2014-10-29 08:00:00 CET

2014-10-29 08:00:03 CET


REGULATED INFORMATION

English Finnish
Cramo Oyj - Interim report (Q1 and Q3)

Cramo’s Interim Report January–September 2014


Performance improvement actions proceeding

Vantaa, Finland, 2014-10-29 08:00 CET (GLOBE NEWSWIRE) -- Cramo Plc     Interim
Report 29 October 2014, at 9.00 am Finnish time (GMT+2) 

Cramo's Interim Report January-September 2014

Performance improvement actions proceeding

7-9/2014 highlights (year-on-year comparison in brackets):

  -- Sales EUR 171.1 (173.6) million; the change was -1.4%. In local currencies,
     sales grew by 1.9%
  -- EBITA EUR 30.5 (32.3) million, EBITA margin 17.8% (18.6%)  
  -- Earnings per share EUR 0.45 (0.48)
  -- Cash flow from operating activities EUR 33.2 (50.9) million and cash flow
     after investments EUR -5.4 (26.4) million
  -- The Group strategy was updated in September, financial targets unchanged
  -- The new guidance announced in September: In 2014, Cramo Group's sales and
     EBITA margin will be lower compared to 2013

1-9/2014 highlights:

  -- Sales EUR 471.2 (482.2) million; the change was -2.3%. Sales grew in local
     currencies, excluding restructuring in Russia, by 2.1%
  -- EBITA EUR 47.3 (55.2) million, EBITA margin 10.0% (11.4%)  
  -- Earnings per share EUR 0.54 (0.63)
  -- Return on equity (rolling 12 months) 8.2% (8.0%) 
  -- Cash flow after investments EUR -26.8 (15.9) million 
  -- Gearing 85.6% (82.9%)

Guidance for 2014: In 2014, Cramo Group's sales and EBITA margin will be lower
compared to 2013. 


KEY FIGURES AND RATIOS  7-9/14  7-9/13   Change  1-9/14  1-9/13   Change  1-12/1
 (MEUR)                                       %                        %       3
--------------------------------------------------------------------------------
Income statement                                                                
--------------------------------------------------------------------------------
Sales                    171.1   173.6   -1.4 %   471.2   482.2   -2.3 %   657.3
--------------------------------------------------------------------------------
EBITDA                    55.1    55.7   -1.2 %   119.5   125.6   -4.9 %   173.8
--------------------------------------------------------------------------------
EBITA 1)                  30.5    32.3   -5.6 %    47.3    55.2  -14.3 %    79.9
--------------------------------------------------------------------------------
% of sales              17.8 %  18.6 %           10.0 %  11.4 %            12.2%
--------------------------------------------------------------------------------
Operating profit          27.8    29.8   -6.6 %    39.4    45.0  -12.3 %    66.8
 (EBIT)                                                                         
--------------------------------------------------------------------------------
Profit before taxes       24.8    26.1   -5.1 %    29.6    33.9  -12.7 %    51.9
 (EBT)                                                                          
--------------------------------------------------------------------------------
Profit for the period     19.7    20.4   -3.3 %    23.5    26.5  -11.4 %    42.8
--------------------------------------------------------------------------------
Share related                                                                   
 information                                                                    
--------------------------------------------------------------------------------
Earnings per share        0.45    0.48   -6.2 %    0.54    0.63  -13.9 %    1.01
 (EPS), EUR                                                                     
--------------------------------------------------------------------------------
Earnings per share        0.45    0.48   -6.3 %    0.53    0.62  -14.3 %    1.00
 (EPS), diluted, EUR                                                            
--------------------------------------------------------------------------------
Shareholders' equity                              11.13   11.49   -3.2 %   11.56
 per share, EUR                                                                 
--------------------------------------------------------------------------------
Other information                                                               
--------------------------------------------------------------------------------
Return on investment,                             6.9 %   6.8 %            7.7 %
 % 2)                                                                           
--------------------------------------------------------------------------------
Return on equity, % 2)                            8.2 %   8.0 %            8.3 %
--------------------------------------------------------------------------------
Equity ratio, %                                  43.8 %  44.3 %           47.1 %
--------------------------------------------------------------------------------
Gearing, %                                       85.6 %  82.9 %           72.9 %
--------------------------------------------------------------------------------
Net interest-bearing                              415.2   402.4    3.2 %   364.8
 liabilities                                                                    
--------------------------------------------------------------------------------
Gross capital             45.1    31.1   45.1 %   125.5    98.9   26.9 %   129.6
 expenditure (incl.                                                             
 acquisitions)                                                                  
--------------------------------------------------------------------------------
of which                  -0.3    -0.8             11.0    29.6  -62.8 %    29.1
 acquisitions/business                                                          
 combinations                                                                   
--------------------------------------------------------------------------------
Cash flow from            33.2    50.9  -34.9 %    70.4    94.0  -25.1 %   160.3
 operating activities                                                           
--------------------------------------------------------------------------------
Cash flow after           -5.4    26.4            -26.8    15.9             50.3
 investments                                                                    
--------------------------------------------------------------------------------
Average number of                                 2,534   2,465    2.8 %   2,463
 personnel (FTE)                                                                
--------------------------------------------------------------------------------
Number of personnel at                            2,546   2,479    2.7 %   2,416
 period end (FTE)                                                               
--------------------------------------------------------------------------------
-----------------------                                                         
1) EBITA is operating profit before amortisation and impairment resulting from  
 acquisitions and disposals                                                     
--------------------------------------------------------------------------------
- 
2) Rolling 12 month                                                             
-----------------------                                                         



CEO VESA KOIVULA'S COMMENT

“In 2014, the European economies have recovered slower than anticipated, which
has affected the demand for equipment rental services. Cramo Group´s
euro-denominated sales for the first nine months were slightly lower than last
year. However, sales grew in local currencies, excluding restructuring in
Russia, by 2.1%. 

In the third quarter, all business segments achieved a positive result. Still,
Cramo Group's profitability was slightly below last year. The upward turn in
the Swedish market occurred later than we anticipated and the transition
programme in Central Europe has not fully performed according to our
expectations. 

The key near-term initiative in Central Europe is a sales increase in new
product areas and lowering our cost base. In Sweden, the result development has
not yet met our high expectations, but results in the latter part of the third
quarter indicate a favourable development during the remainder of the year. In
Finland, our business operations continued to develop positively despite the
weak market situation. In Norway, our performance improvement programme has
proceeded as planned. In Eastern Europe, profitability improved with the
exception of Fortrent. 

We continue to develop our operations. In the second quarter, we announced
several performance improvement actions, particularly in our Scandinavian and
Central European markets. Reduction of fixed costs and other performance
improvement actions have proceeded as planned and are enhanced in Central
Europe. This gives us a good platform for our profit development going forward. 

In September, we announced Cramo Group's updated strategy. The new strategy is
more focused, involves everyone at Cramo and will enable us to reach our
financial targets. The core of our new strategy is “Cramo People living the
Cramo Story”. Cramo Story is a wide programme aiming at increasing sales,
differentiating ourselves from competition, providing specific customer value
and strengthening our corporate culture in order to achieve our targets. 

In addition to Cramo Story, the implementation of the strategy requires the
adoption of the Cramo Performance Management Model in our key operations and
the completion of the transition programme in Central Europe. Other key
initiatives include the modular space growth strategy, dynamic pricing,
acquisitions and outsourcing. In September, we also published additional
financial information by product area related to our modular space growth
plans. 

Despite that Cramo Group´s profitability was slightly below last year in the
third quarter, I am reasonably satisfied with our result even if the result
improvement in Central Europe is delayed.” says Vesa Koivula, President and CEO
of Cramo Group. 


SUMMARY OFFINANCIAL PERFORMANCE IN JANUARY-SEPTEMBER 2014

Cramo Group's consolidated sales for January-September decreased by 2.3% to EUR
471.2 (482.2) million. However, in local currencies, sales increased by 1.3%.
Sales growth for January-September in local currencies, excluding restructuring
in Russia, was 2.1%. 

The sales for the third quarter decreased by 1.4% to EUR 171.1 (173.6) million.
In local currencies, sales grew by 1.9%. Early in the third quarter, sales
developed more weakly than Cramo expected but towards the end of the quarter,
sales developed according to expectations. 

EBITA for January-September was EUR 47.3 (55.2) million, or 10.0% (11.4%) of
sales. In the third quarter, EBITA was EUR 30.5 (32.3) million, or 17.8%
(18.6%) of sales. 

In January-September, earnings per share were EUR 0.54 (0.63). In the third
quarter, earnings per share were EUR 0.45 (0.48). 

In the third quarter, a positive result was achieved in all business segments.
Despite the weak market situation, the result was good and continued to improve
in Finland. A good result was also achieved in Sweden, even though the market
turn occurred later than Cramo anticipated, towards the end of the period.
Cramo reduced its fixed costs in Sweden as planned. In Norway, operational
efficiency was improved according to the plans and the results are expected to
show towards the end of the year and fully in 2015. In Denmark, the market
situation developed favourably and the result for the third quarter improved
year-on-year. 

In Central Europe, the third-quarter result did not meet expectations. Early in
the year, costs related to the extensive transition programme weakened the
result in Central Europe, whereas in the third quarter, the result was weakened
especially by sales being lower than expected. The utilisation rates of new
product groups are increasing steadily, but construction machinery utilisation
rates in the third quarter were lower than in the previous year. During the
period, the cost level was lowered and performance improvement actions were
increased. Increasing fleet utilisation rates is still a key objective. 

In Eastern Europe, profitability impoved in the third quarter with the
exception of Fortrent, the joint venture operating in Russia and Ukraine.
However, Fortrent succeeded in adjusting its cost base to the weakened market
situation and also Fortrent's result was almost at the previous year's level.
Fortrent's cash flow was strong due to the low investment level. 

In January-September, Cramo Group's cash flow from operating activities was EUR
70.4 (94.0) million. Payments in accordance with a residual tax decision of EUR
9.7 million in the first quarter in Finland had a negative effect on cash flow
from operating activities. The company considers the decision unfounded. Gross
capital expenditure was EUR 125.5 (98.9) million, and net cash flow from
investing activities was EUR -97.2 (-78.1) million. Cash flow after investments
was EUR -26.8 (15.9) million. 

In the third quarter, cash flow from operating activities was EUR 33.2 (50.9)
million. The operating cash flow decreased against last year because of a
change in net working capital amounting to EUR 17 million, but net working
capital is expected to be released periodically in the fourth quarter. Cash
flow after investments was EUR -5.4 (26.4) million. The Group's gearing was
85.6% (82.9%) at the end of September. 


MARKET OUTLOOK

Eurozone economies are still expected to resume growth in 2014, but growth will
be modest. The prolonged Ukrainian crisis and the spreading of its impacts from
Russia to Europe has increased uncertainty about economic development. 

Growth in the eurozone is expected to strengthen in 2015-2016 but more slowly
than what was estimated before. Growth has been slowed down by the strong euro;
however, during the third quarter, the euro's external value started to weaken.
In countries outside the eurozone, such as Sweden, the economy is expected to
grow more quickly. 

In Europe, market-specific differences in the development of construction and
the demand for rental services are considerable. However, in its June forecast
Euroconstruct estimated that construction activity will pick up in all of
Cramo's operating countries in the next few years. 

In the long term, the equipment rental market is expected to grow faster than
construction. Changes in demand usually follow those in construction with a
delay. In addition to construction, the demand for equipment rental services is
affected by industrial investments and the rental penetration rate. 

The European Rental Association (ERA) is expecting equipment rental to increase
in all of Cramo's main markets, except Finland, in 2014. 

(All construction market forecasts presented in this review are estimates by
Euroconstruct, unless otherwise stated.) 


BRIEFING

Cramo will hold a briefing and a live webcast at Kämp Kansallissali, address:
Aleksanterinkatu 44 A (2nd floor) in Helsinki on Wednesday, 29 October 2014 at
11:00 a.m. The briefing will be in English. 

It can be viewed live on the Internet at www.cramo.com. A replay of the webcast
will be available at www.cramo.com from 29 October 2014 in the afternoon. 


PUBLICATION OF FINANCIAL INFORMATION 2015

Cramo Plc's Financial Statements Bulletin for 2014 will be published on
Tuesday, 10 February 2015. 

The Annual Report containing the full financial statements for 2014 will be
published in electronic format in week 10/2015. 

Cramo Plc's 2015 Annual General Meeting will take place on Tuesday, 31 March
2015, in Helsinki. 

In 2015, Cramo Plc will publish three interim reports:

The interim report for January-March 2015 will be published on Tuesday, 5 May
2015. 
The interim report for January-June 2015 will be published on Wednesday, 5
August 2015. 
The interim report for January-September 2015 will be published on Thursday, 29
October 2015. 



CRAMO PLC

Vesa Koivula
President and CEO



Further information:

Vesa Koivula, President and CEO, tel: +358 40 510 5710
Martti Ala-Härkönen, CFO, tel: +358 10 661 10, +358 40 737 6633



Distribution:
NASDAQ OMX Helsinki Ltd.
Main media
www.cramo.com



Cramo is Europe's second largest rental services company specialising in
construction machinery and equipment rental and rental-related services as well
as the rental of modular space. Cramo operates in fifteen countries with 360
depots. With a group staff around 2.500, Cramo's consolidated sales in 2013 was
EUR 660 million. Cramo shares are listed on the NASDAQ OMX Helsinki Ltd.