Translation: Original published in Finnish on 02/14/2025 at 00:35 am EET

Kalmar's Q4 report turned positive in terms of order intake, while the operational figures were fairly well in line with market expectations. Correspondingly, we feel the guidance given for this year was rather cautious, but according to the company, it indicates more of a minimum level of expectations. We believe this reflects expectations of relatively stable development, and thus, we made only minor positive estimate revisions for the coming years. Reflecting the stock's moderate valuation, we reiterate our Accumulate recommendation and raise our target price to EUR 38 (was EUR 35) in line with the forecast changes.

Q4 orders exceeded expectations, operational figures aligned with market expectations

Kalmar's revenue decreased by 14% in Q4, which was a more moderate decrease than we and the consensus expected. Kalmar's adjusted EBIT was 53.1 MEUR in Q4, which fell between our and the consensus forecasts. This corresponded to an adjusted EBIT margin of 12.1%, which was well in line with our expectations. The slight decline in the margin level from previous quarters was expected considering the company's earlier comments, driven especially by the Q4 revenue mix (both within products and services). Reported earnings were, however, depressed by negative non-recurring items totaling 14 MEUR, which also pushed reported EPS below expectations. The dividend proposal (EUR 1.00) was in line with our estimate. Q4 orders showed positive momentum, as Kalmar's Q4 order intake (486 MEUR, +20% y-o-y) clearly exceeded both our forecast (436 MEUR) and especially the consensus forecast (409 MEUR). Order growth was double-digit in both equipment and services, and orders received were at a two-year high. According to the company, Q4 orders included relatively many larger orders related to straddle carriers, which may cause some fluctuation in quarterly development. However, order growth in all market areas was positive.

Only minor changes to forecasts

In its 2025 guidance, Kalmar expects its comparable EBIT margin to exceed 12%. We feel the guidance is cautious, considering that the company has exceeded the level in the previous two years. Based on Kalmar’s comments, the guidance can be seen more as a minimum level. In our opinion, the guidance can also be interpreted as expectations of a relatively stable development outlook, also considering the company's market comments, which we found neutral or slightly positive in tone, even though, for example, in the important US distribution customer segment, a significant improvement in demand will likely have to wait until next year. Reflecting the guidance, the report and the company's comments, we made small adjustments to our assumptions for the coming years. Reflecting the higher-than-expected orders, we slightly raised our revenue forecasts for the coming years, which also flowed down to the earnings lines. We expect the 2025 adjusted EBIT margin to be 12.8%

Valuation is rather reasonable

With our updated forecasts, the EV/EBIT ratios considering Kalmar's strong balance sheet in 2025 and 2026 are approximately 10x and 9x. The corresponding net profit-based P/E ratios are approximately 14x and 12x. We believe that this year's multiples are not at an unreasonable level despite the relatively stable earnings growth outlook (cf 2024 ROCE %: 18.7%). Correspondingly, in the longer term, we see the company having good prospects for earnings growth through market growth and the company's efficiency programs. Our estimated medium-term total return expectation thus remains above the required return. We expect the overall valuation picture to gradually recover as market activity supports the positive view on the stock.