid straddle carriers in the U.K., a large order. Then a 10-year strategic supply agreement with Patrick Terminals, not an order as such, but a significant frame agreement, including support for existing and future automation projects across Patrick's terminal network. Then a modernization services agreement with Eurogate Container Terminals to relocate and modify two ZPMC ship-to-shore cranes, a large order in that area in the services segment. Then five Kalmar medium forklift trucks in Finland, and then also a 3-year Kalmar Complete Care service agreement with Yilport Oslo Terminal, and the investment size here is large. So quite a few nice order releases from the fourth quarter.
Then the latest statistics on the global growth expected in 2026. If we start from the top left-hand corner, so the global GDP development, largely unchanged both compared to the previous estimate as well as year- on- year, so 3.3%. Global container throughput has been very strong in terms of percentage growth in 2024 and 2025, and this has already previously been predicted to be lower in 2026, again, largely unchanged from previous quarter. And then the average growth rate in manufacturing output there is actually an uptick for 2026 from 1.7%- 3.9%, and then the global retail output development going slightly in the other direction. So that is the current view of the global growth expectations from public sources. Then the connected fleet activity, and this is, of course, Q3, was on a good level. The only red area there is North America.
So if we look at the other areas, Europe was showing quite good growth, same with Oceania. Also Asia, quarter- on- quarter, + 3%, and then Latin America with quite good activity levels there, and then North America being the one in the minus. One thing maybe to note on that is that the activity levels did see a slight pickup then towards the very end of the year. So some change there. But more specifically, we will come back to this then for Q4 then when we publish our results in February. So that completes the short recap and presentation, and we're ready for questions, which also then Katariina will support as necessary. So please go ahead.
Antti Kansanen has our first question. Please go ahead.
Yeah, good morning, guys. Thanks for taking my questions, a couple of them. First, I'll start with the demand in Q4 or orders in a couple of different directions. So Sakari, do you want to give any kind of comments on the changes on the sentiment around your clients, especially in the Americas during Q4 if we compare to the previous quarter? I mean, obviously, there's a lot of uncertainties just during this week regarding tariffs and things like that. So how would you describe the overall environment in the Americas?
Yeah, of course, it's a daily changing landscape, as we've seen between yesterday and today. But I would say that overall, if we just talk about the entire market, it may sound funny, but we see it rather stable, which means largely unchanged in terms of the sentiment. Then, of course, the timing of the larger orders can then vary from quarter to quarter. And as I just recapped for you in Q3, we didn't have too many of those decisions. So that, of course, then is the factor that changes. But I would say that largely unchanged market sentiment across the regions, but the same applies also for the Americas.
Yeah, and then specifically on the Q4 orders, if let's assume that there's a little bit of a change on the larger order side, and then you have the underlying sentiment remaining around Q3 level, are there any kind of more moving kind of what else is different from Q3? Is there a seasonality in your business that would lead to typically higher orders if I would assume that the underlying market is flattish quarter- on- quarter?
Not seasonality as such. So we're not a seasonal business. Although, of course, if you remember Q4 from last year, we had a large number of larger orders and we had a high order intake. But that doesn't necessarily mean that that's seasonal. It's more the timing of the decision-making, which can vary quite a lot for the large orders.
Okay.
And as we previously said, so the U.S. market remains kind of as it has been, but the market is not completely dead. But looking at the kind of low levels where we are stemming from. So customers are making investment decisions still, but the uncertainty is kind of causing hesitations. And then, of course, if you compare to Q4 last year, we have to remember that then we were talking about the destocking, and that kind of is history, and that chapter is closed. So it's more about the real demand in the market.
That's a good point that Katariina was adding, that the destocking one year ago was dampening the environment. Now, that, of course, ended more or less at the end of Q4 last year, beginning of this year. So that's not there anymore. So that's a change for the better.
But that was a question that was about to ask that if we look at the comparison period year ago, that's at the same time both weak and a strong comparison because you had a lot of large orders, but then you reflect to the destocking. So how's the comp in Europe and America specifically year- over- year? How should I think about that if I try to model it year- over- year?
Yeah, I think if we just talk about the market demand activity without, of course, going to the order levels as such, I think, as we said, fairly stable, but with the exception of no destocking impact anymore in the U.S.
Okay. And then very final one for me is kind of pricing, whether that regards to typical like-for-like pricing or then the exceptional tariff regimes. What is the impact on new orders on rough terrain if we look at Q3 and then going into Q4 and into 2026? How much are the tariffs raising your orders?
Yeah, we commented this in Q3, and of course, to a large extent, we have been able to compensate up till Q3 the tariffs with corresponding price increases. So of course, that then does have an impact on the euro top line to some extent.
I have a bad memory, so I can't really remember what you said specifically on Q3. Was there a number that you gave out?
Not a clear number, but what we said about the equipment segment is that we were quite successful, but not entirely mitigating the tariff impacts on the equipment side. And also we have been or have had actions to mitigate the impacts on services. But then at the same time, it's a continuously evolving landscape, and getting the Q3 and the Q4 was actually Q4 is now the first quarter where you have had most of the tariffs kind of applied directly. So even in Q3, that was half of the quarter. So it's a living creature, and we need to come back to exact details, of course, in the Q4 reporting.
All right. Thank you very much.
Thank you.
Thank you, Antti. And next question comes from Panu Laitinmäki. Please go ahead.
Hi, thanks for taking my questions. I would continue on the same order intake topic. So a couple of things around that one. You have obviously announced more orders than in the previous quarters, but how much can we read into that? So do you usually kind of press release all the more significant orders? And then on the service side, so you also announced some of the service agreements. So are these significant on the service order intake typically?
Typically, if I answer the last one first, of course, typically the larger service contracts do have a significance for the service order intake. Then what I would say about the, I mean, I think we've covered this in earlier calls, that it's tricky with the announcements because we're not able to announce all the orders because it also needs customers' consent that we're able to do this. In some cases, that's not the case. And also then the timing might be the other issue because, as you know from past history, sometimes we also announce orders during the next quarter that were actually recorded in the previous quarter.
Yes, you can conclude something from that, but then there's a lot of things that also are left kind of open due to these factors, both the timing of the announcement and then the fact that we're not announcing all of them due to customer wishes.
Yeah, and Panu, to your question on do we announce all the kind of large significant major orders, it's dependent on the customer that whether we get the acceptance or not.
All right. Thanks. Secondly, just, I would like to ask some of the press releases you've announced in the quarter. So on this supply agreement with the customers, so how does it work? It's a frame agreement. Is this business as usual, or does it mean that this is something specific that we should take into account in the estimates? And then also on the rough terrain products agreement. So could you talk a bit more about what's that?
Yeah, I mean, a frame agreement is, of course, not an order as such, but it's an indication that we have a strong relationship with the customer and of course, it's more about the future orders than coming through that strategic agreement.
Okay. And then the rough terrain products collaboration?
Yeah, I would say similar.
It's one of the partnerships that we've been, if you remember, previously we had one with an Italian company and now the rough terrain, an extension to the portfolio with the partnership principle. The impact of that remains to be seen, but not probably kind of a huge one.
Okay. Thanks. Then final one is on the kind of earnings side and revenues. So I think in Q3 you mentioned you had some delayed deliveries, and we actually in Poland, we discussed that you had some of extra inventory there. So was this significant? Have you given any numbers?
We haven't given specific numbers, but that was a temporary delay, which since was resolved.
Okay. Thank you.
Thank you, Panu. Next question comes from Tom Skogman. Please go ahead.
Yes, good morning. I have a couple of questions. Can you show this picture on fleet activity? What is the definition? Is it engine hours running or number of lifts or minutes the machines are moving in the yards? Or what is the definition really?
The definition is really on the running hours. So how long the kind of equipment is running, and that is what is recorded then into our system of those equipment that we have kind of the possibility to follow. So it's not lifts, it's running hours basically.
It's calculated as running hour even if the machine is not moving as long as it's switched on, basically.
Yeah, in a way, you could think like that. Of course, the engine needs to be on. It's not just that it's connected and standing there.
What's the definition of a significant order and a large order that you show in the order releases? How many millions of euros is what is the kind of the?
What we said when we talk about a large order, it's a single-digit order. And when we talk about the significant order, then we are talking about kind of lower double-digit orders. Then there is even the major where we come into mid-double digit and upwards for that one. So that gives you an understanding on where we are with the order sizes. And that's to help you a little bit on understanding the impact. And then there is even those ones trade press releases, which there is an example, for example, there on the OSTP, which does not include a size. Then we are to really low single-digit on that one.
And then, could you remind how large the heavy industry segment is? We talked so much about ports, but how large is that? And can you update? I mean, we know that a lot of customers in pulp and paper are in trouble. It's a very dynamic market in steel markets, etc. But do you see any impacts on how they invest, and how large is that segment?
As you know, Tom, from our previous presentations, we show the addressable market size in industrial, but we don't report the end customer segments. So from that point of view, the addressable market gives you an idea of the market size.
But are they investing like normal despite troubles, or do you see kind of different patterns compared to history or?
I would say it depends, of course, on the industry, but I would say that it's fairly normal.
And then on the tariffs, I mean, are you kind of confident now when we have had a couple of months with tariffs and probably you have sold out all the inventories? I mean, that price hikes are sticking. Are distributors able to push through these price hikes to the end customers? Can you kind of?
Referring, Tom, to the comments we made in Q3 and what we also covered earlier in this call. So mostly we have been covering the impacts from the tariffs through prices, not completely. And of course, for us, a stable environment is, of course, always better than a moving target because always when you have to adjust, then there's some timing time lag with that, and then you have an impact. So for us, for example, the fact that the tariff threat from yesterday was pulled, that's a good thing because, of course, then it means that for now, at least things are unchanged.
I mean, you know how your competitors with U.S.-based manufacturing are reacting. Of course, they source a lot of components also from probably Europe and Asia. But I mean, are they hiking prices like you, or do they kind of act in a way that would allow them to gain market shares?
Yeah, a little bit tricky to comment too much on competitors, but I would say that rightly, as you say, they also source from outside the U.S. and have, therefore, even though they would manufacture locally, they also have to deal with the tariff issues in the same way and have to make similar decisions on pricing, for example, in order to maintain profitability.
All right, and of course, the order book is up a bit going into the fourth quarter, so what about cost changes going into 2026? Do you have any? Can you help us to understand if there are any moving pieces on OPEX or SG&A costs? You haven't had very large savings in SG&A so far this year, so.
Yeah, I think that one, Tom, we'll have to come back to with our Q4 and when we talk about our guidance and 2026 in more specifics.
Okay. Thank you.
Thank you, Tom. And did Panu have a question still? You have your hand raised.
No, I didn't. Sorry, I just didn't.
All right. Then let's move to Mikael Doepel. Please go ahead.
Yes. Thank you very much. So just firstly coming back to your comment in the presentation about the improved connectivity towards the end of the quarter, I missed that a bit. So if you just could repeat what you said on what you saw. I mean, I guess that's an indication of things improving into Q4. But was that a specific region or what did you say about that?
Yeah, that was referring specifically to the very end of the quarter and the U.S. market. Other than that, we'll have to comment on the activity then in Q4 again in February.
But at the same time, I think it's too early to draw any final conclusions on that because it was really late into the quarter, and that could be just a temporary thing. So let's see.
Okay. And then maybe we could talk a bit about we talked a lot about European demand and the European markets. Could you talk a bit about Europe? I mean, what are you seeing in Europe into the fourth quarter in terms of demand and overall market dynamics, perhaps in terms of competitive pressure and so on?
Yeah, I would say that referring to earlier comments, no big change in Europe in terms of the activity levels and the market environment.
Okay. Would you regard the demand in Europe as good, or how would you describe it?
Yeah, as we showed earlier in the Q3 slides, in the regional slides, so the first three quarters in 2025, Europe has been quite healthy.
Right. And if you think about the customer segments, anything you would like to flag there as particularly strong or still quite weak?
No, it's relatively, I would say, stable on a fairly good level.
And maybe ports and terminals if you don't look at the orders that we have published. So that's what we said already in Q3, that ports and terminals have been strong. And many of the orders also now that are published stems from that end customer segment.
Okay. Okay. Great. And then just finally on the guidance, so just wondering if, I mean, you have been guiding for an operating margin basically for the full year in the past. Is this still the way forward? Do you plan to change the way you guide it? Any thoughts around that?
I would say that, of course, in the end, this is a discussion that we still need to finally have on guidance for 2026. But most likely, we will continue to guide in the same way as up till now.
Okay. All right. Thank you very much.
Thank you, Mikael. And is there a question from Antti still, or is it just your hand?
No, I had a one kind of housekeeping question on Q3 margins. I mean, Sakari, I guess you mentioned service margin being exceptionally good or very good on Q3. So any further comment if that is something that probably won't repeat? And the other question that the Q3 earnings strength was driven by kind of a significantly or a few millions lower group items or the other line on the operating profit. Is that something some of a run rate that is going to be lower, or was that a quarterly one-off?
Yeah, I think, yeah, service, I would say, yes, was, as I said, a bit exceptionally high in Q3 compared to the past, without speaking about the future, and then it's a little bit tricky to get into specifics on the other segment costs in Q4, so we'll come back to that, but it's true that it was lower in Q3 compared to the previous quarters.
But there was no specific reason why it was lower on Q3 that you would like to kind of point out?
No specific reason.
The service margin, was there something related to pricing or something like that? Why it was a bit up on the third quarter?
It was, yeah, I would say that there were probably many factors coming into that and no specific big reason for that.
Strong commercial performance. Of course, in the services, there was also volume growth in Q3 that drove the kind of comparable operating profit.
Okay. Thanks.
Thank you, Antti. Are there any other questions? Please raise your hand if you have any further questions.
Yes, Tom.
I would perhaps still just want to get the question on all these, what you have said so far about cost cutting and where we are. I mean, and just give an update exactly on where we are on that topic, basically.
Yeah. Well, maybe just to recap that we have the Driving Excellence program. Of course, that's not a traditional cost-cutting program because it is a lot about sourcing savings. Then to some degree also, it's about process improvements, which of course then leads to lower cost in the end. Up till now, that has been a less significant component. The Driving Excellence is very much about sourcing savings, not cost-cutting per se. Then, of course, Tom, you remember that we had this fixed cost reduction program, which was actually started back in the Cargotec days. That has, of course, resulted in lower fixed cost specifically, or especially on the SG&A side. That program was finished already some time ago. Of course, we've been getting some benefit from that also in 2025, but nothing new on that side.
The number-wise, the target is the EUR 50 million gross efficiency savings by the end of 2026, and due to Q3, the annualized kind of improvements that were skewed with EUR 24 million.
Yeah. So that was run rate at the end of Q3.
Basically, yeah, this is just making a bridge to 2026. Then if these run rate savings have continued, I mean, they would be something like EUR 35 million or so. And if you just do a P&L bridge, what is the saving in 2026 compared to 2025?
Yeah. That we don't have exactly, and of course, certainly not forward-looking for Q4. But let's remember that the Driving Excellence savings, we've all along said that these are gross efficiency savings, and some of that saving is then reinvested into R&D, for example, or other things. So it's not necessarily all on the bottom line.
Okay. Thank you.
Thank you, Tom. Are there any other questions? Please raise your hand if you have questions.
If not, then I guess we are ready to end the call.
Yes, so if no other questions, we would like to thank you for joining Kalmar's Q4 2025 pre-results call. Our results for Q4 and full year 2025 will be published on 13th of February, approximately at 9:00 A.M. Finnish time. For now, we would like to thank you for joining us today, and we wish you a pleasant rest of the day. Thank you. Goodbye.
Thank you. Bye-bye.
Bye.