2011-05-09 08:00:00 CEST
2011-05-09 08:00:13 CEST
REGULATED INFORMATION
Cramo Oyj - Interim report (Q1 and Q3)
Cramo's Interim Report 1 January-31 March 2011
Sales show strong growth, profitability improvement to continue
Vantaa, Finland, 2011-05-09 08:00 CEST (GLOBE NEWSWIRE) -- Cramo Plc
Interim Report 9 May 2011, at 09.00 am Finnish time (GMT+2)
Cramo's Interim Report 1 January-31 March 2011
Sales show strong growth, profitability improvement to continue
-- Consolidated sales EUR 144.2 (101.4) million, up 42.2%
-- EBITA EUR 2.5 (1.5) million and EBITA margin 1.7% (1.5%); excluding
non-recurring items in Q1/2011 and Q1/2010 result, EBITA improvement EUR
8.7 million
-- Earnings per share EUR -0.19 (-0.24)
-- Cash flow after investments EUR -45.2 (18.8) million, gearing 124.2%
(108.4%)
-- Theisen Group (Germany) consolidated as from February 1, 2011
-- Successful rights issue in April yielding approx. EUR 97.2 million of new
equity after expenses
-- The market outlook for equipment rental services for 2011 is positive. In
2011, the Group's sales is expected to grow both as a consequence of the
Theisen acquisition and organically. The Group's EBITA margin will improve
compared with 2010
KEY FIGURES AND RATIOS 1-3/11 Items 1-3/10 Items Change 1-12/10
(EUR 1,000) affecti affecti
ng ng
compara compara
bility bility
--------------------------------------------------------------------------------
Income statement
--------------------------------------------------------------------------------
Sales 144,217 101,400 42,817 492,103
--------------------------------------------------------------------------------
EBITDA 25,345 22,588 2,757 117,623
--------------------------------------------------------------------------------
Non-recurring capital gain 5,746 -5,746 5,746
in Q1/2010
--------------------------------------------------------------------------------
Non-recurring costs in -2,051 -2,051
Q1/2011 (Theisen
acquisition)
--------------------------------------------------------------------------------
EBITDA excluding 27,396 16,842 10,554 111,877
non-recurring items
--------------------------------------------------------------------------------
Operating profit (EBITA) 2,455 1,503 952 34,478
before amortisation and
impairment of intangible
assets resulting from
acquisitions
--------------------------------------------------------------------------------
Operating profit (EBITA) 4,506 -4,243 8,749 28,732
before amortisation and
impairment of intangible
assets resulting from
acquisitions
excluding non-recurring
items
--------------------------------------------------------------------------------
Operating profit / loss -237 -114 -123 27,389
(EBIT)
--------------------------------------------------------------------------------
Profit / loss before tax -3,962 -6,574 2,612 4,804
(EBT)
--------------------------------------------------------------------------------
Profit / loss for the -5,963 -7,400 1,437 -2,203
period
--------------------------------------------------------------------------------
Share related information
--------------------------------------------------------------------------------
Earnings per share (EPS), -0.19 -0.24 0.05 -0.07
EUR
--------------------------------------------------------------------------------
Earnings per share (EPS), -0.19 -0.24 0.05 -0.07
diluted, EUR
--------------------------------------------------------------------------------
Shareholders' equity per 10.21 9.76 0.45 10.52
share, EUR
--------------------------------------------------------------------------------
Other information
--------------------------------------------------------------------------------
Return on investment, % 1) 3.5 % -1.2 % 3.7 %
--------------------------------------------------------------------------------
Return on equity, % 1) -0.2 % -12.4 % -0.6 %
--------------------------------------------------------------------------------
Equity ratio, % 35.5 % 38.7 % 38.7 %
--------------------------------------------------------------------------------
Gearing, % 124.2 % 108.4 % 103.4 %
--------------------------------------------------------------------------------
Net interest-bearing 462,573 375,191 87,382 382,032
liabilities
--------------------------------------------------------------------------------
Gross capital expenditure 91,272 3,472 87,800 86,219
(incl. acquisitions)
--------------------------------------------------------------------------------
of which related to 72,670 72,670 33,821
acquisitions and business
combinations
--------------------------------------------------------------------------------
Cash flow after -45,226 18,773 -63,999 27,393
investments
--------------------------------------------------------------------------------
Average number of 2,356 2,019 337 2,083
personnel (FTE)
--------------------------------------------------------------------------------
Number of personnel at end 2,457 2,013 444 2,131
of period (FTE)
--------------------------------------------------------------------------------
1) Rolling 12 month
--------------------------------------------------------------------------------
SUMMARY OF FINANCIAL PERFORMANCE IN JANUARY-MARCH 2011
During the quarter Cramo Group completed the Theisen acquisition. Theisen's
figures are consolidated into the Group figures as from February 1, 2011
onwards. To facilitate comparison, the Group now also shows EBITDA and EBITA
figures with non-recurring items excluded. Operationally, the Group's EBITA
improvement in Q1/2011 vs. Q1/2010 was EUR 8.7 million.
After the reporting period, the Group completed its rights issue through which
the Group's equity was strengthened by approx. EUR 97.2 million. This report
does not contain, at any level, proceeds or costs related to the rights issue.
Cramo Group's consolidated sales were EUR 144.2 (101.4) million in the period 1
January-31 March 2011, showing an increase of 42.2 per cent. In local
currencies, sales growth was 34.0 per cent. Sales increased in all business
segments. Growth was particularly strong in Finland, Sweden and Eastern Europe.
The operations of Theisen Group are reported as a new business segment, Central
Europe. Sales developed favourably also in this segment.
As expected, the extraordinarily severe winter season burdened the
first-quarter result. EBITA was EUR 2.5 (1.5) million, or 1.7 (1.5) per cent of
sales. EBITDA was EUR 25.3 (22.6) million. The first-quarter result includes
EUR 2.1 million of non-recurring costs relating to the acquisition of Theisen
Group, whereas the Group's first-quarter result in 2010 included a net capital
gain from certain modular space sales totalling EUR 5.7 million. EBITA
excluding the non-recurring items was EUR 4.5 (-4.2) million, or 3.1 (-4.2) per
cent of sales. EBITDA excluding the non-recurring items was EUR 27.4 (16.8)
million.
Although profitability improved in all business segments, the financial result
was still negative in Denmark and Eastern Europe. Central Europe (Theisen
Group) exceeded the targets set for the winter period, but seasonal
fluctuations are larger than in Cramo's other market areas. In Central Europe
the result was negative but exceeded expectations. Business volumes continued
to increase in Central Europe throughout the period.
Cash flow after investments was EUR -45.2 (18.8) million. Gross capital
expenditure for the first quarter was EUR 91.3 (3.5) million, of which
acquisitions and business combinations (the acquisition of Theisen Group) were
EUR 72.7 (0.0) million. Gearing increased to 124.2 (108.4) per cent due to the
investments.
In order to support the Group's growth strategy and to strengthen its balance
sheet, Cramo arranged a rights issue in April. After expenses, the new equity
raised amounted to approximately EUR 97.2 million. All of the shares offered
were subscribed for in full. The new equity decreases Cramo Group's gearing.
MARKET OUTLOOK FOR 2011 IS POSITIVE
The construction and equipment rental service markets are expected to grow
stronger in almost all of Cramo's market areas in 2011. According to
construction market research organisation Euroconstruct, construction activity
will grow some 3-4 per cent throughout the Nordic region in 2011. Two-digit
growth rates are forecasted for Poland and Estonia. Elsewhere in Eastern Europe
(excluding the Czech Republic), growth is estimated at 4-6 per cent. In Central
Europe, construction activity is expected to increase by approximately one per
cent in Germany, Austria and Switzerland. The growth forecast for Hungary is
some five per cent.
Cramo's experience shows that changes in the equipment rental market follow
changes in construction activity with some delay. From the spring onwards,
rental markets are expected to grow stronger in almost all of Cramo's market
areas compared with the previous year.
Cramo anticipates stronger growth in the demand for rental services than in
construction. Increased interest in equipment rental as an alternative to
owning will contribute to the growth of the rental market. Construction
companies are also finding arrangements where companies outsource their
equipment fleets to a rental service company to be increasingly attractive.
As a consequence of improving prospects, Cramo Group's investments will
increase.
GUIDANCE ON GROUP OUTLOOK
The Group's guidance for 2011 is unchanged: “The market outlook for equipment
rental services for 2011 is positive. In 2011, the Group's sales is expected to
grow both as a consequence of the Theisen acquisition and organically. The
Group's EBITA margin will improve compared with 2010.”
CEO'S COMMENT
”The start of the year 2011 has been in line with our expectations. The
integration of Theisen Group has progressed as planned, as has the
implementation of the Lemminkäinen outsourcing agreement. As we expected, these
significant growth investments have nevertheless had a negative impact on our
profitability in the first quarter. This negative impact will no more affect
the development in the other quarters of the year.
Demand for equipment rental has picked up further in all of our market areas.
Prices have also started to recover from the low downturn levels.
In Finland, the number of new housing starts is at a good level and the outlook
for commercial and office construction is improving. In Sweden, too,
construction activity is expected to increase at a rate exceeding the previous
year's level, thanks to strong economic growth. I am confident that we will see
positive developments in other market areas as well.
The Central European business segment, formed in connection with the
acquisition of Theisen, will be of particular focus of interest in the current
year. What is also new is our position as the second largest equipment rental
company in Europe. I believe this will strengthen our market position in all of
our market segments.
Taken together, the recovery in the equipment rental market, the streamlining
measures we implemented during the downturn and our stronger market position
provide a solid starting point for the favourable development of our business”,
says Vesa Koivula, President and CEO of Cramo Group.
SALES AND PROFIT
Cramo is a service company specialising in equipment rental services, as well
as the rental and sale of modular space. Its equipment rental services comprise
construction machinery and equipment rentals and rental-related services. These
rental-related services include construction site and installation services. As
one of the industry's leading service providers in the Nordic countries and
Central and Eastern Europe, at the end of the period under review, Cramo Plc
operated in Finland, Sweden, Norway, Denmark, Estonia, Latvia, Lithuania,
Poland, the Czech Republic, Slovakia, Russia, Germany, Austria, Switzerland and
Hungary.
Cramo Group's consolidated sales were EUR 144.2 (101.4) million in the period 1
January-31 March 2011, showing an increase of 42.2 per cent. In local
currencies, sales growth was 34.0 per cent. Sales increased in all business
segments. Growth was particularly strong in Finland, Sweden and Eastern Europe.
The operations of Theisen Group are reported as a new business segment, Central
Europe. Sales developed favourably also in this segment.
As expected, the acquisition of Theisen and the extraordinarily severe winter
season burdened the first-quarter result. EBITA was EUR 2.5 (1.5) million, or
1.7 (1.5) per cent of sales. EBITDA was EUR 25.3 (22.6) million. The
first-quarter result includes EUR 2.1 million of non-recurring costs relating
to the acquisition of Theisen Group, whereas the Group's first-quarter result
in 2010 included a net capital gain from certain modular space sales totalling
EUR 5.7 million. EBITA excluding the non-recurring items was EUR 4.5 (-4.2)
million, or 3.1 (-4.2) per cent of sales. EBITDA excluding the non-recurring
items was EUR 27.4 (16.8) million.
Although profitability improved in all business segments, the financial result
was still negative in Denmark and Eastern Europe. In Central Europe (Theisen
Group) seasonal fluctuations are greater than in Cramo's other market areas due
to the composition of the fleet. In Central Europe the result was negative but
exceeded expectations.
The Group's credit losses and credit loss provisions were EUR 1.0 (1.7)
million. The result also includes impairment losses on the fleet totalling EUR
0.3 (0.6) million.
Expenses associated with options totalled EUR 0.7 (0.4) million.
EBIT was EUR -0.2 (-0.1) million, or -0.2 (-0.1) per cent of sales. Profit
before taxes was EUR -4.0 (-6.6) million and profit for the period EUR -6.0
(-7.4) million. Net finance costs were EUR 3.7 (6.5) million.
In accordance with the prudence principle, Cramo did not recognise a deferred
tax asset for most of its loss-making companies in the first quarter of 2011.
Earnings per share were EUR -0.19 (-0.24). Diluted earnings per share were EUR
-0.19 (-0.24).
Return on investment (rolling 12-months) was 3.5 (-1.2) per cent and return on
equity (rolling 12-months) -0.2 (-12.4) per cent.
CAPITAL EXPENDITURE AND DEPRECIATION/AMORTISATION
Gross capital expenditure for the period was EUR 91.3 (3.5) million, of which
EUR 72.7 million relates to acquisitions and business combinations, the
acquisition of Theisen Group.
Reported depreciation and impairment on equipment and intangible assets were
EUR 22.9 (21.1) million.
Amortisation and impairment on intangible assets resulting from acquisitions
totalled EUR 2.7 (1.6) million. At the end of the period, goodwill totalled EUR
159.4 (142.0) million.
Equipment rental is characterised by seasonal fluctuations. In line with the
construction industry's seasonal fluctuations, the first quarter is usually the
weakest quarter, both in terms of sales and profitability. In Cramo's
operations, the modular space product group and, to a certain extent,
construction site services such as heating and drying services help moderate
the effects of seasonal variations.
FINANCIAL POSITION AND BALANCE SHEET
The Group showed a positive net cash flow of EUR 3.6 (0.5) million from
operating activities in January-March. The cash flow from operating activities
was affected by a negative change in net working capital and by tax payments
being typical for the quarter. Cash flow from investing activities was EUR
-48.9 (18.3) million and cash flow from financing activities EUR 39.6 (-24.3)
million. At the end of the period, cash and cash equivalents amounted to EUR
16.8 (13.4) million, with the net change amounting to EUR -5.6 (-5.5) million.
The Group's cash flow after investments was EUR -45.2 (18.8) million.
At the end of the period, the Group's balance sheet included EUR 7.1 (5.9)
million of assets available for sale.
At the end of the period, Cramo Group's gross interest-bearing liabilities were
EUR 479.3 (388.6) million.
Of the variable-rate loans, EUR 181.5 (147.0) million were hedged by way of
interest rate swaps on 31 March 2011. Hedge accounting is applied to EUR 105.1
(100.8) million of these interest rate hedges. On 31 March 2011, Cramo Group
had undrawn committed credit facilities (excluding leasing facilities) of EUR
111.7 (128.5) million, of which non-current facilities represented EUR 96.0
(95.0) million and current facilities EUR 15.7 (33.5) million.
On 31 March 2011, Cramo Group's net interest-bearing liabilities totalled EUR
462.6 (375.2) million. Gearing increased due to investments, particularly the
acquisition of Theisen, and was 124.2 (108.4) per cent at the end of the
period. The rights issue arranged in April decreases Cramo Group's gearing.
The hybrid bond-related interest liabilities for the period 29 April 2010 to 31
March 2011 are shown, according to the bond agreement, on the balance sheet as
a liability following the Annual General Meeting's decision to distribute a
dividend of EUR 0.10 per share. Previously the corresponding hybrid
bond-related interest liability has been included in off-balance sheet
liabilities.
Property, plant and equipment amounted to EUR 560.4 (510.3) million of the
balance sheet total. The balance sheet total on 31 March 2011 was EUR 1,059.8
(902.8) million and the equity ratio was 35.5 (38.7) per cent.
Rental liabilities associated with off-balance sheet operational leasing
agreements totalled EUR 58.3 (38.2) million on 31 March 2011. Off-balance sheet
liabilities for office and depot rents totalled EUR 113.4 (79.2) million.
GROUP STRUCTURE
At the end of the period under review, Cramo Group consisted of the parent
company Cramo Plc, which provides group-level services, and as operating
companies, its wholly-owned subsidiaries in Finland, Sweden, Norway, Denmark,
Estonia, Latvia, Lithuania, Poland, the Czech Republic, Slovakia, Russia,
Germany, Austria, Switzerland and Hungary. Cramo Plc also owns a financing
company in Belgium and a company in Sweden which offers group-level services.
Cramo Management Oy, owned by the members of the Executive Committee and
previously consolidated into the Group according to SIC-12 as a Special Purpose
Entity, became a wholly-owned subsidiary of Cramo Plc through a share swap
carried out in February 2011.
At the end of the period under review, equipment rental services were provided
through a network of 381 (281) depots, of which 74 (69) were
entrepreneur-managed.
BUSINESS DEVELOPMENT
On 11 January 2011, Cramo announced it had signed an agreement to acquire 100
per cent of the share capital of Theisen Baumaschinen AG. The acquisition was
closed on 31 January 2011, and Theisen Group was consolidated into Cramo Group
from 1 February 2011.
The preliminary purchase price, subject to certain adjustments, was
approximately EUR 47.3 million, of which EUR 40 million was paid in cash and
the rest in Cramo Plc's new shares pursuant to a directed share issue made to
the seller, equalling approximately EUR 7.3 million. The seller was Arrex
Beteiligungs-GmbH, a privately-owned holding company. Cramo also assumed
Theisen's net interest-bearing liabilities totalling some EUR 34.5 million.
Cramo used its long-term credit facilities to finance the cash part of the
transaction. The share issue in which the 374,532 new Cramo Plc shares were
directed to the seller was based on the share issue authorisation granted to
the Board of Directors by the Annual General Meeting held on 13 April 2010.
Theisen Group is among the top three providers of equipment rental services in
Germany. Some 90 per cent of its sales are generated in Germany, which is
Europe's largest construction market. The size of the German equipment rental
market is estimated at approximately EUR 3.1 billion. Theisen Group also
operates in Germany, Austria, Switzerland and Hungary. On the closing date of
the acquisition, Theisen Group had 274 employees.
Cramo expects the acquisition to be earnings-neutral for Cramo Group in 2011
and earnings-accretive thereafter.
The Group's joint enterprise resource planning system was launched in the
equipment rental operations in Finland. The system was introduced earlier in
Sweden, and it will be launched in other parts of the Group in stages.
Cramo's strategic targets for 2010-2013 are to be customers' first choice as
well as the “best in town” in the rental business. Other strategic targets are
to grow profitably faster than the market and to act as a driver of rental
development.
Cramo Group's financial targets for 2010-2013 are as follows: sales growth
above 10 per cent per annum, EBITA margin above 15 per cent of sales, return on
equity (ROE) above 15 per cent and maximum gearing at 100 per cent. The Group's
target is to reach the financial target levels as soon as possible during the
period 2010-2013.
HUMAN RESOURCES
During the period under review, Group staff averaged 2,356 (2,019). In
addition, the Group employed some 113 (61) persons as hired work force. At the
end of the period, Group staff numbered 2,457 (2,013). The number of staff is
reported as full time equivalent (FTE).
The geographical distribution of personnel at the end of the period was as
follows: Finland, 628 (500) employees; Sweden, 704 (692); Norway, 189 (181);
Denmark, 119 (118); Central Europe, 275; and Eastern Europe, 542 (522).
PERFORMANCE BY BUSINESS SEGMENT
Cramo Group's business segments consist of Finland, Sweden, Norway, Denmark,
Central Europe, which includes Germany, Switzerland, Austria and Hungary, and
Eastern Europe, which includes Estonia, Latvia, Lithuania, Poland, the Czech
Republic, Slovakia and Russia. In addition to segment information, Cramo also
reports on the order book value for modular space.
Finland generated 19.3 (18.5) per cent of the total consolidated sales for
January-March 2011, Sweden 46.6 (50.5) per cent, Norway 13.8 (16.6) per cent,
Denmark 4.3 (5.6) per cent, Central Europe 7.3 per cent and Eastern Europe 8.8
(8.8) per cent. The Central European business segment consisting of Theisen
Group became part of Cramo Group on 1 February 2011. As announced previously,
Cramo will not publish comparison data for Central Europe for 2010.
Finland
Finland (EUR 1,000) 1-3/11 1-3/10 Change % 1-12/10
--------------------------------------------------------
Sales 28,191 19,056 47.9 % 99,583
--------------------------------------------------------
EBITA 2,176 550 295.5 % 12,466
--------------------------------------------------------
EBITA-% 7.7 % 2.9 % 12.5 %
--------------------------------------------------------
No of employees (FTE) 609 480 26.9 % 570
--------------------------------------------------------
No of depots 55 55 0.0 % 58
--------------------------------------------------------
The growth in construction seen in the last quarter in 2010 continued. The
number of building permits granted for residential construction increased by
approximately one-fifth in January compared with the corresponding period the
previous year. In renovation projects, activity is brisk.
The Finnish operations reported sales of EUR 28.2 (19.1) million for
January-March, for an increase of 47.9 per cent. EBITA was EUR 2.2 (0.6)
million, or 7.7 (2.9) per cent of sales.
Sales growth was even stronger than expected. Sales increased as a result of
the strong recovery of the markets and the significant outsourcing agreements
signed at the end of 2010. However, non-recurring expenses related to the
cooperation started with Lemminkäinen in particular and to the introduction of
the new enterprise resource planning system weakened profitability in the first
quarter. The new enterprise resource planning system was launched in Finland at
the beginning of February.
Fleet utilisation rates were at a good level, and Cramo decided to increase its
fleet investments.
According to the forecast published by Euroconstruct in December 2010,
construction will grow in Finland by some three per cent in 2011. The growth in
residential construction will continue, both in new construction and renovation
projects. Euroconstruct predicts an increase of 6.6 per cent in residential
construction. Commercial and office construction is expected to show an upturn
with a growth rate of 1.4 per cent. The market forecast for civil engineering
is -1.4 per cent. According to the forecast published by the Confederation of
Finnish Construction Industries RT in April 2011, construction will grow in
Finland by five per cent in 2011.
Cramo is the second largest player in the equipment rental market in Finland.
The number of depots at the end of the period under review was 55 (55). Cramo's
strategic target in Finland is to increase its market share, both in the
construction industry and in the industrial maintenance sector, and to restore
profitability to the pre-downturn level.
Sweden
Sweden (EUR 1,000) 1-3/11 1-3/10 Change % 1-12/10
--------------------------------------------------------
Sales 68,101 51,895 31.2 % 251,857
--------------------------------------------------------
EBITA 9,344 5,418 72.5 % 41,186
--------------------------------------------------------
EBITA-% 13.7 % 10.4 % 16.4 %
--------------------------------------------------------
No of employees (FTE) 664 654 1.5 % 665
--------------------------------------------------------
No of depots 119 116 2.6 % 119
--------------------------------------------------------
The demand for construction and equipment rental services in Sweden continued
to develop favourably. Growth continued to be particularly strong in the
Stockholm region and in southern Sweden. Demand is expected to remain strong
throughout the country.
The Swedish operations reported sales of EUR 68.1 (51.9) million for
January-March, for an increase of 31.2 per cent. Sales growth was due to a
strong increase in construction activity and the strengthening of the Swedish
krona. In local currencies, sales growth was 17.0 per cent.
Profitability continued to develop favourably. EBITA was EUR 9.3 (5.4) million,
or 13.7 (10.4) per cent of sales. Fleet utilisation rates were at a good level,
and Cramo decided to increase its fleet investments. Rental periods are
expected to return to the pre-downturn level.
The Swedish Construction Federation (Sveriges Byggindustrier) changed its
prediction for construction growth in 2011 from three to seven per cent in
February. Residential construction is predicted to grow by 12 per cent,
commercial and office construction by four per cent and civil engineering by
three per cent. The full-year forecast published by Euroconstruct in December
2010 for construction growth in Sweden is some four per cent.
Cramo is the clear market leader in the Swedish equipment rental business. At
the end of the period, Cramo had 119 (116) depots in Sweden. Cramo's strategic
targets in Sweden for 2010-2013 are efficiency and profitability improvement in
particular, as well as achieving the “best in town” position in all areas.
Norway
Norway (EUR 1,000) 1-3/11 1-3/10 Change % 1-12/10
--------------------------------------------------------
Sales 20,204 17,097 18.2 % 69,120
--------------------------------------------------------
EBITA 415 -103 503.8 % 303
--------------------------------------------------------
EBITA-% 2.1 % -0.6 % 0.4 %
--------------------------------------------------------
No of employees (FTE) 189 181 4.4 % 189
--------------------------------------------------------
No of depots 29 27 7.4 % 29
--------------------------------------------------------
The rate of recovery in the construction sector in Norway has been below the
industry's expectations; however, an upswing in construction activity is
expected in the second quarter.
The Norwegian operations reported sales of EUR 20.2 (17.1) million for
January-March, for an increase of 18.2 per cent. In the local currency, the
change in sales was 14.1 per cent. EBITA was EUR 0.4 (-0.1) million, or 2.1
(-0.6) per cent of sales. Measures aimed at improving the profitability of the
Norwegian operations were continued, for example, through strengthening the
organisation.
Sales and profitability improved due to the recovery in price levels, which
started in the second half of 2010, and new customer agreements, particularly
in the industrial sector. A significant customer during the period was the city
of Oslo, for which Cramo delivered a large quantity of modular spaces and
equipment for the Nordic World Ski Championships.
Euroconstruct predicts that construction activity will increase in Norway by
just over three per cent in 2011. According to the Euroconstruct forecast,
residential construction will grow by more than 11 per cent, and civil
engineering by some five per cent, while commercial and office construction
will still decrease.
Cramo estimates that in terms of market position, it is the second largest
service provider in the sector in Norway. At the end of the period under
review, Cramo had 29 (27) depots in Norway. Cramo's strategic targets in Norway
are to improve its profitability, be the “best in town” and achieve growth both
organically and through acquisitions.
Denmark
Denmark (EUR 1,000) 1-3/11 1-3/10 Change % 1-12/10
----------------------------------------------------------
Sales 6,257 5,740 9.0 % 29,493
----------------------------------------------------------
EBITA -1,634 -3,224 49.3 % -5,328
----------------------------------------------------------
EBITA-% -26.1 % -56.2 % -18.1 %
----------------------------------------------------------
No of employees (FTE) 119 118 0.8 % 120
----------------------------------------------------------
No of depots 17 17 0.0 % 17
----------------------------------------------------------
In Denmark, construction declined more than expected in 2010, and the
exceptionally cold winter months in the first quarter caused further delays in
construction starts. The industry's expectations for 2011 are cautiously
positive.
The unexpectedly slow rate of recovery in construction also affected Cramo's
sales and profit. The Danish operations reported sales of EUR 6.3 (5.7) million
for January-March, for an increase of 9.0 per cent. EBITA was EUR -1.6 (-3.2)
million.
Sales showed an upturn as expected, yet remained below targeted levels due to
the harsh winter. While the result improved on the previous year, it was still
negative. The favourable profit development was particularly attributable to
improved fleet utilisation rates. In Denmark, too, a balance has been achieved
between the demand for and the supply of rental equipment after the downturn,
which offers opportunities for improving the profitability of the business.
Profitability is expected to improve during the year.
In November 2010, Euroconstruct estimated that the Danish construction market
will show an upturn with a growth rate of some three per cent in 2011. However,
according to the local market forecast (Dansk Byggeri) published in February,
overall construction will show a further decline of one per cent in 2011,
compared with the previous year. In renovation projects, demand is good.
Cramo estimates that in terms of market position, it is the second largest
service provider in the sector in Denmark. At the end of the period under
review, Cramo had 17 (17) depots in Denmark.
Cramo's key objectives in Denmark are to increase profitability to a
satisfactory level and to achieve the “best in town” position in selected
areas. The Group will seek growth in the modular space business in particular.
The modular space sales increased as expected in the first quarter. In addition
to hospitals, there is increasing interest in the use of modular spaces as
school premises.
Central Europe
Central Europe (EUR 1,000) 1-3/11 1-3/10 Change % 1-12/10
--------------------------------------------------------------
Sales 10,612
--------------------------------------------------------------
EBITA -1,189
--------------------------------------------------------------
EBITA-% -11.2 %
--------------------------------------------------------------
No of employees (FTE) 275
--------------------------------------------------------------
No of depots 95
--------------------------------------------------------------
Cramo Group's equipment rental business sales in Central Europe come from the
German, Swiss, Austrian, and Hungarian markets. The business segment was formed
when Theisen Group, which was acquired in January 2011, was consolidated into
Cramo Group on 1 February 2011. Thus the first-quarter figures include Theisen
Group's financial information for the period 1 February to 31 March 2011.
The integration of Theisen Group progressed as planned in all areas. Mr Dirk
Schlitzkus, (47), Attorney, was appointed as Senior Vice President, Central
Europe and member of the Cramo Group management team as of 9 May 2011. As from
the same date Mr Dirk Schlitzkus becomes Managing Director of Theisen
Baumaschinen AG, a part of the Cramo Group. Mr Schlitzkus will report to Mr
Vesa Koivula, President and CEO of Cramo Group. Mr Dirk Schlitzkus joined
Theisen in 1994 as a consultant lawyer and has since 1998 held several
managerial positions.
In Central Europe, the market situation in equipment rental improved from the
previous year, and business volumes were at a higher level in all Central
European countries than in 2010. Since the focus of the rental fleet in Central
Europe is in construction machinery, the segment is more strongly affected by
seasonal fluctuations than Cramo's other business segments. In the winter
period in particular sales are lower than in the summer months. By the end of
the period, fleet utilisation rates had reached a good level.
The Central European operations reported sales of EUR 10.6 million for
February-March, EBITA was EUR -1.2 million, or -11.2 per cent of sales. The
sales and profit exceeded Cramo's expectations for the period. Planned fleet
investments were continued.
As regards the principles of revenue recognition concerning Theisen Group,
Cramo applies its practice according to which capital gains or losses from the
sale of used equipment are shown under other operating income or expenses. Thus
the sale of used equipment is not included in sales. In 2010, Theisen Group's
sales included some EUR 8.5 million from the sale of used equipment.
The preliminary purchase price allocation for the Theisen acquisition is
presented in the notes to the Interim Report. The preliminary purchase price,
subject to certain adjustments, was approximately EUR 47,3 million. According
to the purchase price allocation, Theisen Group's net interest-bearing
liabilities totalled some EUR 34.5 million.
According to the forecast published by Euroconstruct in December 2010,
construction is expected to grow in Germany, Switzerland and Austria by
approximately one per cent and in Hungary by some five per cent in 2011.
At the end of the period, the number of depots in Central Europe was 95.
Cramo's strategic target in Central Europe is to expand its product and service
offering in stages according to the Cramo Concept.
Eastern Europe
Eastern Europe (EUR 1,000) 1-3/11 1-3/10 Change % 1-12/10
---------------------------------------------------------------
Sales 12,869 9,014 42.8 % 49,886
---------------------------------------------------------------
EBITA -2,218 -4,839 54.2 % -11,464
---------------------------------------------------------------
EBITA-% -17.2 % -53.7 % -23.0 %
---------------------------------------------------------------
No of employees (FTE) 541 521 3.8 % 532
---------------------------------------------------------------
No of depots 66 66 0.0 % 65
---------------------------------------------------------------
Cramo Group's equipment rental business sales in Eastern Europe come from
Estonia, Latvia, Lithuania, Poland, the Czech Republic, Slovakia and Russia.
Until 31 December 2010, the name of the segment was Central and Eastern Europe
The growth in construction seen in the last quarter in 2010 continued in most
Eastern European markets. The strongest rates of growth are seen in Estonia and
Poland as well as the growth centres in Russia. During the period Cramo
established a new depot for the nuclear power plant construction site in the
Kaliningrad region in Russia. The plant is scheduled for completion in 2018.
The Eastern European operations reported sales of EUR 12.9 (9.0) million for
January-March, for an increase of 42.8 per cent. In local currencies, the
change in sales was 40.2 per cent. EBITA was EUR -2.2 (-4.8) million, or -17.2
(-53.7) per cent of sales.
Cramo's sales increased year-on-year in all markets, and the strong growth is
expected to continue throughout the year. Profitability also developed
favourably in all market areas, although a positive result was not yet
achieved. Sales growth and adjustments concluded in earlier years improved
profitability. The favourable profitability development is expected to continue
during the year.
According to the forecast published by Euroconstruct in December 2010,
construction is expected to grow in all markets except the Czech Republic in
2011. In Russia, construction is expected to show an upturn with a growth rate
of five per cent. In the Baltic countries, residential construction is expected
to drive growth in construction, with growth rates estimated at some 10 per
cent in Estonia, four per cent in Latvia and five per cent in Lithuania. In
Poland, civil engineering is expected to drive construction growth, which is
predicted at 13 per cent. In Russia, the construction market is expected to
show an upturn with a growth rate of some six per cent. In the Czech Republic,
the forecasted decrease in construction activity is estimated at some three per
cent.
Cramo's strategic target in Eastern Europe is to grow profitably faster than
the market and to be the best rental service provider on the local level in
each market. Cramo also intends to decrease its dependence on the construction
industry.
At the end of the period, the number of depots in Eastern Europe was 66 (66).
SHARES AND SHARE CAPITAL
On 31 March 2011, Cramo Plc's share capital as registered in the trade register
was EUR 24,834,753.09 and the number of shares was 31,949,209, including Cramo
Management Oy's indirect holding of 316,288 shares. During the period, the
number of shares increased by 1,289,020 new shares.
The number of shares increased by 142,191 new shares when shares subscribed for
under the stock option rights 2006A in December 2010 were registered in the
trade register on 13 January 2011, and trading in them began on 14 January
2011. The share subscription price of EUR 1,871,233.56 was credited in its
entirety to the reserve for invested unrestricted equity.
The number of shares increased by 551,809 new shares when shares subscribed for
under the stock option rights 2006A in January 2011 were registered in the
trade register on 10 February 2011. The share subscription price of EUR
7,261,806.44 was credited in its entirety to the reserve for invested
unrestricted equity. The subscription period for stock options 2006A ended on
31 January 2011, and a total of 694,000 shares were subscribed for with them.
The number of shares increased by 374,532 new shares when the shares issued to
Arrex Beteiligungs-GmbH, a shareholder of Theisen Baumaschinen AG, in a
directed share issue were entered in the trade register on 18 February 2011.
These shares are subject to a lock-up clause according to which 50 per cent of
the shares issued may not be transferred during a period of one year from the
closing of the transaction (31 January 2011), and the remaining 50 per cent of
the shares during a period of two years from the closing of the transaction.
The number of shares increased by 220,488 new shares due to a share swap on 28
February 2011. On 15 February 2011, Cramo announced it was to acquire all of
the shares in Cramo Management Oy through a share swap. Cramo Management Oy is
a company established by the Cramo Executive Committee in June 2009, which
acquired 316,288 Cramo Plc shares from the market. The acquisition was financed
by capital investments by the Executive Committee members and a loan in the
amount of EUR 2 million provided by Cramo Plc. According to the agreements
governing Cramo Management Oy, it had an obligation to prematurely repay the
loan granted by Cramo Plc in case the share price of Cramo Plc other than
temporarily exceeded a certain price determined in the agreements. This
condition was met on 14 February 2011. The Board of Directors of Cramo Plc
decided that the loan would be repaid through a share swap whereby Cramo Plc
acquired all the shares in Cramo Management Oy. To implement the share swap,
Cramo offered to the shareholders of Cramo Management Oy a total of 220,488 new
Cramo Plc shares, in derogation from the shareholders' pre-emptive subscription
rights. In this arrangement, all the shares in Cramo Management Oy, as well as
the 316,288 Cramo Plc's own shares and the loan receivable from Cramo
Management Oy were transferred to Cramo Plc. The intention is to later merge
Cramo Management Oy with Cramo Plc through a subsidiary merger. After the share
swap, the Cramo Executive Committee members' previously indirect share
ownership became a direct ownership in Cramo Plc.
After the period, the number of shares increased by 9,489,877 new shares due to
a rights issue. Based on the authorisation given by the Annual General Meeting
on 24 March 2011, the Board of Directors of Cramo Plc decided to offer up to
9,489,877 new shares for subscription with pre-emptive rights to existing
shareholders.
Current option programmes and incentive schemes
On 31 March 2011, Cramo Group's key personnel held a total of 737,000 stock
options 2006B, 880,500 stock options 2006C, 891,000 stock options 2009 and
998,000 stock options 2010.
Stock options 2006B, 2006C, 2009 and 2010 did not entitle their holders to
participate in the rights offering decided on by the Board of Directors on 24
March 2011. Therefore, the subscription price and subscription ratio of the
stock options was amended in accordance with the terms and conditions of stock
options so that the share-specific subscription price is as follows: for stock
options 2006B, EUR 22.05; stock options 2006C, EUR 6.47; stock options 2009,
EUR 10.85; and stock options 2010, EUR 13.72. The subscription ratio will be
amended so that each stock option entitles the holder to subscribe for 1.3 new
Cramo Plc shares.
The Annual General Meeting held on 24 March 2011 decided that a maximum of
1,000,000 stock options be issued to the key personnel. The stock options will
be issued gratuitously, and they will entitle their owners to subscribe for a
maximum of 1,000,000 new shares in the company or existing shares held by the
company in total. The share subscription price will be based on the prevailing
market price of the Cramo Plc share on the NASDAQ OMX Helsinki Ltd in October
2011. The share subscription period for stock options will be 1 October 2014 to
31 December 2015.
CHANGES IN SHAREHOLDINGS
Based on the underwriting agreement signed on 24 March 2011 relating to the
offering of Cramo Plc and the flagging notifications received by the company,
Cramo Plc announced on 25 March 2011 it had received notifications of changes
in ownership interest from Pohjola Bank plc and the business unit of
Handelsbanken Capital Markets, Svenska Handelsbanken AB (publ). If Pohjola Bank
plc's underwriting for the offering is fully realised, the number of votes and
shares to be subscribed for by Pohjola Bank plc will amount to a maximum of
3,007,936, corresponding to 7.26% of Cramo Plc shares and votes after the
offering, provided that all shares to be offered in the offering will be fully
subscribed for. If the underwriting given by Handelsbanken Capital Markets,
Svenska Handelsbanken AB (publ), for the offering is fully realised, the number
of votes and shares to be subscribed for by Handelsbanken Capital Markets,
Svenska Handelsbanken AB (publ) will amount to a maximum of 3,027,736,
corresponding to 7.31% of Cramo Plc shares and votes after the offering,
provided that all shares to be offered in the offering will be fully subscribed
for.
ANNUAL GENERAL MEETING AND VALID BOARD AUTHORISATIONS
Cramo Plc's Annual General Meeting was held in Helsinki on Thursday 24 March
2011. The Annual General Meeting adopted the consolidated financial statements
and the parent company's financial statements for 2010 and discharged the
members of the Board of Directors and the President and CEO from liability. The
Annual General Meeting decided, as proposed by the Board of Directors, that a
dividend of EUR 0.10 per share be paid from the distributable funds.
The number of members of the Board of Directors was confirmed as seven. Mr Stig
Gustavson, Mr Eino Halonen, Mr Jari Lainio, Mr Esko Mäkelä and Mr Victor
Hartwall were re-elected as members of the Board of Directors, and Mr J.T.
Bergqvist and Ms Helene Biström were elected as new Board members.
The Annual General meeting confirmed the remuneration payable to the chairman
of the Board of Directors as EUR 70,000, to the deputy chairman as EUR 45,000
and to the other members of the Board as EUR 35,000 per annum. Forty per cent
of the annual remuneration shall be paid in Cramo Plc shares purchased on the
market on behalf of the Board members. In case such a purchase of shares cannot
be carried out, the annual remuneration shall be paid entirely in cash. In
addition, it was decided to pay all Board members an attendance fee of EUR
1,000 for attendance at each Board committee meeting and to refund reasonable
travel expenses against invoice.
The auditor shall be paid reasonable remuneration in accordance with the
auditor's invoice. Ernst & Young Oy, a firm of authorised public accountants,
was appointed as Cramo Plc's auditor, with Mr Erkka Talvinko as the responsible
auditor.
The Annual General Meeting authorised the Board of Directors to decide on the
repurchase of the company's own shares and/or their acceptance as pledge. The
number of own shares to be acquired and/or accepted as pledge shall not exceed
3,000,000. Own shares may only be acquired using the company's unrestricted
equity and at a price formed in public trading on the date of the repurchase or
otherwise formed on the market. The Board of Directors decides on how own
shares will be acquired and/or accepted as pledge. In addition to other means,
derivatives may be used to acquire own shares. Own shares can be acquired
otherwise than in proportion to the shareholdings of the shareholders (directed
repurchase). Own shares can be acquired, among other things, to limit the
dilutive effects of share issues carried out in connection with possible
acquisitions, to develop the company's capital structure, to be transferred in
connection with possible acquisitions or to be cancelled, provided that the
acquisition is in the interests of the company and its shareholders. The
authorisation is effective until the close of the next Annual General Meeting
of Shareholders, or no later than 24 September 2012.
The Annual General Meeting authorised the Board of Directors to decide on a
share issue which includes the right to decide on the transfer of the company's
own shares, as well as on the granting of option rights and other special
rights entitling to shares as referred to Chapter 10 of the Finnish Limited
Liability Companies Act, as follows: The shares issued will be new shares in
the company or shares owned by the company. The maximum number of shares is
12,000,000, which corresponds to some 40 per cent of all shares in the company.
Shares or special rights entitling to shares may be issued in one or more
tranches. The Board of Directors may also decide on issuing new shares to the
company itself. The Board of Directors was authorised to decide on all terms
for the share issue and the granting of special rights entitling to shares. The
share issue and granting of special rights may be carried out in deviation from
the shareholders' pre-emptive right, provided that there is a weighty financial
reason for the company to do so. The authorisation invalidates prior
authorisations regarding share issues and the granting of option rights and
other special rights entitling to shares. It is valid for five years from the
decision of the Annual General Meeting.
The Annual General Meeting decided that stock options be issued to the key
personnel of Cramo Group. The company has a weighty financial reason for the
issue of stock options, since the stock options are intended to form part of
the incentive and commitment program for the key personnel. The maximum total
number of stock options issued will be 1,000,000 and they will be issued
gratuitously. The stock options entitle their owners to subscribe for a maximum
total of 1,000,000 new shares in the company or existing shares held by the
company. The share subscription price for stock options will be based on the
prevailing market price of the Cramo Plc share on the NASDAQ OMX Helsinki Ltd
in October 2011. The subscription price will be credited in its entirety to the
reserve for invested unrestricted equity. The share subscription period for
stock options will be 1 October 2014 to 31 December 2015.
A share ownership program, in which the key personnel are obligated to acquire
Cramo shares with a portion of the income gained from the stock options, in a
manner decided on by the Board of Directors in connection with the decision to
distribute stock options, will be incorporated to the stock options 2011. The
Board of Directors will decide on the distribution of stock options in the
fourth quarter of 2011.
ESSENTIAL RISKS AND UNCERTAINTIES
In addition to global economic developments, the main sources of uncertainty in
Cramo's business are related to the economic cycles and financial development
of each country, fluctuations in interest and exchange rates, availability of
financing, credit loss risks, the success of the Group's acquisitions,
personnel-related risks, availability of competent management and
recruitment-related risks, tax risks and other business risks.
The risks involved with business increased during the economic downturn. In
particular, the risks associated with the reorganisation of the Group's
operations, fleet management related risks, the availability and price of
financing, risks related to financial covenants of loan terms, exchange rate
risks, risks related to the implementation of the Group's ERP system, risks
related to franchising arrangements, risks related to rental prices in
different markets as well as credit loss risks increased during the downturn.
In addition, the downturn increased the impairment risks to the balance sheet
values resulting from acquisitions. Greater attention has been paid to the
Group's risk management in the changed operating environment.
SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE
After the period, the number of shares increased by 9,489,877 new shares to
41,439,086 shares due to a rights issue. Based on the authorisation given by
the Annual General Meeting on 24 March 2011, the Board of Directors of Cramo
Plc decided to offer up to 9,489,877 new shares for subscription with
pre-emptive rights to existing shareholders. The gross proceeds after expenses
raised in the rights issue totalled approximately EUR 97.2 million, which Cramo
intends to use to further support the company's growth strategy and to
strengthen its balance sheet.
The subscription price in the offering was EUR 10.50 per share, and the
subscription right was three new shares for every ten shares held on 29 March
2011. The share subscription period was 1 April -15 April 2011.
On 18 April 2011, Cramo announced that the right issue was oversubscribed.
Preliminarily, a total of approximately 16.6 million shares had been subscribed
for in the rights offering representing a total subscription level of about
175%. Of the total shares offered, approximately 97.2% had been subscribed for
with subscription rights and the remainder for without subscription rights.
On 21 April 2011, Cramo announced the final outcome of the rights issue. As the
offered shares were subscribed for in full in the rights issue, the
underwriting commitments were not utilised.
On 26 April 2011, Cramo Plc received a notification from both Pohjola Bank plc
and the business unit of Handelsbanken Capital Markets, Svenka Handelsbanken AB
(publ.) in accordance with Chapter 2 Paragraph 10 of the Securities Markets Act
according to which no shares had been subscribed for by Pohjola Bank plc or the
business unit of Handelsbanken Capital Markets, Svenska Handelsbanken AB
(publ). in the rights issue based on the underwriting agreement described in
the flagging notice published on 25 March 2011. Therefore, the possible holding
announced in the flagging notice published on 25 March 2011 had also not been
realised.
On 27 April 2011, Cramo Plc received a notification in accordance with Chapter
2 Paragraph 9 of the Securities Markets Act according to which the following
companies' and private persons' combined share of Cramo Plc's shares and votes
had on 26 April 2011 fallen below one fourth (1/4): Hartwall Capital Oy
(6,491,702 shares, i.e. 15.67% of shares and votes), K.Hartwall Invest Oy
(2,732,000 shares, i.e. 6.59% of shares and votes) and Kusinkapital Ab, Gustav
Tallqvist, Pinewood Invest OÜ, Christel Hartwall, Pallas Capital Oy,
Fyrklöver-Invest Oy Ab, Antonia Hartwall, Emma Hartwall, Axel Hartwall, Gulle
Therman, Josefina Tallqvist, Victor Hartwall, Peter Therman and Mats Therman.
The combined holding of each party listed above was at the time of the
announcement 10,001,681 shares or 24.14 per cent of Cramo Plc's shares and
votes.
On 9 May 2011, Cramo announced that Mr Dirk Schlitzkus (47), Attorney, has been
appointed as Senior Vice President, Central Europe and member of the Cramo
Group management team as of 9 May 2011. As from the same date Mr Dirk
Schlitzkus becomes Managing Director of Theisen Baumaschinen AG, a part of the
Cramo Group. Mr Schlitzkus will report to Mr Vesa Koivula, President and CEO of
Cramo Group. Mr Dirk Schlitzkus joined Theisen in 1994 as a consultant lawyer
and has since 1998 held several managerial positions.
ACCOUNTING PRINCIPLES
This Interim Report has been prepared in accordance with IAS 34: Interim
Financial Reporting. In the preparation of this Interim Report, Cramo has
applied the same accounting principles as in its financial statements for 2010,
except for the revised IFRS standard IAS 24 (Related Party Disclosures), which
the company adopted on 1 January 2011, as well as other changes in other
standards attributable to this change.
The above-mentioned changes in standards have not had a significant impact on
the reported balance sheet, income statement and notes to the Interim Report.
CONSOLIDATED BALANCE SHEET (EUR 1,000) 31 Mar 2011 31 Mar 2010 31 Dec 2010
--------------------------------------------------------------------------------
ASSETS
--------------------------------------------------------------------------------
Non-current assets
--------------------------------------------------------------------
Tangible assets 560,423 510,260 526,326
--------------------------------------------------------------------------------
Goodwill 159,411 142,046 147,998
--------------------------------------------------------------------------------
Other intangible assets 121,323 89,621 102,001
--------------------------------------------------------------------------------
Deferred tax assets 15,607 14,001 14,301
--------------------------------------------------------------------------------
Available-for-sale financial investments 349 342 347
--------------------------------------------------------------------------------
Derivative financial instruments 2,554 1,053
--------------------------------------------------------------------------------
Trade and other receivables 3,789 3,003 3,613
--------------------------------------------------------------------------------
Total non-current assets 863,455 759,274 795,638
--------------------------------------------------------------------------------
Current assets
--------------------------------------------------------------------------------
Inventories 17,698 12,235 13,803
--------------------------------------------------------------------------------
Trade and other receivables 147,633 100,839 125,333
--------------------------------------------------------------------------------
Income tax receivables 6,909 11,037 5,114
--------------------------------------------------------------------------------
Derivative financial instruments 304 115 825
--------------------------------------------------------------------------------
Cash and cash equivalents 16,753 13,417 22,313
--------------------------------------------------------------------------------
Total current assets 189,296 137,642 167,388
--------------------------------------------------------------------------------
Assets available for sale 7,075 5,863 2,671
--------------------------------------------------------------------------------
TOTAL ASSETS 1,059,826 902,780 965,697
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
EQUITY AND LIABILITIES
--------------------------------------------------------------------
Equity
--------------------------------------------------------------------
Share capital 24,835 24,835 24,835
--------------------------------------------------------------------------------
Other reserves 203,325 186,926 188,797
--------------------------------------------------------------------------------
Fair value reserve 117 117 117
--------------------------------------------------------------------------------
Hedging fund 338 -2,853 -1,197
--------------------------------------------------------------------------------
Translation differences 2,639 -5,393 3,426
--------------------------------------------------------------------------------
Retained earnings 91,600 92,402 103,309
--------------------------------------------------------------------------------
Equity attributable to shareholders 322,853 296,034 319,287
of the parent company
--------------------------------------------------------------------------------
Non-controlling interest 503 503
--------------------------------------------------------------------------------
Hybrid capital 49,630 49,630 49,630
--------------------------------------------------------------------------------
Total equity 372,483 346,167 369,420
--------------------------------------------------------------------------------
Non-current liabilities
--------------------------------------------------------------------------------
Interest-bearing liabilities 378,467 348,332 346,776
--------------------------------------------------------------------------------
Derivative financial instruments 308 5,137 2,543
--------------------------------------------------------------------------------
Deferred tax liabilities 84,609 75,059 78,348
--------------------------------------------------------------------------------
Other non-current liabilities 5,455 1,565 4,207
--------------------------------------------------------------------------------
Total non-current liabilities 468,839 430,093 431,875
--------------------------------------------------------------------------------
Current liabilities
--------------------------------------------------------------------------------
Interest-bearing liabilities 100,858 40,276 57,569
--------------------------------------------------------------------------------
Derivative financial instruments 662 1,447 1,853
--------------------------------------------------------------------------------
Trade and other payables 113,962 79,931 100,984
--------------------------------------------------------------------------------
Income tax liabilities 3,021 4,866 3,997
--------------------------------------------------------------------------------
Total current liabilities 218,504 126,520 164,403
--------------------------------------------------------------------------------
Total liabilities 687,343 556,613 596,277
--------------------------------------------------------------------------------
TOTAL EQUITY AND LIABILITIES 1,059,826 902,780 965,697
--------------------------------------------------------------------------------
CONSOLIDATED INCOME STATEMENT (EUR 1,000) 1-3/11 1-3/10 1-12/10
--------------------------------------------------------------------------------
Sales 144,217 101,400 492,103
--------------------------------------------------------------------------------
Other operating income 1,294 7,615 15,110
--------------------------------------------------------------------------------
Change in inventories of finished goods and work 579 273 1,015
in progress
--------------------------------------------------------------------------------
Production for own use 796 4,694
--------------------------------------------------------------------------------
Materials and services -54,276 -36,782 -183,479
--------------------------------------------------------------------------------
Employee benefit expense -30,584 -23,785 -101,939
--------------------------------------------------------------------------------
Other operating expenses -36,682 -26,134 -109,880
--------------------------------------------------------------------------------
Depreciation and impairment on tangible assets -22,890 -21,085 -83,145
and assets available for sale
--------------------------------------------------------------------------------
EBITA 2,455 1,503 34,478
--------------------------------------------------------------------------------
% of sales 1.7 % 1.5 % 7.0 %
--------------------------------------------------------------------------------
Amortisation and impairment on intangible assets -2,692 -1,616 -7,089
resulting from acquisitions
--------------------------------------------------------------------------------
Operating profit / loss (EBIT) -237 -114 27,389
--------------------------------------------------------------------------------
% of sales -0.2 % -0.1 % 5.6 %
--------------------------------------------------------------------------------
Finance costs (net) -3,724 -6,461 -22,586
--------------------------------------------------------------------------------
Profit / loss before taxes -3,962 -6,574 4,804
--------------------------------------------------------------------------------
% of sales -2.7 % -6.5 % 1.0 %
--------------------------------------------------------------------------------
Income taxes -2,001 -826 -7,007
--------------------------------------------------------------------------------
Profit / loss for the period -5,963 -7,400 -2,203
--------------------------------------------------------------------------------
% of sales -4.1 % -7.3 % -0.4 %
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Attributable to:
-----------------------------------------------------------------------
Equity holder of parent -5,963 -7,383 -2,142
--------------------------------------------------------------------------------
Non-controlling interest -16 -61
--------------------------------------------------------------------------------
-----------------------------------------------------------------------
Profit / loss attributable to equity holders' of
parent
-----------------------------------------------------------------------
Earnings per share, undiluted, EUR -0.19 -0.24 -0.07
--------------------------------------------------------------------------------
Earnings per share, diluted, EUR -0.19 -0.24 -0.07
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMPREHENSIVE INCOME STATEMENT (EUR 1,000) 1-3/11 1-3/10 1-12/10
--------------------------------------------------------------------------------
Profit / loss for the period -5,963 -7,400 -2,203
--------------------------------------------------------------------------------
Other comprenhesive income
--------------------------------------------------------------------------------
-Change in hedging fund, net of tax 1,535 -557 1,099
--------------------------------------------------------------------------------
-Change in exchange rate differences, net of tax 1,006 15,304 33,956
--------------------------------------------------------------------------------
Total other comprehensive income 2,541 14,747 35,055
--------------------------------------------------------------------------------
Comprehensive income for the period -3,422 7,347 32,852
--------------------------------------------------------------------------------
CHANGES Share Share Fair Retained Attribut Non-co Hybrid Total
IN capita issue value earnings, able to ntroll capita equity
CONSOLID l and reserv translati equity ing l
ATED other e on holders intere
STATEMEN reserve differenc of the st
T OF s es, parent
EQUITY hedging company
(EUR fund
1,000)
--------------------------------------------------------------------------------
At 1 Jan 24,835 186,910 117 76,390 288,252 503 49,630 338,385
2010
--------------------------------------------------------------------------------
Total 7,347 7,347 7,347
comprehensive
income
--------------------------------------------------------------------------------
Share-bas 435 435 435
ed
payments
--------------------------------------------------------------------------------
Changes 16 -16
within
equity
--------------------------------------------------------------------------------
At 31 Mar 24,835 186,926 117 84,156 296,034 503 49,630 346,167
2010
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
At 1 Jan 24,835 188,797 117 105,538 319,287 503 49,630 369,420
2011
--------------------------------------------------------------------------------
Total -3,422 -3,422 -3,422
comprehensive
income
--------------------------------------------------------------------------------
Dividend -3,163 -3,163 -3,163
distribu
tion
--------------------------------------------------------------------------------
Exercise 7,262 7,262 7,262
of share
options
--------------------------------------------------------------------------------
Issue of shares 7,266 7,266 7,266
related to
business
combination
--------------------------------------------------------------------------------
Share-bas 721 721 721
ed
payments
--------------------------------------------------------------------------------
Non-contr 427 427 -503 -76
olling
interest
--------------------------------------------------------------------------------
Hybrid -5,523 -5,523 -5,523
capital
--------------------------------------------------------------------------------
At 31 Mar 24,835 203,325 117 94,577 322,853 49,630 372,483
2011
--------------------------------------------------------------------------------
CONSOLIDATED CASH FLOW STATEMENT (EUR 1,000) 1-3/11 1-3/10 1-12/10
-----------------------------------------------------------------------
Net cash flow from operating activities 3,640 510 68,333
-----------------------------------------------------------------------
Net cash flow from investing activities -48,866 18,263 -40,940
-----------------------------------------------------------------------
Cash flow from financing activities
-----------------------------------------------------------------------
Change in interest-bearing receivables 44 34 -610
-----------------------------------------------------------------------
Change in finance lease liabilities -10,765 -9,623 -35,309
-----------------------------------------------------------------------
Change in interest-bearing liabilities 43,145 -14,701 15,952
-----------------------------------------------------------------------
Hybrid capital -6,000
-----------------------------------------------------------------------
Proceeds from share options exercised 7,262 1,871
-----------------------------------------------------------------------
Non-controlling interest -76
-----------------------------------------------------------------------
Net cash flow from financing activities 39,610 -24,290 -24,095
-----------------------------------------------------------------------
-----------------------------------------------------------------------
Change in cash and cash equivalents -5,616 -5,517 3,298
-----------------------------------------------------------------------
Cash and cash equivalents at period start 22,313 18,520 18,520
-----------------------------------------------------------------------
Translation differences 56 414 495
-----------------------------------------------------------------------
Cash and cash equivalents at period end 16,753 13,417 22,313
-----------------------------------------------------------------------
COMMITMENTS AND CONTINGENT LIABILITIES 31 Mar 2011 31 Mar 2010 31 Dec 2010
-----------------------------------------------------------------------------
----------------------------------------------------
On own behalf
-----------------------------------------------------------------------------
Mortgages on company assets 83,317
-----------------------------------------------------------------------------
Pledges 169,424
-----------------------------------------------------------------------------
Pledges, finance lease 167,625 154,215 154,091
-----------------------------------------------------------------------------
Interest on hybrid capital 0 5,523 4,044
-----------------------------------------------------------------------------
Investment commitments 46,077 2,707 1,226
-----------------------------------------------------------------------------
Commitments to office and depot rents 113,361 79,167 98,271
-----------------------------------------------------------------------------
Operational lease payments 58,303 38,191 37,602
-----------------------------------------------------------------------------
Other commitments 648 244 580
-----------------------------------------------------------------------------
DERIVATIVE FINANCIAL INSTRUMENTS 31 Mar 2011 31 Mar 2010 31 Dec 2010
(EUR 1,000)
-----------------------------------------------------------------------
Fair value
-----------------------------------------------------------------------
Interest rate swaps 2,246 -5,286 -1,490
-----------------------------------------------------------------------
Currency forwards -358 -1,183 -1,028
-----------------------------------------------------------------------
-----------------------------------------------------------------------
Nominal value
-----------------------------------------------------------------------
Interest rate swaps 181,453 147,008 181,331
-----------------------------------------------------------------------
Currency forwards 116,287 118,122 177,380
-----------------------------------------------------------------------
MODULAR SPACE ORDER BOOK (EUR 1,000) 31 Mar 2011 31 Mar 2010 31 Dec 2010
--------------------------------------------------------------------------------
Value of outstanding orders for modular 87,581 86,124 87,685
space
--------------------------------------------------------------------------------
Value of orders for modular space rental 82,525 78,791 83,261
--------------------------------------------------------------------------------
Value of orders for sale of modular space 5,056 7,333 4,424
--------------------------------------------------------------------------------
SHARE RELATED KEY FIGURES 1-3/11 1-3/10 1-12/10
--------------------------------------------------------------------------------
Earnings per share (EPS), EUR 1) -0.19 -0.24 -0.07
--------------------------------------------------------------------------------
Earnings per share (EPS), diluted, EUR 2) -0.19 -0.24 -0.07
--------------------------------------------------------------------------------
Shareholders' equity per share, EUR 3) 10.21 9.76 10.52
--------------------------------------------------------------------------------
Number of shares, end of period 31,949,209 30,660,189 30,660,189
--------------------------------------------------------------------------------
Number of shares, issue-adjusted, average 4) 31,012,549 30,343,901 30,343,901
--------------------------------------------------------------------------------
Number of shares, issue-adjusted, end of 31,632,921 30,343,901 30,343,901
period 4)
--------------------------------------------------------------------------------
Number of shares, diluted by share options, 32,190,734 31,194,512 31,750,741
average
--------------------------------------------------------------------------------
1. Calculated from issue-adjusted average number of shares
2. Calculated from diluted average number of shares
3. Calculated from issue-adjusted number of shares at the end of the period
4. Number of shares deducted by shares held by Cramo Management Oy
The preliminary purchase price allocation of Theisen Group is presented in the
following table. The purchase agreement of Theisen Group sets forth a process
by which the balance sheet and net assets of Theisen Group will be verified.
The process is still under way. Any possible corrections found in the
verification process may only cause the purchase price to be adjusted
downwards.
Theisen - preliminary purchase price allocation (EUR 1,000)
--------------------------------------------------------------------
--------
Purchase price 47 266
--------------------------------------------------------------------
Fair value of the net assets acquired 36 046
--------------------------------------------------------------------
Goodwill 11 220
--------------------------------------------------------------------
--------------------------------------------------------------------
Cash payment 40 000
--------------------------------------------------------------------
Fair value of share issue at closing 7 266
--------------------------------------------------------------------
Fair value of purchase price at closing 47 266
--------------------------------------------------------------------
Fair value at acquisition date (EUR 1,000)
--------------------------------------------------------------------
Non-current assets
--------------------------------------------------------------------
Brand 4 988
--------------------------------------------------------------------
Depot network 15 839
--------------------------------------------------------------------
Non-competition agreement 591
--------------------------------------------------------------------
Goodwill 11 220
--------------------------------------------------------------------
Software 385
--------------------------------------------------------------------
Tangible assets 39 621
--------------------------------------------------------------------
Deferred tax assets 1 823
--------------------------------------------------------------------
Total non-current assets 74 466
--------------------------------------------------------------------
Current assets
--------------------------------------------------------------------
Inventories 2 158
--------------------------------------------------------------------
Trade and other receivables 16 574
--------------------------------------------------------------------
Cash and cash equivalents 7 010
--------------------------------------------------------------------
Fleet helf for sale 4 389
--------------------------------------------------------------------
Total current assets 30 131
--------------------------------------------------------------------
TOTAL ASSETS 104 596
--------------------------------------------------------------------
--------------------------------------------------------------------
Liabilities
--------------------------------------------------------------------
Interest-bearing liabilities 41 480
--------------------------------------------------------------------
Deferred tax liabilities 6 460
--------------------------------------------------------------------
Other liabilities 1 570
--------------------------------------------------------------------
Trade and other liabilities 7 821
--------------------------------------------------------------------
TOTAL LIABILITIES 57 330
--------------------------------------------------------------------
--------------------------------------------------------------------
NET ASSETS 47 266
--------------------------------------------------------------------
INFORMATION PRESENTED BY BUSINESS SEGMENT
The Group's segments are divided geographically and consist of Finland, Sweden,
Norway, Denmark, Central Europe and Eastern Europe.
Sales (EUR 1,000) 1-3/11 1-3/10 1-12/10
----------------------------------------------
Finland 28,191 19,056 99,583
----------------------------------------------
Sweden 68,101 51,895 251,857
----------------------------------------------
Norway 20,204 17,097 69,120
----------------------------------------------
Denmark 6,257 5,740 29,493
----------------------------------------------
Central Europe 10,612
----------------------------------------------
Eastern Europe 12,869 9,014 49,886
----------------------------------------------
Inter-segment sales -2,017 -1,403 -7,837
----------------------------------------------
Group sales 144,217 101,400 492,103
----------------------------------------------
EBITA (EUR 1,000) 1-3/11 1-3/10 1-12/10
-----------------------------------------------------------------------
Finland 2,176 550 12,466
-----------------------------------------------------------------------
% of sales 7.7 % 2.9 % 12.5 %
-----------------------------------------------------------------------
Sweden 9,344 5,418 41,186
-----------------------------------------------------------------------
% of sales 13.7 % 10.4 % 16.4 %
-----------------------------------------------------------------------
Norway 415 -103 303
-----------------------------------------------------------------------
% of sales 2.1 % -0.6 % 0.4 %
-----------------------------------------------------------------------
Denmark -1,634 -3,224 -5,328
-----------------------------------------------------------------------
% of sales -26.1 % -56.2 % -18.1 %
-----------------------------------------------------------------------
Central Europe -1,189
-----------------------------------------------------------------------
% of sales -11.2 %
-----------------------------------------------------------------------
Eastern Europe -2,218 -4,839 -11,464
-----------------------------------------------------------------------
% of sales -17.2 % -53.7 % -23.0 %
-----------------------------------------------------------------------
Non-allocated capital gains and other income 5,746 5,746
-----------------------------------------------------------------------
Non-allocated Group activities -4,485 -2,073 -8,380
-----------------------------------------------------------------------
Eliminations 45 27 -52
-----------------------------------------------------------------------
Group EBITA 2,455 1,503 34,478
-----------------------------------------------------------------------
% of sales 1.7 % 1.5 % 7.0 %
-----------------------------------------------------------------------
Depreciation (EUR 1,000) 1-3/11 1-3/10 1-12/10
---------------------------------------------------------------
Finland -4,198 -3,734 -14,566
---------------------------------------------------------------
Sweden -8,930 -7,687 -31,916
---------------------------------------------------------------
Norway -2,385 -2,460 -9,613
---------------------------------------------------------------
Denmark -1,227 -1,801 -5,692
---------------------------------------------------------------
Central Europe -1,402
---------------------------------------------------------------
Eastern Europe -4,796 -5,388 -21,399
---------------------------------------------------------------
Non-allocated items and eliminations 47 -15 41
---------------------------------------------------------------
Total -22,890 -21,085 -83,145
---------------------------------------------------------------
Reconciliation of Group EBITA to earnings before taxes 1-3/11 1-3/10 1-12/10
(EUR 1,000)
--------------------------------------------------------------------------------
Group EBITA 2,455 1,503 34,478
--------------------------------------------------------------------------------
Amortisation and impairment on intangible assets -2,692 -1,616 -7,088
resulting from acquisitions
--------------------------------------------------------------------------------
Net finance items -3,724 -6,461 -22,586
--------------------------------------------------------------------------------
Earnings before taxes -3,962 -6,574 4,804
--------------------------------------------------------------------------------
Capital expenditure (EUR 1,000) 1-3/11 1-3/10 1-12/10
-------------------------------------------------------------
Finland 2,490 318 34,854
-------------------------------------------------------------
Sweden 9,020 1,682 35,133
-------------------------------------------------------------
Norway 1,265 804 8,453
-------------------------------------------------------------
Denmark 545 11 690
-------------------------------------------------------------
Central Europe 74,673
-------------------------------------------------------------
Eastern Europe 2,935 180 5,143
-------------------------------------------------------------
Non-allocated items and eliminations 343 477 1,946
-------------------------------------------------------------
Total 91,272 3,472 86,219
-------------------------------------------------------------
Assets (EUR 1,000) 31 Mar 2011 31 Mar 2010 31 Dec 2010
---------------------------------------------------------------------------
Finland 167,184 135,158 164,906
---------------------------------------------------------------------------
Sweden 451,611 412,383 449,591
---------------------------------------------------------------------------
Norway 99,280 96,621 98,415
---------------------------------------------------------------------------
Denmark 46,773 51,430 49,150
---------------------------------------------------------------------------
Central Europe 106,634
---------------------------------------------------------------------------
Eastern Europe 141,358 160,568 146,903
---------------------------------------------------------------------------
Non-allocated items and eliminations 46,987 46,618 56,732
---------------------------------------------------------------------------
Total 1,059,826 902,780 965,697
---------------------------------------------------------------------------
QUARTERLY SEGMENT INFORMATION
Sales by segment 1-3/11 10-12/1 7-9/10 4-6/10 1-3/10 10-12/0 7-9/09
(EUR 1,000) 0 9
--------------------------------------------------------------------------------
Finland 28,191 30,403 27,430 22,694 19,056 22,381 23,834
--------------------------------------------------------------------------------
Sweden 68,101 74,521 64,839 60,602 51,895 57,373 55,296
--------------------------------------------------------------------------------
Norway 20,204 19,667 17,023 15,332 17,097 16,319 15,615
--------------------------------------------------------------------------------
Denmark 6,257 8,630 8,395 6,728 5,740 9,275 9,747
--------------------------------------------------------------------------------
Central Europe 10,612
--------------------------------------------------------------------------------
Eastern Europe 12,869 15,812 14,361 10,698 9,014 11,332 11,979
--------------------------------------------------------------------------------
Inter-segment -2,017 -2,649 -1,693 -2,092 -1,403 -1,278 -1,382
sales
--------------------------------------------------------------------------------
Group sales 144,217 146,384 130,356 113,964 101,400 115,402 115,089
--------------------------------------------------------------------------------
EBITA by segment 1-3/11 10-12/1 7-9/10 4-6/10 1-3/10 10-12/0 7-9/09
(EUR 1,000) 0 9
--------------------------------------------------------------------------------
Finland 2,176 3,265 6,105 2,546 550 3,652 4,291
--------------------------------------------------------------------------------
% of sales 7.7 % 10.7 % 22.3 % 11.2 % 2.9 % 16.3 % 18.0 %
--------------------------------------------------------------------------------
Sweden 9,344 14,600 12,332 8,835 5,418 7,830 11,084
--------------------------------------------------------------------------------
% of sales 13.7 % 19.6 % 19.0 % 14.6 % 10.4 % 13.6 % 20.0 %
--------------------------------------------------------------------------------
Norway 415 399 310 -303 -103 871 853
--------------------------------------------------------------------------------
% of sales 2.1 % 2.0 % 1.8 % -2.0 % -0.6 % 5.3 % 5.5 %
--------------------------------------------------------------------------------
Denmark -1,634 -6 -831 -1,268 -3,224 -4,389 -1,571
--------------------------------------------------------------------------------
% of sales -26.1 % -0.1 % -9.9 % -18.8 % -56.2 % -47.3 % -16.1 %
--------------------------------------------------------------------------------
Central Europe -1,189
--------------------------------------------------------------------------------
% of sales -11.2 %
--------------------------------------------------------------------------------
Eastern Europe -2,218 -1,089 -1,488 -4,047 -4,839 -5,192 -3,008
--------------------------------------------------------------------------------
% of sales -17.2 % -6.9 % -10.4 % -37.8 % -53.7 % -45.8 % -25.1 %
--------------------------------------------------------------------------------
Non-allocated 0 0 0 0 5,746 1,031 0
capital gains
and other income
--------------------------------------------------------------------------------
Non-allocated -4,485 -3,072 -1,304 -1,931 -2,073 -2,433 -2,052
Group activities
--------------------------------------------------------------------------------
Eliminations 45 -42 29 -66 27 17 -21
--------------------------------------------------------------------------------
Group EBITA 2,455 14,056 15,153 3,766 1,503 1,387 9,577
--------------------------------------------------------------------------------
% of sales 1.7 % 9.6 % 11.6 % 3.3 % 1.5 % 1.2 % 8.3 %
--------------------------------------------------------------------------------
LARGEST SHAREHOLDERS
TEN LARGEST SHAREHOLDERS 31 Mar 2011 SHARES %
-------------------------------------------------------------------------------
1 Hartwall Capital Oy Ab 4 993 619 15,63
-------------------------------------------------------------------------------
2 K. Hartwall Invest Oy 2 432 000 7,61
-------------------------------------------------------------------------------
3 Rakennusmestarien Säätiö (Construction engineers' fund) 1 862 620 5,83
-------------------------------------------------------------------------------
4 Mariatorp Oy 1 150 000 3,60
-------------------------------------------------------------------------------
5 Sijoitus-Wipunen Oy 750 000 2,35
-------------------------------------------------------------------------------
6 Skandinaviska Enskilda Banken AB 675 000 2,11
-------------------------------------------------------------------------------
7 Odin Finland 641 455 2,01
-------------------------------------------------------------------------------
8 Nordea Nordenfund 519 348 1,63
-------------------------------------------------------------------------------
9 Fondita Nordic Micro Cap 390 000 1,22
-------------------------------------------------------------------------------
10 Arrex Beteiligungs-GmbH 374 532 1,17
-------------------------------------------------------------------------------
Ten largest owners, total 13 788 574 43,16
-------------------------------------------------------------------------------
Nominee registered and non-Finnish holders 8 233 198 25,77
-------------------------------------------------------------------------------
Others 9 927 437 31,07
-------------------------------------------------------------------------------
Total 31 949 209 100,00
-------------------------------------------------------------------------------
There were no material transactions with related parties during the period
under review.
This report includes certain forward-looking statements based on the
management's expectations at the time they were made. These involve risks and
uncertainties and are subject to change due to changes in general economic and
industry conditions.
Vantaa 6 May 2011
CRAMO PLC
Board of Directors
The information in this Interim Report is based on unaudited figures.
BRIEFING
Cramo will hold a briefing and a live webcast at the Palace Gourmet restaurant
(Conference hall), address: Eteläranta 10, Helsinki, on 9 May 2011 at 11:00 am.
The briefing will be in English.
To watch the briefing live on the Internet, go to www.cramo.com. A replay of
the webcast will be available at www.cramo.com from 9 May 2011 in the
afternoon.
PUBLICATION OF FINANCIAL INFORMATION 2011
Cramo will publish two more Interim Reports in 2011.
The January-June Interim Report will be published on Thursday, 4 August 2011.
The January-September Interim Report will be published on Tuesday, 1 November
2011.
FURTHER INFORMATION
Vesa Koivula
President and CEO, tel. +358 10 661 10, +358 40 510 5710
Martti Ala-Härkönen
CFO, tel. +358 10 661 10, +358 40 737 6633
DISTRIBUTION
NASDAQ OMX Helsinki Ltd.
Principal media
www.cramo.com
Cramo is a service company specialising in construction machinery and equipment
rental and rental-related services, as well as the rental and sale of modular
space. As one of the industry's leading service providers in the Nordic
countries and Central and Eastern Europe, Cramo operates in fifteen countries
with approximately 400 depots. With a group staff close to 2.400, Cramo's
consolidated sales for 2010 was EUR 500 million and Cramo shares are listed on
the NASDAQ OMX Helsinki Ltd. For further information, please visit
www.cramo.com.
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