Ramirent - Company Announcement

Ramirent’s Capital Markets Day 2015: Ramirent updates long-term financial targets and strategic focus themes to drive profitable growth

Ramirent Plc       Stock exchange release         1 December 2015 at 9.00 a.m.
EEST 

Vantaa, Finland, 2015-12-01 08:00 CET (GLOBE NEWSWIRE) -- 





Ramirent will today hold its Capital Markets Day in Stockholm, Sweden. The
event focuses on Ramirent’s strategy, new financial targets and business
prospects by segment. There are no changes to the previously communicated
market outlook or guidance for 2015. 

“Ramirent is turning focus to growth and operational excellence. The
development since last Capital Market Day in 2013, has not been as we expected.
Mainly this is due to weaker market development in Finland and Norway combined
with slower than expected realisation of the efficiency programme. Therefore
reaching an EBITA margin of 17% on Group level is not realistic in the
near-term. We will however continue our diligent work to implement the common
platform, with a shared business logic, a harmonised operating model and a
common ERP system. At the same time we are developing our business portfolio
aiming to drive profitable growth through three distinct business areas:
General Rental, Solutions and Temporary Space. The three business areas have
different financial characteristics, and Ramirent can grow in all areas, but
the EBITA margin will depend on the exact growth mix between these businesses.
To drive growth and profitability, we have updated our long-term financial
targets and strategic focus themes. In the past years we have harmonised our
operational model “One Ramirent”, we are ready for the next phase of our
strategy, to realise the synergies of the common platform with a strengthened
focus on growth and developing our group business mix. The equipment rental
market continues to offer multiple ways for Ramirent to grow,“ says President
and CEO Magnus Rosén. 

Targeting profitable growth by developing the business mix

“General Rental continues to be the “centre of gravity” of Ramirent. In General
Rental we are aiming for profitable growth through excellent customer service
and efficiency by developing our sales channels, revenue management practices
and securing cost leadership through synergies of the common platform,” Rosén
says. 

“In Solutions, Ramirent is targeting further growth especially in large
industrial construction projects. With our understanding of the customer’s
production process, we aim to deliver value to the customer throughout the
whole project life-cycle, from the early phase where we plan the entire project
site to the very end of the project. Customers are increasingly interested in
safety, energy and cost efficiency of their projects. Our solutions offering
helps customers to move life cycle responsibility from several suppliers to one
organisation in order to reduce costs, lead times as well as improve safety and
efficiency. Our aim is to be a leading European provider of advanced and
sustainable total solutions that simplify business both in construction and
other industries,“ Rosén continues. 

Seeking growth in Temporary Space Business

Ramirent is generally associated with rental of machinery and equipment for the
construction sector and general industry, but it maintains also strong customer
relationships in the Temporary Space business. Today, Ramirent generates
approx. EUR 30 million in annual sales from Temporary Space rental in Sweden,
Denmark, and Norway where it is the market leader. Ramirent’s Temporary Space
customers are found especially in the public sector, in the industry sector and
in the oil and gas sector. Ramirent aims to double its Temporary Space net
sales by growing further in the industry sector with its high-end accommodation
and office modules solutions, and in the public sector with its module systems
adapted for different operations including pre-schools, schools as well as
health care centres. Ramirent’s Temporary Space modules are also
well-positioned to respond to the increasing needs for eco-efficient
solutions,” says Rosén. 

Optimising the fleet management and supply chain and realising the synergies of
the common platform 

Ramirent sees further opportunities to support profitable growth by optimising
the flow, efficiency and service level in its fleet management and supply
chain. Ramirent has in the past years invested into developing its harmonised
operating model One Ramirent and now aims to leverage the synergies of One
Ramirent to outperform the competition in competence and cost-efficiency. 

New financial targets supporting strategy execution

Ramirent’s updated long-term financial targets are: Annual net sales growth
above GDP + 2%-points, ROE of 12% per fiscal year, Net debt to EBITDA below
2.5x at the end of each fiscal year. There is no change to the dividend policy:
the company’s aim is to distribute at least 40% of net profit as dividend to
the company’s shareholders. 

Ramirent’s previous long-term financial targets were: ROE of 18% over a
business cycle, Net debt to EBITDA below 1.6x at the end of each fiscal year
and a dividend payout ratio of at least 40% of net profit. 

Ramirent’s updated financial targets support profitable growth. Ramirent has
multiple ways to grow by developing the business mix in its portfolio between
growth in General Rental, Solutions, Temporary Space and accelerating growth
with selected outsourcing transactions and acquisitions. Further optimising the
fleet management and supply chain and realising the synergies of the common
platform supports improved profitability and the achievement of the ROE target.
“Our new Return on Equity target is more in line with the industry level. It
has been adjusted to ensure our competitiveness to pursue profitable growth in
all business areas, whilst keeping a balanced risk-level. With this target, we
are in the position to execute our strategy to grow in excess of market growth,
without increasing risk in operations. At the same time we can further support
value creation by allowing the financial leverage to a level that is current in
our industry. This way we can both invest in growth and maintain our dividend
payout policy,” says Rosén. 

For 2015, Ramirent reiterates its financial outlook for 2015. Ramirent expects
the market picture to remain mixed, with challenging market conditions in
Finland and Norway. We expect full-year 2015 net sales and EBITA margin to be
similar to the level of 2014 when measured in local currencies. 

Overview of the Capital Market Day programme today

During the Capital Markets Day, President and CEO Magnus Rosén will talk more
about Ramirent’s strategic focus themes, business mix development and growth.
Mikael Salenstedt, Head of Group Temporary Space, explains how Ramirent aims to
build its Temporary Space Business. Dino Leistenschneider, Executive Vice
President, Fleet management and Sourcing, will explain how Ramirent is
improving efficiency by optimising its fleet management and supply chain. As
Interim Managing Director of segments Sweden and Denmark, Magnus Rosén,
describes how Ramirent is driving profitable growth in the strong Swedish
market and Øyvind Emblem, Executive Vice President, segment Norway explains how
Ramirent aims to improve profitability under challenging market conditions.
Anna Hyvönen, Executive Vice President, North Central Europe describes how
Ramirent aims to strengthen further its leading positions and drive synergies
throughout the North Central Europe market area. And finally, Jonas Söderkvist,
Chief Financial Officer and EVP Corporate functions, will explain the new
financial targets and how Ramirent aims to reach them. 

After the management presentations the Capital Markets Day guests will visit
the project Urban Escape, which is an example of a new type of Total Solution
offering coordination to drive down costs and improve lead times. At the Urban
Escape construction site, Ramirent is the single supplier of equipment rental
coordinating on-site services including running on-site a customer centre,
providing safety planning, site arrangement planning, logistics and waste
management planning. The project started in 2014 and is expected to continue
until 2018. 

The Capital Markets Day will start with registration at 9:00 a.m. CEST (10:00
a.m. Finnish time, EEST) at Operakällaren,  Karl XII:S torg, 111 86 Stockholm,
Sweden. All presentations are available in English at
www.ramirent.com/investors. It is also possible to follow the presentations
through a live webcast at approximately 9:30 a.m.-2:45 p.m. CEST. 

FURTHER INFORMATION:
Franciska Janzon, SVP, Marketing, Communications and IR, tel. +358 20 750 2859


Ramirent is a leading rental equipment group combining the best equipment,
services and know-how into rental solutions that simplify customer’s business.
Ramirent serves a broad range of customer sectors including construction,
industry, services, the public sector and households. Ramirent focuses on the
Baltic Rim with operations in the Nordic countries and in Central and Eastern
Europe. In 2014, Ramirent Group sales totalled EUR 614 million. The Group has
2,658 employees in 295 customer centres in 10 countries. Ramirent is listed on
the NASDAQ Helsinki (RMR1V). Ramirent – More Than Machines™. 

DISTRIBUTION: NASDAQ Helsinki, Main news media, www.ramirent.com