2017-02-07 08:00:01 CET
2017-02-07 08:00:01 CET
REGULATED INFORMATION
Cramo Oyj - Financial Statement Release
Cramo's Financial Statements Bulletin for January-December 2016
Profitability improvement throughout the year
Vantaa, Finland, 2017-02-07 08:00 CET (GLOBE NEWSWIRE) -- Cramo Plc Financial
Statements Bulletin 7 February 2017, at 9.00 am (EET)
Cramo's Financial Statements Bulletin for January-December 2016
Profitability improvement throughout the year
OCTOBER–DECEMBER 2016
-- Sales EUR 192.9 (187.2) million, up by 3.1%. In local currencies, sales
grew by 5.1%.
-- Comparable EBITA EUR 32.6 (27.0) million and comparable EBITA margin 16.9%
(14.4%)
-- EBITA EUR 28.2 (26.1) million and EBITA margin 14.6% (14.0%)
-- Comparable earnings per share EUR 0.51 (0.39); earnings per share EUR 0.35
(0.37)
-- Cash flow from operating activities EUR 58.2 (73.5) million and cash flow
after investments EUR 16.8 (37.0) million
-- Cramo Group will change its financial reporting practices and in 2017, it
will publish Business Reviews for the first three and nine months of the
year instead of interim reports.
JANUARY–DECEMBER 2016
-- Sales EUR 712.3 (667.9) million, up by 6.6%. In local currencies, sales
grew by 7.7%.
-- Comparable EBITA EUR 111.1 (86.8) million and comparable EBITA margin 15.6%
(13.0%)
-- EBITA EUR 106.7 (84.8) million and EBITA margin 15.0% (12.7%)
-- Comparable earnings per share EUR 1.70 (1.17); earnings per share EUR 1.54
(1.13)
-- Comparable return on equity 14.9% (10.9%); return on equity 13.6% (10.5%)
-- Cash flow from operating activities EUR 172.2 (174.9) million and cash flow
after investments EUR 7.3 (35.6) million
-- Gearing 74.5% (75.1%)
-- The Board of Directors proposes a dividend of EUR 0.75 (0.65) per share
(Comparable figures excludes items affecting comparability, see page 3)
CHANGES IN ORGANISATION DURING THE FOURTH QUARTER
-- Mr Aku Rumpunen was appointed Cramo’s CFO as of 21 December 2016.
CHANGE IN GUIDING PRINCIPLES
-- As of 2017, and relating to Cramo’s new strategy, the company has changed
its guidance policy and will discontinue to provide numerical guidance on
sales and EBITA profitability on group level. More information will be
provided on Capital Markets Day on 16th February 2017.
CEO LEIF GUSTAFSSON'S COMMENT
Profitability improvement continued
2016 was a successful year for Cramo Group. The demand for equipment rental and
modular space developed favourably, and we succeeded in increasing sales and
EBITA result in both product areas. We also achieved all targets set for the
strategy period 2014–2016.
Our full-year sales grew in local currencies by 7.7% and fourth-quarter sales
by 5.1%. In local currencies, sales grew in all markets, with the exception of
Norway and Eastern Europe. As for product areas, modular space sales growth was
driven throughout the year by high number of new modular space deliveries.
Our profitability also continued to develop favourably. Our full-year
comparable EBITA margin increased from 13.0% to 15.6% and fourth-quarter
comparable EBITA margin from 14.4% to 16.9%. Full-year comparable profitability
improved in all markets, with the exception of Norway and Eastern Europe. I am
particularly satisfied with the fact that the Central European operations
turned profitable for the full year. Profit development also continued to be
strong in Finland and Sweden as well as in the entire equipment rental product
area. In addition to the favourable market situation, factors contributing to
the good result included the successful implementation of our strategy and the
correct allocation of investments.
I expect the demand for equipment rental and modular space to stay on a good
level in 2017. Over the long term, the demand for rental services is supported
by several megatrends, such as urbanisation and efforts to achieve sustainable
development. Indeed, one of our most significant development projects has been
to clarify our sustainable development strategy so that it is taken into
account as thoroughly as possible in all of our operations.
In 2016, we started preparing our new strategy. As part of this process we are
reviewing the development and performance of our business operations on all
markets to improve profitability. Our target is to turn Cramo into a more
efficient operator in the equipment rental and modular space markets. I believe
that Cramo’s strong position on most of our markets provides good opportunities
for this.
SUMMARY OF FINANCIAL PERFORMANCE
KEY FIGURES AND 10-12/ 10-12/ Change % 1-12/1 1-12/1 Change %
RATIOS (MEUR) 16 15 6 5
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Income statement
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Sales 192.9 187.2 3.1 % 712.3 667.9 6.6 %
--------------------------------------------------------------------------------
EBITDA 60.8 51.9 17.1 % 218.7 185.7 17.8 %
--------------------------------------------------------------------------------
Comparable EBITA 1) 32.6 27.0 20.7 % 111.1 86.8 27.9 %
--------------------------------------------------------------------------------
% of sales 16.9% 14.4% 15.6% 13.0%
--------------------------------------------------------------------------------
EBITA 1) 28.2 26.1 8.0 % 106.7 84.8 25.8 %
--------------------------------------------------------------------------------
% of sales 14.6% 14.0% 15.0% 12.7%
--------------------------------------------------------------------------------
Operating profit 23.9 24.2 -1.4 % 98.7 76.7 28.7 %
(EBIT) 2)
--------------------------------------------------------------------------------
Profit before taxes 20.4 21.3 -4.2 % 86.9 63.8 36.2 %
(EBT)
--------------------------------------------------------------------------------
Profit for the period 15.4 16.6 -7.3 % 68.6 49.7 37.9 %
3)
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Share related
information
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Comparable earnings 0.51 0.39 28.5 % 1.70 1.17 45.5 %
per share (EPS), EUR
3)
--------------------------------------------------------------------------------
Earnings per share 0.35 0.37 -7.5 % 1.54 1.13 36.8 %
(EPS), EUR
--------------------------------------------------------------------------------
Earnings per share 0.34 0.37 -8.0 % 1.53 1.12 36.6 %
(EPS), diluted, EUR
--------------------------------------------------------------------------------
Shareholders’ equity 11.69 11.05 5.8 %
per share, EUR
--------------------------------------------------------------------------------
Other information
--------------------------------------------------------------------------------
Return on investment, 11.2 % 9.0 %
%
--------------------------------------------------------------------------------
Return on equity, % 13.6 % 10.5 %
4)
--------------------------------------------------------------------------------
Equity ratio, % 45.6 % 45.7 %
--------------------------------------------------------------------------------
Gearing, % 74.5 % 75.1 %
--------------------------------------------------------------------------------
Net interest-bearing 387.0 368.4 5.1 %
liabilities
--------------------------------------------------------------------------------
Net debt / EBITDA 1.77 1.98 -10.6 %
--------------------------------------------------------------------------------
Gross capital 47.8 40.7 17.5 % 207.3 175.0 18.4 %
expenditure (incl.
acquisitions)
--------------------------------------------------------------------------------
of which 0.0 1.3 -100.0 % 4.4 9.8 -55.0 %
acquisitions/busines
s combinations
--------------------------------------------------------------------------------
Cash flow from 58.2 73.5 -20.8 % 172.2 174.9 -1.6 %
operating activities
5)
--------------------------------------------------------------------------------
Cash flow after 16.8 37.0 -54.5 % 7.3 35.6 -79.4 %
investments
--------------------------------------------------------------------------------
Average number of 2,550 2,486 2.6 %
personnel (FTE)
--------------------------------------------------------------------------------
Number of personnel 2,562 2,473 3.6 %
at period end (FTE)
--------------------------------------------------------------------------------
Items affecting 10-12/1 10-12/15 Change 1-12/16 1-12/15 Change
comparability 6 -% -%
(MEUR)
--------------------------------------------------------------------------------
EBITA 1) -4.3 -0.8 -4.3 -2.0
--------------------------------------------------------------------------------
Operating profit -7.5 -0.8 -7.5 -2.0
(EBIT) 2)
--------------------------------------------------------------------------------
Profit for the -7.1 -0.8 -7.1 -1.8
period 3)
--------------------------------------------------------------------------------
Cash flow effect 0.0 -0.8 0.0 -1.8
--------------------------------------------------------------------------------
1. Items affecting comparability of EBITA were EUR 4.3 million in the fourth
quarter 2016. Items were related to negative impact of impairments EUR 4.8
million from Danish equipment rental operations and Latvian and Lithuanian
operations and positive impact of EUR 0.5 million from reclassification of
loans in Fortrent group. Third quarter 2015 included EUR 1.2 million in
costs relating to the change of President and CEO. The fourth quarter 2015
included EUR 0.8 million in costs relating to restructuring in Central
Europe. Items had no cash flow effect.
2. In addition to above, items affecting comparability of EBIT were EUR 3.2
million in the fourth quarter 2016. Items were related to negative impact
of impairments of intangible assets EUR 3.2 million from Danish equipment
rental operations and Latvian and Lithuanian operations. Items had no cash
flow effect. Full year comparable EBIT excluding items affecting
comparability was EUR 106.2 (78.7) million. The fourth quarter comparable
EBIT was EUR 31.4 (25.1) million.
3. In addition to above, items affecting comparability of profit for the
period were EUR 0.4 million in fourth quarter 2016 related to tax impact of
the items. Profit for the period excluding these items was EUR 75.6 (51.5)
million. Comparable earnings per share is calculated without the impact of
these items.
4. Comparable return on equity excluding above items affecting comparability
were 14.9% (10.9%)
5. Starting from 2016, the reporting line of unpaid investments in the cash
flow statement has been changed. As a result, the operating cash flow for
the period 1–12/2015 decreased by EUR 8.0 million and for the period
10-12/2015 increased by EUR 2.2 million respecitively.
Calculation of key figures is presented on page 27.
Sales
January–December 2016
Cramo Group’s full-year consolidated sales were EUR 712.3 (667.9) million,
showing an increase of 6.6%. In local currencies, sales grew by 7.7%.
Sales grew by 16.5% in Finland, by 7.4% in Sweden (8.7% in the local currency),
by 13.2% in Denmark and by 1.6% in Central Europe. Sales decreased by 4.3% in
Norway (a change of -0.7% in the local currency) and by 1.1% in Eastern Europe
(a change of -0.3% in local currencies).
As for product areas, sales growth was 4.7% (5.9% in local currencies) for
equipment rental and 17.6% (18.6% in local currencies) for modular space.
Plenty of new modular space deliveries took place during the year, which
increased the sales of assembly services in particular.
Rental sales of modular space increased by 10.8%.
October–December 2016
In the fourth quarter, the Group’s consolidated sales were EUR 192.9 (187.2)
million, growing by 3.1%. In local currencies, sales grew by 5.1%. Sales grew
by 17.6% in Finland, by 4.7% in Denmark, by 11.8% in Norway (8.9% in the local
currency) and by 3.5% in Eastern Europe (4.1% in local currencies). Sales
decreased by 1.7% in Sweden (an increase of 2.7% in the local currency), and by
3.5% in Central Europe.
As for product areas, sales growth during the fourth quarter was 3.0% (5.1% in
local currencies) for equipment rental and 3.2% (5.3% in local currencies) for
modular space.
Costs
The Group costs as a share of sales decreased both in the fourth quarter and
during the entire financial year, which had a positive impact on profitability.
During the financial year, direct costs (materials and services) as a share of
sales reduced from 35.4% to 33.6%. Indirect costs (employee benefit expenses
and other operating expenses) as a share of sales decreased from 38.8% to
38.3%. Indirect costs for 2015 included EUR 2.0 million in costs relating to
the change of President and CEO and operational restructuring in Central
Europe. Depreciation and impairment on tangible assets in relation to sales
increased from 15.1% to 15.7%. In the fourth quarter of 2016, a EUR 4.8 million
impairment was recorded on Latvian and Lithuanian operations and Danish
equipment rental operations.
Result
January–December 2016
The result and profitability for 2016 improved year-on-year. Comparable
profitability improved on all markets, with the exception of Norway and Eastern
Europe. Comparable EBITA was EUR 111.1 (86.8) million and comparable EBITA
margin was 15.6% (13.0%).
Comparable EBITA was EUR 90.5 (65.7) million, or 15.2% (11.6%) of sales, for
equipment rental and EUR 30.8 (29.5) million, or 26.2% (29.5%) of sales, for
modular space. Modular space EBITA margin was negatively affected by the
significant proportion of assembly and disassembly services, high repair
activity and measures taken to support further growth.
Comparable earnings per share for the financial year were EUR 1.70 (1.17).
Comparable return on equity (rolling 12 months) improved and was 14.9% (10.9%).
Full-year cash flow from operating activities decreased and was EUR 172.2
(174.9) million. The following items affected negatively on cash flow in
comparison to 2015. The group received tax refund of EUR 8.3 million in 2015.
Change in net working capital had a positive effect by EUR 11.4 million on cash
flow in 2015 compared to negative impact of EUR 1.5 million in 2016. Also cash
flow of net financial items were lower by EUR 8.0 million compared to 2015 due
to timing difference in realisation of foreign exchange differences arising
from the hedged exposure and the hedging instruments. Cash flow after
investments was EUR 7.3 (35.6) million. Fleet investments were increased and
gross capital expenditure was EUR 207.3 (175.0) million.
The Group’s gearing was 74.5% (75.1%) at the end of 2016. Net debt per EBITDA
stood at 1.77 (1.98) at the end of the year.
October–December 2016
In the fourth quarter, comparable EBITA was EUR 32.6 (27.0) million and
comparable EBITA margin was 16.9% (14.4%) of sales. Comparable profitability
improved on all markets, with the exception of Norway.
In the fourth quarter, comparable EBITA was EUR 27.6 (20.8) million, or 17.1%
(13.2%) of sales, for equipment rental. For modular space, EBITA was EUR 8.2
(7.9) million, or 26.0% (25.8%) of sales. For modular space, EBITA and EBITA
margin were negatively affected by the significant proportion of assembly
services during the period, periodically high repair activity and measures
taken to support further growth.
In the fourth quarter, cash flow from operating activities decreased and was
EUR 58.2 (73.5) million. Cash flow after investments was EUR 16.8 (37.0)
million. Fleet investments were increased and gross capital expenditure was EUR
47.8 (40.7) million.
Proposal for profit distribution
The Board of Directors proposes to the Annual General Meeting that a dividend
of EUR 0.75 (0.65) be paid for the financial year 2016.
MARKET OUTLOOK
Construction market is estimated to have increased in 2016 in all Nordic
countries as well as in Germany and Austria. According to Euroconstruct’s
estimate, growth was nearly 7% in Finland, Sweden and Norway. In Denmark,
Germany and Austria, construction increased by approximately 1.6–2.5%. In
Poland, the Czech Republic, Slovakia, the Baltic countries and Russia,
construction decreased.
The demand for equipment rental services usually follows the development of
construction with a delay. In addition to construction volume, the demand is
affected by industrial investments and the increase in the rental penetration
rate. Tightening legislation and the requirement to improve the efficiency and
quality of construction increase the need for different types of rental-related
services.
The demand for modular space is boosted by the increase in the need for and
popularity of modifiable and easily implementable space solutions. Demand is
increased by migration flows within countries and changes in demographics.
Cramo believes that the long-term demand for both equipment rental and modular
space is also supported by megatrends, such as urbanisation, the sharing
economy and the increasing emphasis on sustainability.
According to its June forecast, the European Rental Association (ERA) expected
the use of equipment rental services to increase in 2016 in all of Cramo’s
markets reported by ERA.
According to Cramo’s estimates, the demand for modular space has increased in
the Nordic countries by nearly 6% per year during the past five years.
In Cramo countries, the construction market outlook for 2017 is mainly
positive. The construction market analysts Euroconstruct and Forecon estimate
that construction will increase in all of Cramo’s operating countries with the
exception of the Czech Republic, Lithuania and Russia. Construction market is
estimated to grow approximately 1 – 3 % in Finland, Sweden, Norway and Denmark
and Germany. However, Swedish Construction Federation (Sverige’s
Byggindustrier) estimates 5% growth for Sweden. ERA forecasts that the
equipment rental market will grow in all of Cramo’s operating countries that
are within the scope of ERA’s forecast.
(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, Helsinki, on Tuesday, 7 February 2017 at
11.00 am. The briefing will be in English.
It can be viewed live on the Internet at www.cramogroup.com. A replay of the
webcast will be available at www.cramogroup.com from 7 February 2017 in the
afternoon.
PUBLICATION OF FINANCIAL INFORMATION IN 2017
The Annual Report containing the full financial statements for 2016 will be
published in electronic format in week 10/2017.
Cramo Plc’s 2017 Annual General Meeting will take place on Thursday, 30 March
2017, in Helsinki.
In 2017, Cramo will publish three financial reviews:
Business Review January–March 2017 on 28 April 2017
Half Year Financial Report January–June 2017 on 26 July 2017
Business Review January–September 2017 on 25 October 2017.
CRAMO PLC
Leif Gustafsson
President and CEO
Further information:
Mr Leif Gustafsson, President and CEO, tel: +358 10 661 10
Mr Aku Rumpunen, CFO, tel: +358 10 661 10, +358 40 556 3546
Mr Mattias Rådström, SVP, Communication, Marketing and Investor Relations, tel:
+46 70 868 7045
Distribution:
Nasdaq Helsinki Ltd.
Principal media
www.cramogroup.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 and in
about 330 depots. With a group staff around 2.500, Cramo's consolidated sales
in 2015 was EUR 668 million. Cramo shares are listed on the Nasdaq Helsinki
Ltd.
Read more: www.cramogroup.com, www.twitter.com/cramogroup
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