Accumulated revenues reached EUR 129,729 thousands at the end of September (105,002), up 23.5% on the same period last year

Operating result increased 14.8% to EUR 9,582 thousands (8,345) in the first nine months of the year

Order intake for the last twelve months rolling reached EUR 195,085 thousands

Order book at 30 September 2011 stood at EUR 99,120 thousands, up 36.8% on the same period last year

Cash flow from operating activities amounted to EUR 9,944 thousands (3,995)

Net debt decreased to EUR 21,378 thousands (23,352)

A comment from the CEO

Following the Group’s positive 1H11 results, Cavotec has continued to preform strongly in 3Q11 despite the on-going uncertainty in the financial markets and some early signals pointing to a possible slow down in a small number of the markets where we operate.

Order Intake reached an all-time record high of EUR 162,625 thousands in the first nine months of the year, while revenues also increased strongly to EUR 129,729 thousands. With evidence of continued activity and growth in many of our markets and industries, I believe Cavotec remains on track to deliver strong FY11 results with revenues increasing organically by at least 20% compared to 2010.

In October 2011 Cavotec reached a historic milestone with its share listing on the NASDAQ OMX in Stockholm. In evaluating alternative listings to the NZX we deemed it important to consider Cavotec’s geographical footprint: where the majority of the Group’s sales being in Europe and where the importance of Asia and the Americas continues to increase. We consider a listing on the NASDAQ OMX as an important step to provide additional ways of maximising shareholder value.

I would like to underline our combined focus and dedication to achieving the best possible results by reinforcing my comments to the market following our listing on October 19: “We’ve concluded an important step in the development of the Group by coming to the NASDAQ OMX in Stockholm, now though, let’s get back to work!”

The markets

Cavotec’s Ports & Maritime Market Unit continued to register very strong performance with 3Q11 revenues amounting to EUR 14,293 thousands, up 118.6% compared to 3Q10. Accumulated 

revenues reached EUR 41,639 thousands, up 83.4% versus EUR 22,638 thousands in 2010 with the innovations MoorMasterTM, AMP and Azipod representing 29.1% of the unit’s accumulated revenues.

The accumulated Order Intake for the Market Unit amounted to EUR 60,626 thousands. Importantly the 3Q11 Order Book for Ports & Maritime stands at EUR 39,658 thousands, up 93.5% on the 4Q10 Order Book.

The Airports Market Unit registered revenues amounting to EUR 10,827 thousands in the quarter versus 16,118 thousand in the same quarter of the previous year, which was positively affected by the first time recognition of the revenues from the Bahrain Airport project. Accumulated revenues reached EUR 31,765 thousands, up 15.4% compared on the same period last year.

The accumulated Order Intake for the Airports Market Unit amounted to EUR 35,483 thousands. This figure includes the first Order Intake contributions from the newly acquired Cavotec INET. The 3Q11 Order Book for Airports stands at EUR 35,501 thousands, up 11.9% compared to 4Q10 Order Book.

Cavotec’s Mining & Tunnelling Market Unit recorded record results for the period, with revenues amounting to EUR 7,400 thousands, up 60.5% compared to 3Q10. Accumulated revenues reached EUR 21,499 thousands, up 45% versus EUR 14,832 thousands in 2010, primarily on the back of increased OEM activity throughout the period.

The accumulated Order Intake for the Market Unit amounted to EUR 24,221 thousands. The 3Q11 Order Book for Mining & Tunnelling stands at EUR 8,367 thousands, up 43% compared to 4Q10 Order Book.

Revenues for the General Industry Market Unit amounted to EUR 13,433 thousands, down 10.3% compared to 3Q10. Accumulated revenues reached EUR 34,826 thousands, down 12.8% compared to 2010 reflecting the overall lack of big projects in 2011 and the soft Order Book for this Market Unit at the end of 2010.

Importantly, the accumulated Order Intake for the Market Unit amounted to EUR 42,455 thousands demonstrating an increase in activity for the unit with the Order Book at the end of the period standing at EUR 15,594 thousands, up 91.3% compared to 4Q10 Order Book.

Looking ahead

Looking ahead, it’s clear there are many challenges facing the financial world. The continued uncertainty in global financial markets will undoubtedly have impacts further afield than just the financial world.

As with similar situations in the past, Cavotec’s core strength lies with its employees and innovations. The Company’s management is flexible and is readily adaptable to accommodate sudden developments, while around the world our loyal team is dedicated to achieving the best possible results. Another good indicator is our continuing strong Order Intake resulting in an Order Book at 31 October 2011 of more than EUR 105 million. Furthermore, the Order Book continues to provide us with a clear structure and focus towards our priorities for at the least the next nine months.

Taking the above into account, I am fully confident in Cavotec’s ability to withstand any global downturn as effectively as possible.

Revenues, earnings and profitability

Quarterly results

In 3Q11, revenues reached EUR 45,954 thousands (42,245) representing an organic growth of 6.7%, a 5.1% positive contribution from acquisitions and a 3.0% negative effect from currency movements. Reported operating result amounted to EUR 3,310 thousands compared with EUR 4,800 thousands in 3Q10, influenced by the Bahrain project. Change in the revenue mix and increased costs from the recent acquisition further explain the decrease of the operating result.

The profit for the period has been negatively affected by non-recurring non-operating costs, related to the reincorporation in Switzerland, the delisting from the New Zealand Stock Exchange and subsequent listing on NASDAQ OMX, totalling EUR 1,258 thousands. This was offset by positive exchange movements of EUR 1,572 thousands while net interest expenses remained stable.

The effective tax rate decreased to 24.7% from 27.9% during the same period of the previous year due to the favourable geographical mix. Net profit amounted to EUR 2,309 thousands (2,644) and earnings per share came in at 0.033 (0.041), after taking into consideration the increase of the average number of shares following the INET acquisition.

Nine-months results

Accumulated revenues in the first nine months of the year reached EUR 129,729 thousands (105,002) a 21.8% organic growth rate acquisitions contributed 2.1% while the negative currency effect was 0.3%.

The reported operating profit amounted to EUR 9,581 thousands (8,345), or 7.4% of revenues (7.9%), while the operating profit adjusted for the costs related to the INET acquisition amounted to EUR 9,834 thousands, or 7.6% of revenues.

Non-operating costs amounted to EUR 1,486 thousands while net finance items were positive EUR 337 thousands, a significant improvement compared to the previous year due to favourable exchange rates fluctuations and lower effective interest rates.

Profit before tax was EUR 8,433 thousands compared to EUR 7,536 million for the same period in 2010. Average tax rate was 24.0% (28.2%). Total profit for the period reached EUR 6,410 thousands (5,410) and earnings per share amounted to 0.099 (0.084).

Cash flow

Operating cash flow was very strong in the quarter at EUR 11,007 thousands reflecting good operating profitability and the reversal of working capital movements. Year to date, operating cash flow totalled EUR 9,944 thousands (3,995), financial activities contributed EUR 2,544 thousands, mainly on the back of increased borrowing net of dividends paid, and cash flow from investing activities was negative at EUR 6,028 thousands due to investments in the expansion of the manufacturing facilities.

Net debt

The Group’s net debt decreased to EUR 21,378 thousands, compared to EUR 23,352 thousands for the same period in 2010 and EUR 29,014 thousands at the end of the previous quarter. Cavotec’s 12-month rolling leverage ratio (Net Debt/EBITDA) decreased from 1.35 to 1.23, while the Group’s debt/equity ratio improved from 31.6% to 22.9%.

Employees

The main increase in our employee numbers came following the recent acquisition of Cavotec INET in the USA. On September 30, 2011, the number of Cavotec employees was 891, an increase of 187 since September 30, 2010 and 172 more compared to December 31, 2010.