2010-10-29 08:00:00 CEST
2010-10-29 08:00:09 CEST
REGULATED INFORMATION
Cramo Oyj - Interim report (Q1 and Q3)
Cramo's Interim Report for 1 January-30 September 2010 - Stronger markets, improving profitability
Cramo Plc Interim Report 29 October 2010 at 9.00 am Finnish time (GMT +2) Cramo's Interim Report for 1 January-30 September 2010 Stronger markets, improving profitability - Consolidated sales EUR 345.7 (331.3) million, change 4.4% - EBITA EUR 20.4 (15.9) million, change 28.4%. EBITA margin 5.9% (4.8%) - Q3/2010 sales growth 13.3%; EBITA EUR 15.2 (9.6) million, change 58.2%. EBITA margin 11.6% (8.3%) - Earnings per share: undiluted EUR -0.35 (-0.40) and diluted EUR -0.34 (-0.40) Q3 earnings per share EUR 0.06 (-0.03) - Cash flow after investments EUR 26.7 (35.3) million - Gearing 107.5 (113.1) % - The market turn that started at the end of Q2 continued in all of Cramo's markets - The Group renewed its financial targets for 2010-2013 - The equipment rental market is improving. Gearing to go down in 2010 based on steady positive cash flow. EBITA margin to improve compared with 2009. -------------------------------------------------------------------------------- | KEY FIGURES AND RATIOS (EUR | 7-9/10 | 7-9/09 | 1-9/10 | 1-9/09 | 1-12/09 | | 1,000) | | | | | | -------------------------------------------------------------------------------- | Income statement | | | | | | -------------------------------------------------------------------------------- | Sales | 130,35 | 115,08 | 345,71 | 331,27 | 446,676 | | | 6 | 9 | 9 | 4 | | -------------------------------------------------------------------------------- | EBITDA | 36,461 | 31,087 | 83,889 | 80,938 | 105,955 | -------------------------------------------------------------------------------- | Operating profit (EBITA) | 15,153 | 9,577 | 20,422 | 15,899 | 17,286 | | before amortisation and | | | | | | | impairment of intangible | | | | | | | assets resulting from | | | | | | | acquisitions | | | | | | -------------------------------------------------------------------------------- | Operating profit / loss (EBIT) | 13,315 | 7,838 | 15,278 | 10,799 | -11,467 | -------------------------------------------------------------------------------- | Profit / loss before tax (EBT) | 7,186 | 2,051 | -3,564 | -6,708 | -34,202 | -------------------------------------------------------------------------------- | Profit / loss for the period | 1,786 | -998 | -10,56 | -12,37 | -39,858 | | | | | 7 | 3 | | -------------------------------------------------------------------------------- | Share related information | | | | | | -------------------------------------------------------------------------------- | Earnings per share (EPS), EUR | 0.06 | -0.03 | -0.35 | -0.40 | -1.30 | -------------------------------------------------------------------------------- | Earnings per share (EPS), | 0.06 | -0.03 | -0.34 | -0.40 | -1.28 | | diluted, EUR | | | | | | -------------------------------------------------------------------------------- | Shareholders' equity per | | | 10.03 | 10.37 | 9.50 | | share, EUR | | | | | | -------------------------------------------------------------------------------- | Other information | | | | | | -------------------------------------------------------------------------------- | Return on investment, % 1) | | | -0.7 % | 3.0 % | -1.2 % | -------------------------------------------------------------------------------- | Return on equity, % 1) | | | -10.6 | -1.6 % | -12.1 % | | | | | % | | | -------------------------------------------------------------------------------- | Equity ratio, % | | | 38.5 % | 38.0 % | 37.4 % | -------------------------------------------------------------------------------- | Gearing, % | | | 107.5 | 113.1 | 113.4 % | | | | | % | % | | -------------------------------------------------------------------------------- | Net interest-bearing | | | 381,05 | 412,66 | 383,682 | | liabilities | | | 0 | 4 | | -------------------------------------------------------------------------------- | Gross capital expenditure | | | 33,204 | 25,318 | 31,931 | | (incl. acquisitions) | | | | | | -------------------------------------------------------------------------------- | % sales | | | 9.6 % | 7.6 % | 7.1 % | -------------------------------------------------------------------------------- | Cash flow after investments | | | 26,732 | 35,274 | 65,403 | -------------------------------------------------------------------------------- | Average number of personnel | | | 2,070 | 2,443 | 2,356 | | (FTE) | | | | | | -------------------------------------------------------------------------------- | Number of personnel at end of | | | 2,131 | 2,239 | 2,018 | | period (FTE) | | | | | | -------------------------------------------------------------------------------- | 1) Rolling 12 month | | | | | | -------------------------------------------------------------------------------- SUMMARY OF FINANCIAL PERFORMANCE IN JANUARY-SEPTEMBER 2010 Cramo Group's consolidated sales were EUR 345.7 (331.3) million in January-September 2010, showing an increase of 4.4 per cent. Sales for July-September were EUR 130.4 (115.1) million increasing 13.3 per cent. EBITA for January-September was EUR 20.4 (15.9) million, or 5.9 (4.8) per cent of sales. EBITDA was EUR 83.9 (80.9) million, or 24.3 (24.4) per cent of sales. EBITA for July-September was EUR 15.2 (9.6) million, or 11.6 (8.3) per cent of sales. After a weak winter and spring, the rental market saw a positive turn at the end of the second quarter. The upward trend grew stronger in the third quarter, which had a visible impact on the group's sales as well as profit. The cost-saving measures implemented in 2009 also improved Cramo's profit. By the end of the period, fleet utilisation rates had improved substantially. Sales and EBITA developed positively in all segments in the third quarter. Profitability was at a good level in Finland and Sweden, which was in line with Cramo's expectations. In Norway the business swung to profit. EBITA continued to be negative in Denmark and in Central and Eastern Europe, but improved clearly also in these segments from the beginning of the year. Cash flow after investments in January-September was strongly positive, EUR 26.7 (35.3) million. Gearing decreased to 107.5 (113.1) per cent and equity ratio improved to 38.5 (38.0) per cent. During the period under review, Cramo Group renewed its strategic and financial targets for 2010-2013. The targets are to be the customers' first choice as well as the ”best in town” in equipment rental. Other 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 profit distribution policy is the same as before, about one-third of the annual net result. The Group's aim is to achieve the financial target levels as soon as possible. SHORT-TERM MARKET OUTLOOK: MARKETS ARE IMPROVING The construction and equipment rental service markets are expected to grow in Cramo's market areas in the fourth quarter of 2010 and in 2011. According to market forecasts, construction activity started to increase in 2010 in Finland, Sweden and possibly also in Russia. In Poland, growth is expected to continue. However, construction activity in Norway, Denmark, the Czech Republic and the Baltic countries is expected to decline on an annual level. In 2010, the outlook for the Baltic countries has improved. The outlook for construction growth is positive for 2011 in all of Cramo's business segments. The demand for rental services is expected to increase during the fourth quarter of 2010 and continuing into 2011. The improving market acceptance of equipment rental as an alternative to owning supports market growth. Construction companies also find arrangements under which they outsource their equipment to rental services companies increasingly attractive. The Group's gross capital expenditure, excluding acquisitions and business combinations, will be approximately EUR 40 million in 2010. A balance between the demand for and supply of rental equipment was achieved in almost all markets in the third quarter, which provides a solid starting point for business development. GUIDANCE ON GROUP OUTLOOK The Group has modified its guidance concerning the outlook. The new guidance reads: ”The equipment rental market is improving. Gearing to go down in 2010 based on steady positive cash flow. EBITA margin to improve compared with 2009.” The previous guidance was: ”The Group sees a gradual market improvement; however, uncertainty remains. Gearing to go down based on steady positive cash flow. EBITA margin to improve compared with 2009.” CEO'S COMMENT “An upturn has occurred in the market as expected. Residential construction in particular has picked up in several markets. Thanks to improvements in demand and the adjustments we have made, the utilisation rates of Cramo's fleet have substantially improved. Our experiences in Finland and Sweden show that changes in the equipment rental market follow the changes in construction activity with some delay. Although the first signs of recovery in the construction market already appeared in the first half of the year, an upswing in equipment rental only occurred in the third quarter. Because of the positive outlook in construction and the economy, similar developments can be expected in all of Cramo's market areas. We have concluded several outsourcing agreements and acquisitions in the Nordic region within the past six months. Interest in fleet outsourcing is a new trend among not just major construction companies but mid-sized operators as well. This change in the operating method offers particular growth opportunities for large companies - such as Cramo - which are able to provide even major customers with all of the equipment and services they require. As the outlook improves, we will continue to investigate growth opportunities based on acquisitions,” 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, Cramo Plc operates in Finland, Sweden, Norway, Denmark, Estonia, Latvia, Lithuania, Poland, the Czech Republic, Slovakia and Russia. Cramo Group's sales grew by 4.4 per cent in January-September 2010 to EUR 345.7 (331.3) million. Sales increased in Sweden, Norway and Central and Eastern Europe, but decreased in Finland and Denmark. In local currencies, the change in sales was -2.6 per cent. EBITA for January-September was EUR 20.4 (15.9) million, or 5.9 (4.8) per cent of sales. EBITDA was EUR 83.9 (80.9) million, or 24.3 (24.4) per cent of sales. EBITA for January-September was positive in Finland and Sweden. Sales for July-September were EUR 130.4 (115.1) million. Compared with the corresponding period the previous year, sales were up 13.3 per cent. In local currencies, the change in sales was 6.7 per cent. Compared with the previous year, euro-denominated sales increased in all business segments except in Denmark. EBITA for July-September was EUR 15.2 (9.6) million, or 11.6 (8.3) per cent of sales. EBITDA was EUR 36.5 (31.1) million, or 28.0 (27.0) per cent of sales. EBITA for July-September was positive in Finland, Sweden and Norway. Profitability improved markedly in Denmark and Central and Eastern Europe from the first half of the year, but continued to be negative in terms of EBITA. The Group's reorganisation expenses for January-September totalled EUR 1.9 (4.7) million and credit losses and credit loss provisions EUR 3.8 (4.6) million. The result also includes impairment losses on fleet totalling EUR 1.7 (0.0) million. Expenses associated with options totalled EUR 1.7 (1.8) million. EBIT for January-September was EUR 15.3 (10.8) million, or 4.4 (3.3) per cent of sales. Profit before taxes was EUR -3.6 (-6.7) million and profit for the period EUR -10.6 (-12.4) million. Earnings per share were EUR -0.35 (-0.40). Diluted earnings per share were EUR -0.34 (-0.40). Third-quarter earnings per share were EUR 0.06 (-0.03). In accordance with the prudence principle, Cramo has not recognised a deferred tax asset for most of its loss-making subsidiaries in 2010. Return on investment (rolling 12-months) was -0.7 (3.0) per cent and return on equity (rolling 12-months) -10.6 (-1.6) per cent. CAPITAL EXPENDITURE, DEPRECIATION AND IMPAIRMENT Gross capital expenditure for the period was EUR 33.2 (25.3) million, of which EUR 8.2 million relates to acquisitions and business combinations. Investments were targeted at Sweden and the modular spaces business in particular. In fleet management, the targeted balance between the demand for and supply of rental equipment was achieved in the third quarter. Reported depreciation and impairment on equipment and intangible assets were EUR 63.5 (65.0) million. This includes write-downs of EUR 1.7 (0.0) million on the Group's property, plant and equipment and on assets available for sale. Amortisation and impairment on intangible assets resulting from acquisitions totalled EUR 5.1 (5.1) million. At the end of the period, goodwill totalled EUR 146.7 (154.5) million. FINANCIAL POSITION AND BALANCE SHEET The Group showed a positive net cash flow of EUR 29.5 (49.9) million from operating activities in January-September. The third-quarter cash flow from operating activities was EUR 18.3 (28.5) million. Cash flow from investing activities in January-September was EUR -2.8 (-14.6) million. Cash flow from financing activities in January-September was EUR -31.1 (-25.6) million. At the end of the period, cash and cash equivalents amounted to EUR 14.5 (16.2) million, with the net change amounting to EUR -4.3 (9.7) million from the beginning of the year. The Group's cash flow after investments was EUR 26.7 (35.3) million in January-September. At the end of the period, the Group's balance sheet included EUR 2.8 (6.0) million of assets available for sale. At the end of the period, Cramo Group's gross interest-bearing liabilities were EUR 395.6 (428.8) million. Of the variable-rate loans, EUR 190.2 (152.7) million were hedged by way of interest rate swaps. Hedge accounting is applied to EUR 103.9 (136.8) million of these interest rate hedges. In the third quarter, the Group increased the share of loans with a fixed rate of interest. On 30 September 2010, Cramo Group had unused committed credit limits (excluding leasing limits) of EUR 125.5 (122.0) million, of which non-current limits represented EUR 100.0 (110.0) million and current limits EUR 25.5 (12.0) million. On 30 September 2010, Cramo Group's net interest-bearing liabilities totalled EUR 381.1 (412.7) million. Gearing continued to decrease as planned, amounting to 107.5 (113.1) per cent at the end of the period. Property, plant and equipment amounted to EUR 506.0 (548.4) million of the balance sheet total. The balance sheet total on 30 September 2010 was EUR 930.5 (974.6) million and the equity ratio was 38.5 (38.0) per cent. During the period under review, the euro weakened against most of Cramo's other operating currencies. This had a positive effect on the Group's comprehensive income for the period and on equity. Rental liabilities associated with off-balance sheet operational leasing agreements totalled EUR 39.3 (48.9) million on 30 September 2010. The off-balance sheet interest liability associated with the hybrid loan was EUR 2.5 (2.5) million at the end of the period. 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 and Russia. 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, has been consolidated into the group according to SIC-12 as a Special Purpose Entity. At the end of the period under review, equipment rental services were provided through a network of 288 (286) depots. NEW STRATEGIC AND FINANCIAL TARGETS AND BUSINESS DEVELOPMENT Cramo announced its new strategic and financial targets for 2010-2013 during the Capital Markets Day held on 1 September 2010. Cramo's strategic targets for 2010-2013 are to be the customer's first choice as well as the “best in town” in the rental business, meaning the leading rental solutions provider in each homogenous local market (such as a city, district or region). 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 profit distribution policy remains unchanged: about one-third of the yearly net result. The Group's target is to reach the financial target levels as soon as possible during the period 2010-2013. Achieving the strategic targets requires the roll-out of a uniform Cramo Concept and harmonised key processes in all markets, the roll-out of the “best in town” strategy in existing and new geographical areas in Europe and expanding the modular space business outside Finland and Sweden more strongly than before. Success naturally also requires the input of competent, motivated and committed personnel. A positive cash flow, improvement of profitability and a decreasing gearing continue to be the Group's key targets for 2010. This also enables growth based on acquisitions. Growth does not require any significant fleet investments in 2010. HUMAN RESOURCES AND CHANGES IN MANAGEMENT During the period under review, Group staff averaged 2,070 (2,443). In addition, the Group employed approximately 97 (31) persons as hired work force. At the end of the period, Group staff numbered 2,131 (2,239). 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, 570 (631) employees; Sweden, 735 (698); Norway, 189 (188); Denmark, 118 (120) and Central and Eastern Europe, 518 (602) employees. HR development programmes will be continued, focusing further on developing customer service and sales skills and fleet management. Mr Per Lundquist (43), M.Sc. (Eng.) assumed his position as CIO and member of the Cramo Group Management Team in August. PERFORMANCE BY BUSINESS SEGMENT Cramo Group's business segments consist of Finland, Sweden, Norway, Denmark and Central and Eastern Europe. In addition to segment information, Cramo also reports on the order book value for modular space. Finland -------------------------------------------------------------------------------- | Finland (EUR | 7-9/1 | 7-9/0 | Change | 1-9/10 | 1-9/09 | Change | 1-12/0 | | 1,000) | 0 | 9 | % | | | % | 9 | -------------------------------------------------------------------------------- | Sales | 27,43 | 23,83 | 15.1 % | 69,181 | 69,686 | -0.7 % | 92,067 | | | 0 | 4 | | | | | | -------------------------------------------------------------------------------- | EBITA | 6,105 | 4,291 | 42.3 % | 9,201 | 7,052 | 30.5 % | 10,704 | -------------------------------------------------------------------------------- | EBITA-% | 22.3 | 18.0 | | 13.3 % | 10.1 % | | 11.6 % | | | % | % | | | | | | -------------------------------------------------------------------------------- | No of employees | | | | 550 | 607 | -9.4 % | 472 | | (FTE) | | | | | | | | -------------------------------------------------------------------------------- | No of depots | | | | 58 | 58 | 0.0 % | 57 | -------------------------------------------------------------------------------- Cramo is the second largest player in the equipment rental market in Finland. There are also many small and specialised competitors in Finland. The number of depots at the end of the period under review was 58 (58). The Finnish operations reported sales of EUR 69.2 (69.7) million for January-September, for a decrease of 0.7 per cent. EBITA totalled EUR 9.2 (7.1) million, or 13.3 (10.1) per cent of sales. Sales for July-September were EUR 27.4 (23.8) million, increasing 15.1 per cent. EBITA was EUR 6.1 (4.3) million, or 22.3 (18.0) per cent of sales. The recovery in demand and successfully completed adjustments had a positive impact on the profit. In 2009 and in the first half of 2010 Cramo converted a total of 21 depots into entrepreneur-managed franchise outlets, which has increased the flexibility of operations. The recovery of the economy and the construction industry has been visible as a large number of housing starts in particular. The increase in renovation projects in the first half of the year has also clearly exceeded typical seasonal variation. While civil engineering is picking up thanks to government measures to stimulate economic recovery, commercial and office construction starts remain at a low level. The profitability of modular space has remained good. The integration of the outsourcing arrangements made in the second quarter has progressed as planned. According to the forecast published by the Confederation of Finnish Construction Industries RT in October, construction will grow by 2.0 per cent in 2010 and 3.0 per cent in 2011 in Finland. According to the forecast published by Euroconstruct in June, construction will show an upturn with a growth rate of approximately one per cent in Finland in 2010. Residential construction is expected to pick up significantly compared with the previous year, while commercial and office construction will decrease further. Civil engineering is expected to remain at the level of 2009. According to the Euroconstruct forecast, construction in 2011 will remain at the level of 2010. Cramo's strategic target in Finland is to increase its market share, particularly in the industrial maintenance sector, and to restore profitability to the pre-downturn level of 2008. Sweden -------------------------------------------------------------------------------- | Sweden (EUR | 7-9/1 | 7-9/0 | Change | 1-9/10 | 1-9/09 | Change | 1-12/0 | | 1,000) | 0 | 9 | % | | | % | 9 | -------------------------------------------------------------------------------- | Sales | 64,83 | 55,29 | 17.3 % | 177,33 | 158,30 | 12.0 % | 215,67 | | | 9 | 6 | | 7 | 2 | | 5 | -------------------------------------------------------------------------------- | EBITA | 12,33 | 11,08 | 11.3 % | 26,586 | 28,197 | -5.7 % | 36,026 | | | 2 | 4 | | | | | | -------------------------------------------------------------------------------- | EBITA-% | 19.0 | 20.0 | | 15.0 % | 17.8 % | | 16.7 % | | | % | % | | | | | | -------------------------------------------------------------------------------- | No of employees | | | | 698 | 657 | 6.2 % | 657 | | (FTE) | | | | | | | | -------------------------------------------------------------------------------- | No of depots | | | | 119 | 115 | 3.5 % | 116 | -------------------------------------------------------------------------------- Cramo is the clear market leader in the Swedish equipment rental business, and the company successfully strengthened its position during the economic downturn and in the first half of 2010. At the end of the period, Cramo had 119 (115) depots in Sweden. The Swedish operations reported sales of EUR 177.4 (158.3) million for January-September, for an increase of 12.0 per cent. In local currencies, the change in sales was 1.4 per cent. EBITA was EUR 26.6 (28.2) million, or 15.0 (17.8) per cent of sales. Sales for July-September were EUR 64.8 (55.3) million, increasing 17.3 per cent. In local currencies, the change in sales was 7.2 per cent. EBITA was EUR 12.3 (11.1) million, or 19.0 (20.0) per cent of sales. Fleet utilisation rates were at a good level at the end of the period. Construction and the demand for equipment rental services continued to be favourable. Growth has been particularly strong in the Stockholm area and in southern Sweden, and it is expected to expand to the whole country. In July, Cramo acquired the rental business of AB Svensk Byggleasing in the Stockholm area. Following the acquisition, five employees transferred to Cramo, and the company opened a new depot in Upplands Väsby north of Stockholm. The acquisition reinforces Cramo's regional market position. The Swedish Construction Federation (Sveriges Byggindustrier) estimated in October 2010 that construction will grow by three per cent in 2010 and five per cent in 2011. The growth in construction output is shifting from civil engineering to residential construction and thereby especially to renovation. Commercial and office construction is still expected to decline in the current year. In June, Euroconstruct estimated that the Swedish construction market will show an upturn with a growth rate of two per cent in 2010. Euroconstruct forecasts a growth rate of almost 8 per cent for 2011. 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 | 7-9/1 | 7-9/0 | Change | 1-9/10 | 1-9/09 | Change | 1-12/0 | | 1,000) | 0 | 9 | % | | | % | 9 | -------------------------------------------------------------------------------- | Sales | 17,02 | 15,61 | 9.0 % | 49,453 | 47,108 | 5.0 % | 63,427 | | | 3 | 5 | | | | | | -------------------------------------------------------------------------------- | EBITA | 310 | 853 | -63.7 | -96 | 3,124 | *) | 3,995 | | | | | % | | | | | -------------------------------------------------------------------------------- | EBITA-% | 1.8 % | 5.5 % | | -0.2 % | 6.6 % | | 6.3 % | -------------------------------------------------------------------------------- | No of employees | | | | 189 | 188 | 0.5 % | 178 | | (FTE) | | | | | | | | -------------------------------------------------------------------------------- | No of depots | | | | 29 | 27 | 7.4 % | 27 | -------------------------------------------------------------------------------- *) Change over 100% 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. The Norwegian operations reported sales of EUR 49.5 (47.1) million for January-September, for an increase of 5.0 per cent. In the local currency, the change in sales was -4.5 per cent. EBITA was EUR -0.1 (3.1) million, or -0.2 (6.6) per cent of sales. The result includes credit losses and credit loss provisions of EUR 0.6 (0.2) million. Sales for July-September were EUR 17.0 (15.6) million, for an increase of 9.0 per cent. In the local currency, the change in sales was 0.9 per cent. The business swung to profit, and EBITA was EUR 0.3 (0.9) million, or 1.8 (5.5) per cent of sales. While construction activity declined in the first half of the year, the market is expected to pick up before the year-end, with more marked recovery expected in 2011. In Norway, price competition was intense in the first half of the year, which is also reflected in Cramo's profit. However, price levels are gradually improving as expected. In August, Cramo signed a strategic co-operation agreement with Nordic Crane Group AS for the next five years. Nordic Crane Group is a Norwegian mobile crane supplier. The agreement covers the entire Nordic region. As a part of the arrangement Cramo acquired the entire share capital of Hego Maskinutleie AS, a Bergen-based access equipment rental company, from Nordic Crane. The agreements widen Cramo's customer portfolio in the industrial sector in particular. Cramo will continue the measures aimed at improving the profitability of the Norwegian operations. These measures include a reorganisation of logistics and transport, and the service and maintenance network. In June, Euroconstruct estimated that construction will decrease by about four per cent in Norway in 2010. In residential construction, growth will be achieved in both new construction and renovation projects, but a clear decline is predicted in commercial and office construction. Civil engineering will decrease as the government reduces its measures to stimulate economic recovery. For 2011 Euroconstruct predicts a decline of about two per cent for the Norwegian construction market. 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 | 7-9/1 | 7-9/0 | Change | 1-9/10 | 1-9/09 | Change | 1-12/0 | | 1,000) | 0 | 9 | % | | | % | 9 | -------------------------------------------------------------------------------- | Sales | 8,395 | 9,747 | -13.9 | 20,863 | 27,028 | -22.8 | 36,303 | | | | | % | | | % | | -------------------------------------------------------------------------------- | EBITA | -831 | -1,57 | 47.1 % | -5,322 | -4,471 | -19.0 | -8,860 | | | | 1 | | | | % | | -------------------------------------------------------------------------------- | EBITA-% | -9.9 | -16.1 | | -25.5 | -16.5 | | -24.4 | | | % | % | | % | % | | % | -------------------------------------------------------------------------------- | No of employees | | | | 118 | 120 | -1.7 % | 115 | | (FTE) | | | | | | | | -------------------------------------------------------------------------------- | No of depots | | | | 17 | 17 | 0.0 % | 17 | -------------------------------------------------------------------------------- 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. The Danish operations reported sales of EUR 20.9 (27.0) million for January-September, for a decrease of 22.8 per cent. EBITA was EUR -5.3 (-4.5) million, or -25.5 (-16.5) per cent of sales. The result for the period includes reorganisation expenses of EUR 0.8 (2.5) million and credit losses and credit loss provisions of EUR 0.8 (0.7) million, as well as an impairment loss of EUR 0.4 (0.0) million recognised in the fleet. Sales for July-September were EUR 8.4 (9.7) million. EBITA was EUR -0.8 (-1.6) million, or -9.9 (-16.1) per cent of sales. The third-quarter result nevertheless showed a marked improvement compared with the previous quarters as planned. Construction activity was low in Denmark in the first half of the year. Thanks to adjustment measures, Cramo has nevertheless succeeded in slightly increasing its utilisation rates, and the price competition is subsiding slightly. The outlook for the rest of the year and the outlook for 2011 in particular is more positive than previously. Increasing profitability to a satisfactory level will be Cramo's key objective in Denmark in 2010. In Denmark, too, Cramo aims to be the “best in town” in selected areas. This may also require structural changes. In its June forecast, Euroconstruct predicted that the Danish construction market will decline by approximately three per cent during the year. Euroconstruct predicts a growth rate of some four per cent for 2011. The equipment rental market is also expected to decline in the current year and an upturn on the annual level is not expected until 2011. In addition to profitability improvement, Cramo's long-term targets for 2010-2013 include expanding the operations to cover the entire offering of the Group. The Group will seek growth in the modular spaces business in particular. Central and Eastern Europe -------------------------------------------------------------------------------- | Central and | 7-9/1 | 7-9/0 | Change | 1-9/10 | 1-9/09 | Change | 1-12/0 | | Eastern Europe | 0 | 9 | % | | | % | 9 | | (EUR 1,000) | | | | | | | | -------------------------------------------------------------------------------- | Sales | 14,36 | 11,97 | 19.9 % | 34,073 | 32,787 | 3.9 % | 44,119 | | | 1 | 9 | | | | | | -------------------------------------------------------------------------------- | EBITA | -1,48 | -3,00 | 50.5 % | -10,37 | -12,44 | 16.6 % | -17,63 | | | 8 | 8 | | 4 | 0 | | 1 | -------------------------------------------------------------------------------- | EBITA-% | -10.4 | -25.1 | | -30.4 | -37.9 | | -40.0 | | | % | % | | % | % | | % | -------------------------------------------------------------------------------- | No of employees | | | | 518 | 602 | -13.9 | 533 | | (FTE) | | | | | | % | | -------------------------------------------------------------------------------- | No of depots | | | | 65 | 69 | -5.8 % | 67 | -------------------------------------------------------------------------------- Cramo Group's equipment rental business sales in Central and Eastern Europe come from Estonia, Latvia, Lithuania, Poland, the Czech Republic, Slovakia and Russia. Cramo estimates that in terms of market position, it is the second largest operator in Russia and the largest operator in many cities. Cramo further estimates that it is the market leader in the Baltic countries, the second largest operator in Poland, the third largest in the Czech Republic and the fourth largest in Slovakia. At the end of the period, the number of depots in Central and Eastern Europe was 65 (69). Rental business sales in Central and Eastern Europe amounted to EUR 34.1 (32.8) million in January-September, for an increase of 3.9 per cent. In local currencies, the change in sales was -1.6 per cent. EBITA was EUR -10.4 (-12.4) million, or -30.4 (-37.9) per cent of sales. The result for the period includes reorganisation expenses of EUR 0.8 (0.8) million and credit losses and credit loss provisions of EUR 1.4 (2.3) million. Sales for July-September were EUR 14.4 (12.0) million. Sales showed a strong upturn of 19.9 per cent. In local currencies, the change in sales was 15.1 per cent. EBITA was EUR -1.5 (-3.0) million. While fleet utilisation rates improved to a good level in almost all of the Central and East European countries, the impact of price increases is not yet visible in the financial result. The result for July-September includes credit losses and credit loss provisions of EUR 0.4 (1.0) million. Growth was particularly strong in Russia (49.1 per cent) in January-September. Third-quarter sales improved markedly in the Central and East European countries. In addition to Russia, strong growth was achieved in Poland (20.8 per cent) and the Baltic countries (9.7 per cent) in the third quarter. In the Russian construction market, recovery has started in affordable housing production, in the industrial sector and in civil engineering. Cramo strengthened its market position in the Moscow region in the first half of the year. Business development has also been favourable in the Kaluga and Kaliningrad regions. In Poland, civil engineering maintained construction growth in the first half of the year, but in the third quarter growth expanded to residential construction. In the Baltic countries, the sharp drop in construction activity is levelling off, especially in Estonia. Construction projects currently consist of public-sector civil engineering projects and private-sector renovation projects. Cramo has successfully increased its rental operations in the Baltic countries, where price competition is also levelling off. The market situation in the Czech Republic and Slovakia is also growing less tight. Cramo's key targets for 2010 are improving profitability and utilising opportunities for growth, in Poland and Russia in particular. According to the estimate published by Euroconstruct in June 2010, construction will decrease in Estonia by 13 per cent in 2010, by 17 per cent in Latvia and by 18 per cent in Lithuania. In Russia, an upswing in construction is considered possible already in 2010. Residential construction accounts for a significant share of the Russian construction market, and government measures in the field of social residential construction are a major factor. In Poland, the expected level of growth in construction continues to be about 10 per cent. In the Czech Republic, construction is expected to decrease by some seven per cent in the current year, while the Slovakian construction market is expected to see an upturn of some five per cent. According to the forecasts for 2011, the rate of construction growth predicted for Poland is almost 15 per cent, in Estonia, seven per cent, in the Czech Republic, two per cent and in Slovakia, 11 per cent. Growth is also expected in the Russian construction market. In Latvia and Lithuania, construction market activity is expected to remain at the level of 2010 or even decline slightly. Cramo's strategic target in Central and Eastern Europe is to be the best rental services provider on the local level in each market and to grow profitably faster than the market. Cramo is currently preparing a new growth strategy for the Russian market. Cramo also intends to decrease its dependence on the construction industry, which accounted for 86 per cent of the Group's net sales in Central and Eastern Europe, compared with approximately 50 per cent in Cramo's other market segments. SHARES AND SHARE CAPITAL On 30 September 2010, Cramo Plc's share capital was EUR 24,834,753.09 and the number of shares was 30,660,189, including Cramo Management Oy's holding of 316,288 shares. There were no changes in the share capital or the number of shares during the period under review. On 30 September 2010, the Board of Directors of Cramo Plc resolved to apply for listing of stock option rights 2006B of Cramo Plc Stock Options 2006 program on NASDAQ OMX Helsinki to commence on 1 October 2010. The total number of stock options 2006B issued is 1,000,000. There are currently 60 key employees holding a total of 753,000 of these stock options. A wholly-owned subsidiary of Cramo Plc currently holds 247,000 stock options 2006B which will not be used for share subscription. Each stock option 2006B entitles its holder to subscribe for one Cramo Plc share at a subscription price of EUR 25.62. The share subscription period is from 1 October 2010 to 31 January 2012. The shares possibly subscribed for with the stock options 2006B will account for a maximum of 2.4% of the number and voting rights of Cramo Plc's shares and voting rights after registering of the new shares. CUrrent option PROGRAMMES and incentive schemes Based on the 2006A option scheme, Cramo has issued a total of 1,000,000 stock options. At the end of the period under review, 306,000 of these options were held by a wholly-owned subsidiary of Cramo Plc. These options will not be used for share subscription. Each stock option outstanding entitles its holder to subscribe for one new share in the company. The share subscription period is 1 October 2009 to 31 January 2011. The planned schedule for listing the shares subscribed for under the 2006 option scheme on the NASDAQ OMX Helsinki is as follows: - Share subscription by 31 December 2010 - listing on 14 January 2011 - Share subscription by 31 January 2011 - listing on 11 February 2011 On 30 September 2010, Cramo Group's key personnel held a total of 694,000 stock options 2006A, 753.000 stock options 2006B, 882,500 stock options 2006C and 900,000 stock options 2009. Cramo Management Oy, owned by the members of the Executive Committee, holds 316,288 shares in the company. The transfer of these shares is restricted during the validity of the arrangement, expiring in autumn 2012. CHANGES IN SHAREHOLDINGS There were no changes in shareholdings in excess of the flagging threshold during the period under review. 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 balance sheet date, Cramo has acquired a significant portion of the rental business of the Finnish company Lambertsson Oy and signed a five-year rental equipment contract with Peab Finland. At the same time, Cramo sold its heavy equipment driving and operating services business to Peab and renewed the equipment rental contract with Peab for the next five years. The sold business comprises rental-related driving and operating services which have generated sales of some 15 million on an annual level. While the acquired business is clearly smaller than the sold business operation in terms of sales, the arrangements are not expected to have a significant effect on Cramo's profit. 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 2009. As of 1 January 2010, the Group applies the revised IFRS 3 standard (“Business Combinations”) and IAS 27 standard (“Consolidated and Separate Financial Statements”) as well as other changes in other standards attributable to these amendments. The above-mentioned changes in standards have not had a significant impact on the first-quarter balance sheet, income statement and notes to the Interim Report. -------------------------------------------------------------------------------- | CONSOLIDATED BALANCE SHEET (EUR | 30 Sep | 30 Sep | 31 Dec | | | 1,000) | 2010 | 2009 | 2009 | | -------------------------------------------------------------------------------- | ASSETS | | | | | -------------------------------------------------------------------------------- | Non-current assets | | | | | -------------------------------------------------------------------------------- | Tangible assets | 505,976 | 548,442 | 522,191 | | -------------------------------------------------------------------------------- | Goodwill | 146,740 | 154,487 | 137,339 | | -------------------------------------------------------------------------------- | Other intangible assets | 91,881 | 97,610 | 90,843 | | -------------------------------------------------------------------------------- | Deferred tax assets | 14,904 | 18,667 | 19,137 | | -------------------------------------------------------------------------------- | Available-for-sale financial | 344 | 340 | 340 | | | investments | | | | | -------------------------------------------------------------------------------- | Derivative financial instruments | | 369 | 238 | | -------------------------------------------------------------------------------- | Trade and other receivables | 2,954 | 2,880 | 4,990 | | -------------------------------------------------------------------------------- | Total non-current assets | 762,800 | 822,797 | 775,079 | | -------------------------------------------------------------------------------- | Current assets | | | | | -------------------------------------------------------------------------------- | Inventories | 15,786 | 13,435 | 11,591 | | -------------------------------------------------------------------------------- | Trade and other receivables | 122,402 | 105,970 | 99,526 | | -------------------------------------------------------------------------------- | Income tax receivables | 11,063 | 9,527 | 6,599 | | -------------------------------------------------------------------------------- | Derivative financial instruments | 1,054 | 759 | 898 | | -------------------------------------------------------------------------------- | Cash and cash equivalents | 14,541 | 16,152 | 18,520 | | -------------------------------------------------------------------------------- | Total current assets | 164,846 | 145,843 | 137,134 | | -------------------------------------------------------------------------------- | Assets available for sale | 2,838 | 5,951 | 6,148 | | -------------------------------------------------------------------------------- | TOTAL ASSETS | 930,484 | 974,591 | 918,360 | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | EQUITY AND LIABILITIES | | | | | -------------------------------------------------------------------------------- | Equity | | | | | -------------------------------------------------------------------------------- | Share capital | 24,835 | 24,835 | 24,835 | | -------------------------------------------------------------------------------- | Share premium fund | 186,926 | 186,910 | 186,910 | | -------------------------------------------------------------------------------- | Fair value reserve | 117 | 117 | 117 | | -------------------------------------------------------------------------------- | Hedging fund | -2,571 | -2,422 | -2,296 | | -------------------------------------------------------------------------------- | Translation differences | 583 | -17,301 | -12,431 | | -------------------------------------------------------------------------------- | Retained earnings | 94,567 | 122,649 | 91,117 | | -------------------------------------------------------------------------------- | Equity attributable to shareholders | 304,456 | 314,788 | 288,252 | | | of the parent company | | | | | -------------------------------------------------------------------------------- | Non-controlling interest | 503 | 503 | 503 | | -------------------------------------------------------------------------------- | Hybrid capital | 49,630 | 49,630 | 49,630 | | -------------------------------------------------------------------------------- | Total equity | 354,589 | 364,921 | 338,385 | | -------------------------------------------------------------------------------- | Non-current liabilities | | | | | -------------------------------------------------------------------------------- | Interest-bearing liabilities | 324,568 | 295,174 | 351,606 | | -------------------------------------------------------------------------------- | Derivative financial instruments | 5,284 | 4,315 | 3,809 | | -------------------------------------------------------------------------------- | Deferred tax liabilities | 76,435 | 78,263 | 79,036 | | -------------------------------------------------------------------------------- | Provisions | | 107 | | | -------------------------------------------------------------------------------- | Other non-current liabilities | 1,729 | 6,465 | 6,816 | | -------------------------------------------------------------------------------- | Total non-current liabilities | 408,016 | 384,324 | 441,267 | | -------------------------------------------------------------------------------- | Current liabilities | | | | | -------------------------------------------------------------------------------- | Interest-bearing liabilities | 71,024 | 133,642 | 50,596 | | -------------------------------------------------------------------------------- | Derivative financial instruments | 1,146 | 2,286 | 680 | | -------------------------------------------------------------------------------- | Trade and other payables | 90,611 | 81,361 | 82,855 | | -------------------------------------------------------------------------------- | Income tax liabilities | 5,098 | 8,057 | 4,576 | | -------------------------------------------------------------------------------- | Total current liabilities | 167,879 | 225,346 | 138,707 | | -------------------------------------------------------------------------------- | Total liabilities | 575,895 | 609,670 | 579,975 | | -------------------------------------------------------------------------------- | TOTAL EQUITY AND LIABILITIES | 930,484 | 974,591 | 918,360 | | -------------------------------------------------------------------------------- | CONSOLIDATED INCOME | 7-9/1 | 7-9/09 | 1-9/10 | 1-9/09 | 1-12/09 | | STATEMENT | 0 | | | | | | 1 Jan 2010 - 30 Sep | | | | | | | 2010 (EUR 1,000) | | | | | | -------------------------------------------------------------------------------- | Sales | 130,3 | 115,089 | 345,719 | 331,274 | 446,676 | | | 56 | | | | | -------------------------------------------------------------------------------- | Other operating income | 1,432 | 1,046 | 10,856 | 3,140 | 7,262 | -------------------------------------------------------------------------------- | Change in inventories | 1,156 | 482 | 1,875 | -34 | -1,486 | | of finished goods and | | | | | | | work in progress | | | | | | -------------------------------------------------------------------------------- | Production for own use | 1,811 | 2,330 | 2,575 | 7,539 | 9,148 | -------------------------------------------------------------------------------- | Materials and services | -48,3 | -37,528 | -124,507 | -106,876 | -150,882 | | | 43 | | | | | -------------------------------------------------------------------------------- | Employee benefit | -23,9 | -25,501 | -73,585 | -79,231 | -103,062 | | expense | 53 | | | | | -------------------------------------------------------------------------------- | Other operating | -25,9 | -24,832 | -79,044 | -74,874 | -101,700 | | expenses | 98 | | | | | -------------------------------------------------------------------------------- | Depreciation and | -21,3 | -21,510 | -63,467 | -65,039 | -88,669 | | impairment on tangible | 08 | | | | | | assets and assets | | | | | | | available for sale | | | | | | -------------------------------------------------------------------------------- | EBITA | 15,15 | 9,577 | 20,422 | 15,899 | 17,286 | | | 3 | | | | | -------------------------------------------------------------------------------- | % of sales | 11.6 | 8.3 % | 5.9 % | 4.8 % | 3.9 % | | | % | | | | | -------------------------------------------------------------------------------- | Amortisation and | -1,83 | -1,738 | -5,144 | -5,100 | -28,754 | | impairment on | 8 | | | | | | intangible assets | | | | | | | resulting from | | | | | | | acquisitions | | | | | | -------------------------------------------------------------------------------- | Operating profit / loss | 13,31 | 7,838 | 15,278 | 10,799 | -11,467 | | (EBIT) | 5 | | | | | -------------------------------------------------------------------------------- | % of sales | 10.2 | 6.8 % | 4.4 % | 3.3 % | -2.6 % | | | % | | | | | -------------------------------------------------------------------------------- | Finance costs (net) | -6,13 | -5,787 | -18,842 | -17,507 | -22,734 | | | 0 | | | | | -------------------------------------------------------------------------------- | Profit / loss before | 7,186 | 2,051 | -3,564 | -6,708 | -34,202 | | taxes | | | | | | -------------------------------------------------------------------------------- | % of sales | 5.5 % | 1.8 % | -1.0 % | -2.0 % | -7.7 % | -------------------------------------------------------------------------------- | Income taxes | -5,39 | -3,049 | -7,002 | -5,665 | -5,657 | | | 9 | | | | | -------------------------------------------------------------------------------- | Profit / loss for the | 1,786 | -998 | -10,567 | -12,373 | -39,858 | | period | | | | | | -------------------------------------------------------------------------------- | % of sales | 1.4 % | -0.9 % | -3.1 % | -3.7 % | -8.9 % | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Attributable to: | | | | | | -------------------------------------------------------------------------------- | Equity holder of parent | 1,800 | -986 | -10,521 | -12,360 | -39,831 | -------------------------------------------------------------------------------- | Non-controlling | -15 | -12 | -46 | -13 | -27 | | interest | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Profit / loss | | | | | | | attributable to equity | | | | | | | holders' of parent | | | | | | -------------------------------------------------------------------------------- | Earnings per share, | 0.06 | -0.03 | -0.35 | -0.40 | -1.30 | | undiluted, EUR | | | | | | -------------------------------------------------------------------------------- | Earnings per share, | 0.06 | -0.03 | -0.34 | -0.40 | -1.28 | | diluted, EUR | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | COMPREHENSIVE INCOME | 7-9/1 | 7-9/09 | 1-9/10 | 1-9/09 | 1-12/09 | | STATEMENT | 0 | | | | | | 1 Jan 2010 - 30 Sep | | | | | | | 2010 (EUR 1,000) | | | | | | -------------------------------------------------------------------------------- | Profit / loss for the | 1,786 | -998 | -10,567 | -12,373 | -39,858 | | period | | | | | | -------------------------------------------------------------------------------- | Other comprenhesive | | | | | | | income | | | | | | -------------------------------------------------------------------------------- | -Change in hedging | 202 | -214 | -275 | -1,049 | -923 | | fund, net of tax | | | | | | -------------------------------------------------------------------------------- | -Change in exchange | 10,08 | 14,111 | 29,761 | 15,576 | 15,915 | | rate differences, net | 3 | | | | | | of tax | | | | | | -------------------------------------------------------------------------------- | Total other | 10,28 | 13,897 | 29,486 | 14,527 | 14,992 | | comprehensive income | 5 | | | | | -------------------------------------------------------------------------------- | Comprehensive income | 12,07 | 12,899 | 18,919 | 2,154 | -24,866 | | for the period | 1 | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | CHANGES IN | Sha | Othe | Fair | Retaine | Attribu | Non-co | Hybr | Tota | | CONSOLIDATED | re | r | valu | d | table | ntroll | id | l | | STATEMENT OF | cap | rese | e | earning | to | ing | capi | equi | | EQUITY (EUR | ita | rves | rese | s, | equity | intere | tal | ty | | 1,000) | l | | rve | transla | holders | st | | | | | | | | tion | of the | | | | | | | | | differe | parent | | | | | | | | | nces, | company | | | | | | | | | hedging | | | | | | | | | | fund | | | | | -------------------------------------------------------------------------------- | At 1 Jan 2009 | 24, | 186, | 117 | 107,614 | 319,476 | | | 319, | | | 835 | 910 | | | | | | 476 | -------------------------------------------------------------------------------- | Total comprehensive | | | 2,154 | 2,154 | | | 2,15 | | income | | | | | | | 4 | -------------------------------------------------------------------------------- | Dividend | | | | -6,132 | -6,132 | | | -6,1 | | distribution | | | | | | | | 32 | -------------------------------------------------------------------------------- | Share-based | | | | 1,770 | 1,770 | | | 1,77 | | payments | | | | | | | | 0 | -------------------------------------------------------------------------------- | Non-controlli | | | | -2,480 | -2,480 | 503 | | -1,9 | | ng interest | | | | | | | | 77 | -------------------------------------------------------------------------------- | Hybrid | | | | | | | 49,6 | 49,6 | | capital | | | | | | | 30 | 30 | -------------------------------------------------------------------------------- | At 30 Sep | 24, | 186, | 117 | 102,926 | 314,788 | 503 | 49,6 | 364, | | 2009 | 835 | 910 | | | | | 30 | 921 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | At 1 Jan 2010 | 24, | 186, | 117 | 76,390 | 288,252 | 503 | 49,6 | 338, | | | 835 | 910 | | | | | 30 | 385 | -------------------------------------------------------------------------------- | Total comprehensive | | | 18,919 | 18,919 | | | 18,9 | | income | | | | | | | 19 | -------------------------------------------------------------------------------- | Dividend | | | | | | | | | | distribution | | | | | | | | | -------------------------------------------------------------------------------- | Share-based | | | | 1,725 | 1,725 | | | 1,72 | | payments | | | | | | | | 5 | -------------------------------------------------------------------------------- | Hybrid | | | | -4,440 | -4,440 | | | -4,4 | | capital | | | | | | | | 40 | -------------------------------------------------------------------------------- | Changes | | 16 | | -16 | | | | | | within equity | | | | | | | | | -------------------------------------------------------------------------------- | At 30 Sep | 24, | 186, | 117 | 92,579 | 304,456 | 503 | 49,6 | 354, | | 2010 | 835 | 926 | | | | | 30 | 589 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | CONSOLIDATED CASH FLOW STATEMENT | 1-9/10 | 1-9/09 | 1-12/09 | | 1 Jan 2010 - 30 Sep 2010 (EUR 1,000) | | | | -------------------------------------------------------------------------------- | Net cash flow from operating activities | 29,501 | 49,903 | 76,565 | -------------------------------------------------------------------------------- | Net cash flow from investing activities | -2,769 | -14,629 | -11,162 | -------------------------------------------------------------------------------- | Cash flow from financing activities | | | | -------------------------------------------------------------------------------- | Change in interest-bearing receivables | 100 | 92 | 94 | -------------------------------------------------------------------------------- | Change in finance lease liabilities | -28,552 | -17,153 | -25,806 | -------------------------------------------------------------------------------- | Change in interest-bearing liabilities | 3,389 | -51,423 | -69,209 | -------------------------------------------------------------------------------- | Hybrid capital | -6,000 | 49,500 | 49,500 | -------------------------------------------------------------------------------- | Acquisition of own shares | | -500 | -2,480 | -------------------------------------------------------------------------------- | Related party investments | | | 503 | -------------------------------------------------------------------------------- | Dividends paid | | -6,132 | -6,132 | -------------------------------------------------------------------------------- | Net cash flow from financing activities | -31,062 | -25,616 | -53,530 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Change in cash and cash equivalents | -4,330 | 9,658 | 11,873 | -------------------------------------------------------------------------------- | Cash and cash equivalents at period start | 18,520 | 8,123 | 8,123 | -------------------------------------------------------------------------------- | Translation differences | 351 | -1,629 | -1,476 | -------------------------------------------------------------------------------- | Cash and cash equivalents at period end | 14,541 | 16,152 | 18,520 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | COMMITMENTS AND CONTINGENT LIABILITIES | 30 Sep | 30 Sep | 31 Dec | | | 2010 | 2009 | 2009 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | On own behalf | | | | -------------------------------------------------------------------------------- | Mortgages on company assets | 83,317 | 83,317 | 83,317 | -------------------------------------------------------------------------------- | Pledges | 177,487 | 169,424 | 169,424 | -------------------------------------------------------------------------------- | Pledges, finance lease | 148,509 | 176,446 | 156,018 | -------------------------------------------------------------------------------- | Interest on hybrid capital | 2,532 | 2,532 | 4,044 | -------------------------------------------------------------------------------- | Investment commitments | 5,765 | 259 | 93 | -------------------------------------------------------------------------------- | Commitments to office and depot rents | 83,994 | 84,218 | 83,401 | -------------------------------------------------------------------------------- | Operational lease payments | 39,324 | 48,891 | 40,226 | -------------------------------------------------------------------------------- | Other commitments | 1,318 | 425 | 355 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | DERIVATIVE FINANCIAL INSTRUMENTS | 30 Sep | 30 Sep | 31 Dec | | (EUR 1,000) | 2010 | 2009 | 2009 | -------------------------------------------------------------------------------- | Fair value | | | | -------------------------------------------------------------------------------- | Interest rate swaps | -5,331 | -4,067 | -3,622 | -------------------------------------------------------------------------------- | Currency forwards | -66 | -1,472 | 263 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Nominal value | | | | -------------------------------------------------------------------------------- | Interest rate swaps | 190,154 | 152,667 | 144,178 | -------------------------------------------------------------------------------- | Currency forwards | 119,425 | 125,926 | 129,588 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | MODULAR SPACE ORDER BOOK (EUR 1,000) | 30 Sep | 30 Sep | 31 Dec | | | 2010 | 2009 | 2009 | -------------------------------------------------------------------------------- | Value of outstanding orders for modular | 88,743 | 96,321 | 102,773 | | space | | | | -------------------------------------------------------------------------------- | Value of orders for modular space rental | 81,501 | 93,594 | 101,285 | -------------------------------------------------------------------------------- | Value of orders for sale of modular space | 7,242 | 2,727 | 1,488 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | SHARE RELATED KEY FIGURES | 7-9/10 | 7-9/09 | 1-9/10 | 1-9/09 | 1-12/09 | -------------------------------------------------------------------------------- | Earnings per share (EPS), EUR | 0.06 | -0.03 | -0.35 | -0.40 | -1.30 | | 1) | | | | | | -------------------------------------------------------------------------------- | Earnings per share (EPS), | 0.06 | -0.03 | -0.34 | -0.40 | -1.28 | | diluted, EUR 2) | | | | | | -------------------------------------------------------------------------------- | Shareholders' equity per | | | 10.03 | 10.37 | 9.50 | | share, EUR 3) | | | | | | -------------------------------------------------------------------------------- | Number of shares, end of | | | 30,660 | 30,660 | 30,660, | | period | | | ,189 | ,189 | 189 | -------------------------------------------------------------------------------- | Number of shares, | | | 30,343 | 30,582 | 30,522, | | issue-adjusted, average 4) | | | ,901 | ,732 | 534 | -------------------------------------------------------------------------------- | Number of shares, | | | 30,343 | 30,343 | 30,343, | | issue-adjusted, end of period | | | ,901 | ,901 | 901 | | 4) | | | | | | -------------------------------------------------------------------------------- | Number of shares, diluted by | | | 31,088 | 31,085 | 31,121, | | share options, average | | | ,238 | ,053 | 644 | -------------------------------------------------------------------------------- 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 INFORMATION PRESENTED BY BUSINESS SEGMENT The Group's segments are divided geographically and consist of Finland, Sweden, Norway, Denmark and Central and Eastern Europe. -------------------------------------------------------------------------------- | Sales by segment (EUR | 7-9/10 | 7-9/09 | 1-9/10 | 1-9/09 | 1-12/09 | | 1,000) | | | | | | -------------------------------------------------------------------------------- | Finland | 27,430 | 23,834 | 69,181 | 69,686 | 92,067 | -------------------------------------------------------------------------------- | Sweden | 64,839 | 55,296 | 177,337 | 158,302 | 215,675 | -------------------------------------------------------------------------------- | Norway | 17,023 | 15,615 | 49,453 | 47,108 | 63,427 | -------------------------------------------------------------------------------- | Denmark | 8,395 | 9,747 | 20,863 | 27,028 | 36,303 | -------------------------------------------------------------------------------- | Central and Eastern | 14,361 | 11,979 | 34,073 | 32,787 | 44,119 | | Europe | | | | | | -------------------------------------------------------------------------------- | Inter-segment sales | -1,693 | -1,382 | -5,187 | -3,637 | -4,915 | -------------------------------------------------------------------------------- | Group sales | 130,356 | 115,089 | 345,719 | 331,274 | 446,676 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | EBITA by segment (EUR | 7-9/10 | 7-9/09 | 1-9/10 | 1-9/09 | 1-12/09 | | 1,000) | | | | | | -------------------------------------------------------------------------------- | Finland | 6,105 | 4,291 | 9,201 | 7,052 | 10,704 | -------------------------------------------------------------------------------- | % of sales | 22.3 % | 18.0 % | 13.3 % | 10.1 % | 11.6 % | -------------------------------------------------------------------------------- | Sweden | 12,332 | 11,084 | 26,586 | 28,197 | 36,026 | -------------------------------------------------------------------------------- | % of sales | 19.0 % | 20.0 % | 15.0 % | 17.8 % | 16.7 % | -------------------------------------------------------------------------------- | Norway | 310 | 853 | -96 | 3,124 | 3,995 | -------------------------------------------------------------------------------- | % of sales | 1.8 % | 5.5 % | -0.2 % | 6.6 % | 6.3 % | -------------------------------------------------------------------------------- | Denmark | -831 | -1,571 | -5,322 | -4,471 | -8,860 | -------------------------------------------------------------------------------- | % of sales | -9.9 % | -16.1 % | -25.5 % | -16.5 % | -24.4 % | -------------------------------------------------------------------------------- | Central and Eastern | -1,488 | -3,008 | -10,374 | -12,440 | -17,631 | | Europe | | | | | | -------------------------------------------------------------------------------- | % of sales | -10.4 % | -25.1 % | -30.4 % | -37.9 % | -40.0 % | -------------------------------------------------------------------------------- | Non-allocated capital | | | 5,746 | | 1,031 | | gains and other income | | | | | | -------------------------------------------------------------------------------- | Non-allocated Group | -1,304 | -2,052 | -5,308 | -5,579 | -8,013 | | activities | | | | | | -------------------------------------------------------------------------------- | Eliminations | 29 | -21 | -10 | 17 | 34 | -------------------------------------------------------------------------------- | Group EBITA | 15,153 | 9,577 | 20,422 | 15,899 | 17,286 | -------------------------------------------------------------------------------- | % of sales | 11.6 % | 8.3 % | 5.9 % | 4.8 % | 3.9 % | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Depreciation by segment | 7-9/10 | 7-9/09 | 1-9/10 | 1-9/09 | 1-12/09 | | (EUR 1,000) | | | | | | -------------------------------------------------------------------------------- | Finland | -3,712 | -4,245 | -11,128 | -12,540 | -16,678 | -------------------------------------------------------------------------------- | Sweden | -8,439 | -7,732 | -24,003 | -22,858 | -30,573 | -------------------------------------------------------------------------------- | Norway | -2,404 | -2,350 | -7,333 | -6,979 | -9,391 | -------------------------------------------------------------------------------- | Denmark | -1,378 | -1,596 | -4,686 | -5,272 | -8,071 | -------------------------------------------------------------------------------- | Central and Eastern | -5,388 | -5,558 | -16,314 | -17,290 | -23,843 | | Europe | | | | | | -------------------------------------------------------------------------------- | Non-allocated items and | 13 | -30 | -3 | -101 | -111 | | eliminations | | | | | | -------------------------------------------------------------------------------- | Total | -21,308 | -21,510 | -63,467 | -65,039 | -88,669 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Reconciliation of Group | 7-9/10 | 7-9/09 | 1-9/10 | 1-9/09 | 1-12/09 | | EBITA to earnings before | | | | | | | taxes (EUR 1,000) | | | | | | -------------------------------------------------------------------------------- | Group EBITA | 15,153 | 9,577 | 20,422 | 15,899 | 17,286 | -------------------------------------------------------------------------------- | Amortisation and | -1,838 | -1,738 | -5,144 | -5,100 | -28,754 | | impairment on intangible | | | | | | | assets resulting from | | | | | | | acquisitions | | | | | | -------------------------------------------------------------------------------- | Net finance items | -6,130 | -5,787 | -18,842 | -17,507 | -22,734 | -------------------------------------------------------------------------------- | Earnings before taxes | 7,186 | 2,051 | -3,564 | -6,708 | -34,202 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Capital expenditure by | 7-9/10 | 7-9/09 | 1-9/10 | 1-9/09 | 1-12/09 | | segment (EUR 1,000) | | | | | | -------------------------------------------------------------------------------- | Finland | 2,353 | 2,880 | 8,126 | 8,427 | 10,406 | -------------------------------------------------------------------------------- | Sweden | 6,315 | 1,407 | 18,048 | 5,700 | 8,874 | -------------------------------------------------------------------------------- | Norway | 3,523 | 718 | 4,788 | 6,501 | 7,782 | -------------------------------------------------------------------------------- | Denmark | | 78 | 11 | 288 | 288 | -------------------------------------------------------------------------------- | Central and Eastern | 657 | 366 | 1,355 | 2,467 | 2,589 | | Europe | | | | | | -------------------------------------------------------------------------------- | Non-allocated items and | 184 | 313 | 876 | 1,935 | 1,992 | | eliminations | | | | | | -------------------------------------------------------------------------------- | Total | 13,032 | 5,762 | 33,204 | 25,318 | 31,931 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Assets by segment (EUR 1,000) | 30 Sep | 30 Sep 2009 | 31 Dec 2009 | | | 2010 | | | -------------------------------------------------------------------------------- | Finland | 141,362 | 158,805 | 151,593 | -------------------------------------------------------------------------------- | Sweden | 444,005 | 405,467 | 398,148 | -------------------------------------------------------------------------------- | Norway | 97,255 | 94,877 | 94,512 | -------------------------------------------------------------------------------- | Denmark | 50,313 | 65,298 | 58,882 | -------------------------------------------------------------------------------- | Central and Eastern Europe | 149,135 | 196,133 | 161,294 | -------------------------------------------------------------------------------- | Non-allocated items and | 48,412 | 54,011 | 53,931 | | eliminations | | | | -------------------------------------------------------------------------------- | Total | 930,484 | 974,591 | 918,360 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Liabilities by segment (EUR 1,000) | 30 Sep | 30 Sep 2009 | 31 Dec 2009 | | | 2010 | | | -------------------------------------------------------------------------------- | Finland | 31,670 | 45,724 | 44,291 | -------------------------------------------------------------------------------- | Sweden | 157,116 | 150,590 | 148,230 | -------------------------------------------------------------------------------- | Norway | 35,021 | 36,736 | 37,019 | -------------------------------------------------------------------------------- | Denmark | 10,001 | 16,275 | 15,679 | -------------------------------------------------------------------------------- | Central and Eastern Europe | 45,596 | 58,413 | 54,047 | -------------------------------------------------------------------------------- | Non-allocated items and | 296,491 | 301,932 | 280,708 | | eliminations | | | | -------------------------------------------------------------------------------- | Total | 575,895 | 609,670 | 579,975 | -------------------------------------------------------------------------------- QUARTERLY SEGMENT INFORMATION -------------------------------------------------------------------------------- | Sales by segment | 7-9/ | 4-6/1 | 1-3/1 | 10-12 | 7-9/0 | 4-6/0 | 1-3/09 | | (EUR 1,000) | 10 | 0 | 0 | /09 | 9 | 9 | | -------------------------------------------------------------------------------- | Finland | 27,4 | 22,69 | 19,05 | 22,38 | 23,83 | 22,58 | 23,272 | | | 30 | 4 | 6 | 1 | 4 | 0 | | -------------------------------------------------------------------------------- | Sweden | 64,8 | 60,60 | 51,89 | 57,37 | 55,29 | 52,95 | 50,054 | | | 39 | 2 | 5 | 3 | 6 | 2 | | -------------------------------------------------------------------------------- | Norway | 17,0 | 15,33 | 17,09 | 16,31 | 15,61 | 15,74 | 15,751 | | | 23 | 2 | 7 | 9 | 5 | 2 | | -------------------------------------------------------------------------------- | Denmark | 8,39 | 6,728 | 5,740 | 9,275 | 9,747 | 8,750 | 8,531 | | | 5 | | | | | | | -------------------------------------------------------------------------------- | Central and Eastern | 14,3 | 10,69 | 9,014 | 11,33 | 11,97 | 10,44 | 10,363 | | Europe | 61 | 8 | | 2 | 9 | 5 | | -------------------------------------------------------------------------------- | Inter-segment sales | -1,6 | -2,09 | -1,40 | -1,27 | -1,38 | -1,15 | -1,105 | | | 93 | 2 | 3 | 8 | 2 | 0 | | -------------------------------------------------------------------------------- | Group sales | 130, | 113,9 | 101,4 | 115,4 | 115,0 | 109,3 | 106,86 | | | 356 | 64 | 00 | 02 | 89 | 19 | 6 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | EBITA by segment | 7-9/ | 4-6/1 | 1-3/1 | 10-12 | 7-9/0 | 4-6/0 | 1-3/09 | | (EUR 1,000) | 10 | 0 | 0 | /09 | 9 | 9 | | -------------------------------------------------------------------------------- | Finland | 6,10 | 2,546 | 550 | 3,652 | 4,291 | 1,829 | 932 | | | 5 | | | | | | | -------------------------------------------------------------------------------- | % of sales | 22.3 | 11.2 | 2.9 % | 16.3 | 18.0 | 8.1 % | 4.0 % | | | % | % | | % | % | | | -------------------------------------------------------------------------------- | Sweden | 12,3 | 8,835 | 5,418 | 7,830 | 11,08 | 9,810 | 7,303 | | | 32 | | | | 4 | | | -------------------------------------------------------------------------------- | % of sales | 19.0 | 14.6 | 10.4 | 13.6 | 20.0 | 18.5 | 14.6 % | | | % | % | % | % | % | % | | -------------------------------------------------------------------------------- | Norway | 310 | -303 | -103 | 871 | 853 | 1,079 | 1,191 | -------------------------------------------------------------------------------- | % of sales | 1.8 | -2.0 | -0.6 | 5.3 % | 5.5 % | 6.9 % | 7.6 % | | | % | % | % | | | | | -------------------------------------------------------------------------------- | Denmark | -831 | -1,26 | -3,22 | -4,38 | -1,57 | -1,15 | -1,746 | | | | 8 | 4 | 9 | 1 | 4 | | -------------------------------------------------------------------------------- | % of sales | -9.9 | -18.8 | -56.2 | -47.3 | -16.1 | -13.2 | -20.5 | | | % | % | % | % | % | % | % | -------------------------------------------------------------------------------- | Central and Eastern | -1,4 | -4,04 | -4,83 | -5,19 | -3,00 | -4,51 | -4,915 | | Europe | 88 | 7 | 9 | 2 | 8 | 7 | | -------------------------------------------------------------------------------- | % of sales | -10. | -37.8 | -53.7 | -45.8 | -25.1 | -43.2 | -47.4 | | | 4 % | % | % | % | % | % | % | -------------------------------------------------------------------------------- | Non-allocated | 0 | 0 | 5,746 | 1,031 | 0 | 0 | 0 | | capital gains and | | | | | | | | | other income | | | | | | | | -------------------------------------------------------------------------------- | Non-allocated Group | -1,3 | -1,93 | -2,07 | -2,43 | -2,05 | -2,15 | -1,370 | | activities | 04 | 1 | 3 | 3 | 2 | 7 | | -------------------------------------------------------------------------------- | Eliminations | 29 | -66 | 27 | 17 | -21 | -52 | 90 | -------------------------------------------------------------------------------- | Group EBITA | 15,1 | 3,766 | 1,503 | 1,387 | 9,577 | 4,838 | 1,485 | | | 53 | | | | | | | -------------------------------------------------------------------------------- | % of sales | 11.6 | 3.3 % | 1.5 % | 1.2 % | 8.3 % | 4.4 % | 1.4 % | | | % | | | | | | | -------------------------------------------------------------------------------- LARGEST SHAREHOLDERS -------------------------------------------------------------------------------- | TEN LARGEST SHAREHOLDERS 30 Sep 2010 | SHARES | % | -------------------------------------------------------------------------------- | 1 | Hartwall Capital Oy Ab | 4,993,619 | 16.29 | -------------------------------------------------------------------------------- | 2 | K. Hartwall Invest Oy | 2,432,000 | 7.93 | -------------------------------------------------------------------------------- | 3 | Rakennusmestarien Säätiö (Construction | 1,862,620 | 6.08 | | | engineers' fund) | | | -------------------------------------------------------------------------------- | 4 | Mariatorp Oy | 1,250,000 | 4.08 | -------------------------------------------------------------------------------- | 5 | Sijoitus-Wipunen Oy | 750,000 | 2.45 | -------------------------------------------------------------------------------- | 6 | Odin Finland | 654,332 | 2.13 | -------------------------------------------------------------------------------- | 7 | Suomi Mutual Life Assurance Company | 550,000 | 1.79 | -------------------------------------------------------------------------------- | 8 | Nordea Nordenfund | 473,583 | 1.54 | -------------------------------------------------------------------------------- | 9 | Ilmarinen Mutual Pension Insurance Company | 352,256 | 1.15 | -------------------------------------------------------------------------------- | 10 | Fondita Nordic Micro Cap | 325,000 | 1.06 | -------------------------------------------------------------------------------- | | Ten largest owners, total | 13,643,41 | 44.50 | | | | 0 | | -------------------------------------------------------------------------------- | | Nominee registered and non-Finnish holders | 5,824,168 | 19.00 | -------------------------------------------------------------------------------- | | Others | 11,192,61 | 36.51 | | | | 1 | | -------------------------------------------------------------------------------- | | Total | 30,660,18 | 100.00 | | | | 9 | | -------------------------------------------------------------------------------- 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 are made. These involve risks and uncertainties and are subject to change due to changes in general economic and industry conditions. Vantaa 28 October 2010 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 in the Palace Gourmet restaurant (Conference hall), address Eteläranta 10, Helsinki, on 29 October 2010 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 as of 29 October 2010 in the afternoon. PUBLICATION OF FINANCIAL INFORMATION 2011 Cramo Plc's Financial Statements Bulletin for 2010 will be published on Thursday, 10 February 2011. The Annual Report containing the full financial statements for 2010 will be published in electronic format in week 10/2011. The 2011 Annual General Meeting will take place on Tuesday, 5 April 2011, in Helsinki. Cramo will publish three Interim Reports in 2011. The January-March Interim Report will be published on Monday, 9 May 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
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