2016-10-26 08:00:01 CEST
2016-10-26 08:00:01 CEST
REGULATED INFORMATION
Cramo Oyj - Interim report (Q1 and Q3)
Cramo’s Interim Report January–September 2016
Profitable growth continued
Vantaa, Finland, 2016-10-26 08:00 CEST (GLOBE NEWSWIRE) -- Cramo Plc
Interim Report 26th October 2016, at 9.00 am Finnish time (EET)
Cramo’s Interim Report January–September 2016
Profitable growth continued
JULY–SEPTEMBER 2016
-- Sales EUR 184.8 (172.4) million, up by 7.2%. In local currencies, sales
grew by 7.9%.
-- EBITA EUR 38.9 (30.2) million and EBITA margin 21.1% (17.5%)
-- Earnings per share EUR 0.64 (0.43)
-- Cash flow from operating activities EUR 51.2 (53.0) million and cash flow
after investments EUR 0.0 (10.9) million
JANUARY–SEPTEMBER 2016
-- Sales EUR 519.4 (480.7) million, up by 8.0%. In local currencies, sales
grew by 8.8%.
-- EBITA EUR 78.5 (58.7) million and EBITA margin 15.1% (12.2%)
-- Earnings per share EUR 1.20 (0.75)
-- Return on equity 14.5% (5.4%)
-- Cash flow from operating activities EUR 114.0 (101.4) million and cash flow
after investments EUR -9.5 (-1.4) million
-- Gearing 81.2% (87.3%)
CHANGES IN ORGANISATION DURING THE THIRD QUARTER
-- As of 11 August 2016, Mr Aku Rumpunen, Senior Vice President, Group
Business Control was appointed Cramo’s Interim CFO in relation to CFO Mr
Martti Ala-Härkönen leaving the company
-- On 16 August 2016, Mr Peter Bäckström was appointed Managing Director of
Cramo AB in Sweden and member of Cramo Group Management Team. Succeeding Mr
Göran Carlson, Mr Bäckström will assume his position, under the title of
Executive Vice President, on 1 January 2017 at the latest.
GUIDANCE FOR 2016 UNCHANGED: In 2016, Cramo Group’s sales will grow in local
currencies and the EBITA margin will improve compared to 2015.
CEO LEIF GUSTAFSSON’S COMMENT
Continued result improvement
"The demand for equipment rental and modular space has developed favourably
this year, and we have succeeded in increasing sales and profit in both product
areas.
Our sales grew in local currencies by 8.8% in January–September and by 7.9% in
the third quarter. During the third quarter, sales grew in all markets, with
the exception of Norway and Eastern Europe.
Our profitability also continued to develop favourably. The January–September
EBITA margin increased from 12.2% to 15.1% and the third-quarter EBITA margin
grew from 17.5% to 21.1%. During the third quarter, profitability improved on
all markets, with the exception of Eastern Europe. I am particularly satisfied
with the fact that the EBITA-result for Central Europe has turned positive. The
turn for the better took place in the second quarter, and I believe that the
full-year EBITA-result for Central Europe will be positive. Profit development
also continued to be strong in Finland and Sweden as well as in the entire
equipment rental product area.
During the remaining months of the year, we are continuing the implementation
of our focused strategy and the preparation of Vision 2020.
I expect the demand for equipment rental and modular space to stay on a good
level for the remainder of the year. Over the long term, the demand for rental
services is supported by several megatrends, such as urbanisation and efforts
to achieve sustainable development. Cramo is in a good position in most of its
markets to capitalise on the opportunities created by the market."
SUMMARY OF FINANCIAL PERFORMANCE
KEY FIGURES AND 7-9/16 7-9/15 Change % 1-9/16 1-9/15 Change % 1-12/1
RATIOS (MEUR) 5
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Income statement
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Sales 184.8 172.4 7.2 % 519.4 480.7 8.0 % 667.9
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EBITDA 65.9 55.8 18.2 % 157.9 133.8 18.0 % 185.7
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EBITA 1) 38.9 30.2 28.9 % 78.5 58.7 33.8 % 84.8
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% of sales 21.1% 17.5% 15.1% 12.2% 12.7%
--------------------------------------------------------------------------------
Operating profit 37.7 28.3 33.6 % 74.8 52.5 42.6 % 76.7
(EBIT)
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Profit before taxes 34.9 24.6 42.1 % 66.5 42.5 56.4 % 63.8
(EBT)
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Profit for the 28.3 18.9 49.1 % 53.2 33.1 60.6 % 49.7
period
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Share related
information
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Earnings per share 0.64 0.43 48.3 % 1.20 0.75 58.9 % 1.13
(EPS), EUR 2)
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Earnings per share 0.63 0.43 48.4 % 1.19 0.75 59.0 % 1.12
(EPS), diluted, EUR
--------------------------------------------------------------------------------
Shareholders’ equity 11.22 10.52 6.7 % 11.05
per share, EUR
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Other information
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Return on 11.2 % 5.4 % 9.0 %
investment, %
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Return on equity, % 14.5 % 5.4 % 10.5 %
--------------------------------------------------------------------------------
Equity ratio, % 44.0 % 43.1 % 45.7 %
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Gearing, % 81.2 % 87.3 % 75.1 %
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Net interest-bearing 404.7 407.1 -0.6 % 368.4
liabilities
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Net debt / EBITDA 1.93 2.24 -14.0 % 1.98
--------------------------------------------------------------------------------
Gross capital 59.7 46.7 27.8 % 159.5 134.3 18.7 % 175.0
expenditure (incl.
acquisitions)
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of which 0.0 -0.1 -100.0 % 4.4 8.5 -48.1 % 9.8
acquisitions/busine
ss combinations
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Cash flow from 51.2 53.0 -3.5 % 114.0 101.4 12.4 % 174.9
operating
activities 3)
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Cash flow after 0.0 10.9 -99.8 % -9.5 -1.4 -566.4 % 35.6
investments
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Average number of 2,551 2,486 2.6 % 2,486
personnel (FTE)
--------------------------------------------------------------------------------
Number of personnel 2,583 2,478 4.2 % 2,473
at period end (FTE)
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1. The third quarter 2015 included EUR 1.2 million in costs relating to the
change of President and CEO. 7-9/15 comparable EBITA before those costs
were EUR 31.4 million (18.2% of sales) and 1-9/15 comparable EBITA was EUR
59.9 million (12.5% of sales). The fourth quarter 2015 included EUR 0.8
million costs relating to restructuring in Central Europe. The full-year
2015 comparable EBITA before above-mentioned costs were EUR 86.8 million
(13.0% of sales).
2. 7-9/15 comparable earnings per share before the above-mentioned costs and
their tax impact were EUR 0.45. 1-9/15 comparable earnings per share were
EUR 0.78 and 1-12/15 comparable earnings per share were EUR 1.17.
3. 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 7-9/2015 decreased by EUR 0.7 million, for the period 1–9/2015
decreased by EUR 10.2 million and for the period 1–12/2015 decreased by EUR
8.0 million.
Calculation of key figures is presented on page 23.
Sales
January–September 2016
Cramo Group’s consolidated sales for January–September were EUR 519.4 (480.7)
million, showing an increase of 8.0%. In local currencies, sales grew by 8.8%.
Sales grew by 16.1% in Finland, by 11.2% in Sweden (11.2% in the local
currency), by 16.7% in Denmark and by 3.6% in Central Europe. Sales decreased
by 9.5% in Norway (-3.7% in the local currency) and by 2.8% in Eastern Europe
(-1.8% in local currencies).
As for product areas, sales growth was 5.4% (6.1% in local currencies) for
equipment rental and 24.0% (24.4% in local currencies) for modular space.
Plenty of new modular space deliveries took place during the period, which
increased the sales of assembly services in particular. Rental sales of modular
space increased by 10.1% year-on-year.
July–September 2016
In the third quarter, the Group’s consolidated sales were EUR 184.8 (172.4)
million, growing by 7.2%. In local currencies, sales grew by 7.9%. In the third
quarter, sales grew by 15.8% in Finland, by 8.0% in Sweden (9.0% in the local
currency), by 9.5% in Denmark, by 4.8% in Central Europe. Sales decreased by
2.7% in Norway (-1.7% in the local currency) and by 1.1% in Eastern Europe
(-0.5% in local currencies).
As for product areas, sales growth during the third quarter was 4.9% (5.5% in
local currencies) for equipment rental and 21.0% (21.5% in local currencies)
for modular space. In the third quarter, rental sales of modular space
increased by 9.8% year-on-year.
Costs
The Group costs as a share of sales decreased both in the third quarter and
during the entire review period, which had a positive impact on profitability.
In January–September, direct costs (materials and services) as a share of sales
reduced from 34.6% to 33.5%. Indirect costs (employee benefit expenses and
other operating expenses) as a share of sales decreased from 39.6% to 38.3%.
Depreciation and impairment on tangible assets in relation to sales decreased
from 15.6% to 15.3%.
Result
January–September 2016
The January–September result and profitability improved year-on-year. EBITA was
EUR 78.5 (58.7) million, showing a growth of 33.8%. EBITA margin was 15.1%
(12.2%). Profitability improved in Finland, Sweden, Denmark and Central Europe.
The profit increased in both product areas. EBITA was EUR 62.9 (44.9) million,
or 14.5% (10.9%) of sales, for equipment rental and EUR 22.5 (21.6) million, or
26.2% (31.2%) of sales, for modular space. Modular space EBITA margin was
affected negatively by the significant proportion of assembly and disassembly
services and measures taken to support further growth.
In January–September, earnings per share were EUR 1.20 (0.75). Return on equity
(rolling 12 months) improved and was 14.5% (5.4%).
Cash flow from operating activities improved and was EUR 114.0 (101.4) million
in January–September. Cash flow after investments was EUR -9.5 (-1.4) million.
Fleet investments were increased and gross capital expenditure was EUR 159.5
(134.3) million.
The Group’s gearing was 81.2% (87.3%) at the end of September. Net debt per
EBITDA stood at 1.93 (2.24) at the end of the period.
July–September 2016
In the third quarter, EBITA was EUR 38.9 (30.2) million and EBITA margin was
21.1% (17.5%) of sales. Profitability improved on all segments, with the
exception of Eastern Europe. The third quarter of the comparison year 2015
included EUR 1.2 million in costs relating to the change of President and CEO.
The EBITA margin for the comparison period, excluding these costs, was 18.2%.
In the third quarter, EBITA was EUR 33.2 (25.8) million, or 21.4% (17.5%) of
sales, for equipment rental and EUR 7.5 (8.0) million, or 24.7% (32.1%) of
sales, for modular space. For modular space, EBITA and EBITA margin was
negatively affected by the significant proportion of assembly and disassembly
services, periodically high repair activity and measures taken to support
further growth.
Third-quarter earnings per share were EUR 0.64 (0.43).
MARKET OUTLOOK
In Cramo countries, the construction market outlook for 2016 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 Latvia and Russia.
In its June forecast, Euroconstruct estimated that construction would increase
by 4–5% in Finland, Sweden and Norway in 2016, but local market analysts
predict an increase of 6–9%. In Denmark and Germany, the construction market is
estimated to grow by approximately 2%. In Eastern Europe, the construction
market forecasts show significant differences between countries.
In equipment rental, changes in demand usually follow those in construction
with a delay. In addition to construction volume, the demand for equipment
rental services 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 and the increasing
emphasis on sustainability.
According to its June forecast, the European Rental Association (ERA) expects
the use of equipment rental services to increase in 2016 in all of Cramo’s
markets reported by ERA. According to Cramo’s estimate, the demand for modular
space has increased in the Nordic countries by nearly 6% per year during the
past five years.
(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 Wednesday, 26 October 2016 at
11.00 am. The briefing will be in English.
It can be viewed live on the Internet at www.cramo.com. A replay of the webcast
will be available at www.cramo.com from 26 October 2016 in the afternoon.
PUBLICATION OF FINANCIAL INFORMATION IN 2017
Cramo Plc’s Financial Statements for 2016 will be published on Tuesday, 7th
February 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, 30th March
2017, in Helsinki.
In 2017, Cramo will publish three interim reports:
Interim report January–March 2017 on 28th April 2017
Half year financial report January–June 2017 on 26th July 2017
Interim report January–September 2017 on 25th 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, Interim 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.cramo.com
Cramo is Europe’s second largest rental services company specialising in
construction machinery and equipment rental and rental-related services as well
as the rental of modular space. Cramo operates in fifteen countries 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.cramo.com, www.twitter.com/cramogroup
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