Hiab's Standalone Future: A Path to Sustainable Growth and Profitability

As Cargotec refocuses its strategy and prepares for the standalone future of Hiab, the company has set new long-term financial targets to measure its success by 2028. These targets reflect Hiab's commitment to sustainable growth, profitability, and customer satisfaction in its on-road load handling equipment business. Let's delve into the key aspects of Hiab's new financial targets and the operational improvements planned to achieve them.



Annual Sales Growth: Over Seven Percent Over the Cycle

Hiab aims to achieve annual sales growth of over seven percent over the cycle, driven by several key factors:

1. Innovation and Product Development: Hiab continues to invest in research and development, introducing new products like electric cranes and electric MOFFETT truck-mounted forklifts to meet the growing demand for sustainable and low-emission solutions.
2. Expansion into New Markets: Hiab's global reach and diverse product portfolio enable it to tap into new opportunities and grow its customer base, both geographically and in terms of customer segments.
3. Strategic Acquisitions and Mergers (M&A): Hiab's M&A pipeline is expected to accelerate, leading to increased sales and market share. The company aims to grow through strategic acquisitions and partnerships, as seen in the case of Cargotec's planned acquisition of MacGregor.
4. Investment in Research and Development (R&D): Hiab's long-term growth strategy involves significant investment in R&D to develop new technologies and solutions, maintaining a competitive edge and driving sales growth.



Comparable Operating Profit: 16 Percent

Hiab's revised comparable operating profit target of 16 percent by 2028 is a significant improvement from its previous target of 13.3 percent in 2021. To achieve this target, Hiab plans to implement operational improvements and cost-cutting measures, such as:

1. Electrification and Digitalization: Hiab is investing in research and development in electrification, robotics, and digitalization to create more efficient and cost-effective solutions for its customers.
2. Improved Supply Chain Operations: Hiab is evolving its operating structure into a model of five operative and more integrated business lines, each with profitability and cash flow responsibility. This new structure aims to improve market positioning, product development, and supply chain operations, leading to increased efficiency and cost savings.
3. Focus on Core Businesses: Hiab is focusing on its core businesses and divesting non-core assets, such as MacGregor, to improve overall profitability. By selling MacGregor to funds managed by Triton for an enterprise value of EUR 480 million, Hiab will be able to focus on its core businesses and use the proceeds to boost its growth plans through innovation and M&A.
4. Cost-cutting Measures: Hiab is planning to reduce costs by improving operational excellence, increasing accountability, and building a more responsive organization. This includes separating MacGregor, which is expected to result in total costs of approximately EUR 25 million, recorded in items affecting comparability as a part of discontinued operations.

Climate Target and Dividend Policy

In its planned standalone future, Hiab is committed to sustainability and responsible business practices. The company aims to reduce greenhouse gas emissions in all three emission scopes by at least 50 percent by 2030 compared to a 2019 baseline. Additionally, Hiab aims for a growing dividend of 30-50 percent of EPS and to keep gearing below 50 percent.

In conclusion, Hiab's new long-term financial targets reflect the company's commitment to sustainable growth, profitability, and customer satisfaction in its standalone future. By focusing on innovation, expansion, M&A, and operational improvements, Hiab aims to achieve its targeted annual sales growth of over seven percent and a comparable operating profit of 16 percent by 2028. As Hiab continues to invest in sustainability and digitalization, it is well-positioned to capture new opportunities and maintain its competitive edge in the on-road load handling equipment market.