Core Viewpoint - CMA CGM, the world's third-largest ocean carrier, will re-flag over two dozen ships under the French flag, increasing its home-registered fleet by 30% to 40 ships starting in 2026 [1]. Group 1: Company Actions - CMA CGM plans to register 10 vessels, each with a capacity of 24,000 twenty-foot equivalent units (TEU), under the French flag [1]. - The company had previously pledged a $20 billion investment over four years in U.S. shipping, as announced by CEO Rodolphe Saade during a meeting with President Trump in March 2025 [2]. Group 2: Financial Performance - As of February, CMA CGM had spent approximately $1 billion on terminals in the U.S., specifically in Bayonne, New Jersey, and Los Angeles, but had not invested in new ships from U.S. shipyards [3]. - The company reported a decline in maritime revenue and profits in 2025, despite a modest improvement in total container volume [3]. - Box traffic reached 24.2 million TEUs, reflecting a year-on-year increase of 2.8%, while revenue fell by 6.1% to $34.3 billion [4]. - Operating earnings (EBITDA) decreased from $11.2 billion to $7.9 billion, with the EBITDA margin dropping by 7.8 points to 23% [4]. - Average revenue per TEU declined by 8.7% to $1,414, influenced by a global trade reset, geopolitical disruptions, and excess vessel capacity [4].

Financial Data and Key Metrics Changes - The company generated $471 million in revenue, a decrease of 5% year over year, while adjusted EBITDA was $22 million, down 31% year over year, resulting in an adjusted EBITDA margin of 4.6% [4][18] - Orders totaled $610 million, an increase of 10% from the previous year, with a backlog of $798 million at the end of the quarter [4][17] - Non-new machine sales reached $161 million, up 11% year over year, contributing to a trailing twelve months total of $645 million, marking a record [4][18] Business Line Data and Key Metrics Changes - The Americas drove higher order intake, while European tower crane orders increased nearly 70% year over year, indicating a recovery in that segment [17][18] - Non-new machine sales have shown strong performance, particularly in the European tower crane business, which has been a focus of growth [18][52] Market Data and Key Metrics Changes - In North America, orders through third-party dealer channels increased by 35% year over year, reflecting a healthy rental market [11] - European mobile crane machine orders were lower year over year but showed sequential improvement, with significant growth in tower crane orders [12][13] - The Middle East experienced a slight decline in orders, but deal activity remains robust, particularly in Saudi Arabia and the UAE [13][14] Company Strategy and Development Direction - The company is focused on its "Cranes plus 50" strategy, which aims to enhance aftermarket services and reduce cyclicality by transitioning to a customer-focused approach [26][32] - Investments in new products and a rental fleet are being made to better serve customers and capitalize on market recovery [27][28] - The company is actively managing tariff impacts and has plans to mitigate approximately 80% to 90% of the expected $60 million in tariff costs [6][24] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about demand in North America and noted positive developments in Europe following the establishment of a significant infrastructure fund [11][12] - The company is navigating a challenging operating environment due to tariffs and global trade dynamics but remains committed to its strategic initiatives [26][32] - Management highlighted the importance of customer engagement and feedback in driving product improvements and service offerings [29][30] Other Important Information - The company has integrated AI into its improvement processes, resulting in significant labor savings and efficiency gains [10] - The company has maintained a strong liquidity position, with total liquidity of $307 million as of March 31 [20] Q&A Session Summary Question: Can you unpack the mitigation to the tariff numbers shared? - Management indicated that mitigations include price increases, alternative sourcing, and vendor cooperation, emphasizing that the situation is expected to be short-term [35][36] Question: What proportion of the $45 million tariff cost is attributed to China? - Management noted that the breakdown is complex, involving various tariffs and sourcing strategies, making it difficult to provide a clear percentage [39][40] Question: What is driving the increased demand in Europe? - Management attributed the recovery to low dealer inventory and increased utilization, although they cautioned that the market is still not at peak levels [41][43] Question: Are higher costs for raw materials like steel and aluminum factored into the tariff impact? - Yes, higher costs for raw materials are included in the estimated $45 million tariff cost impact [48] Question: How is the backlog being managed in light of tariffs? - Management plans to use surcharges to address the backlog as tariffs impact imported units [49] Question: What is the current momentum in the U.S. non-residential construction market? - Management noted strong utilization and ongoing large projects, although they acknowledged variability across different segments [50][51] Question: Can you elaborate on the growth in non-new machine sales? - Growth is broad-based, with strong performance in used machines and European tower cranes, supported by expanding service capabilities [52][54]