2015-11-04 08:00:00 CET
2015-11-04 08:00:05 CET
REGULATED INFORMATION
Ramirent - Interim report (Q1 and Q3)
Ramirent's Interim Report January-September 2015: Sales up in mixed market conditions, continued pressure on margins
Ramirent Plc Interim Report 4 November 2015 at 9:00 a.m. Vantaa, Finland, 2015-11-04 08:00 CET (GLOBE NEWSWIRE) -- Note! Figures in brackets, unless otherwise indicated, refer to the corresponding period a year earlier. PERFORMANCE JULY-SEPTEMBER 2015 • Net sales EUR 165.1 (163.6) million, up by 1.0% or 3.7% at comparable exchange rates • EBITDA EUR 49.7 (53.9) million or 30.1% (33.0%) of net sales • EBITA EUR 24.8 (28.0) million or 15.0% (17.1%) of net sales • EBITA excl. non-recurring items EUR 25.31) (29.92)) million or 15.3%1) (18.3%2)) of net sales • Cash flow after investments EUR 9.7 (13.7) million • Result for the period EUR 14.4 (18.4) million and EPS EUR 0.13 (0.17) 1) Non-recurring items included a 0.5 MEUR restructuring provision booked in the third quarter of 2015 in Denmark 2) Non-recurring items included 1.9 MEUR restructuring costs booked in the third quarter of 2014 in Norway PERFORMANCE JANUARY-SEPTEMBER 2015 • Net sales EUR 465.2 (452.9) million, up by 2.7% or 5.3% at comparable exchange rates • EBITDA EUR 124.3 (127.8) million or 26.7% (28.2%) of net sales • EBITA EUR 50.0 (51.3) million or 10.7% (11.3%) of net sales • EBITA excl. non-recurring items EUR 46.6 (53.2) million or 10.0% (11.7%) of net sales • Result for the period EUR 27.5 (28.1) million and EPS EUR 0.26 (0.26) • Return on invested capital* (ROI) 11.7% (12.3%) • Return on equity* (ROE) 9.9% (12.0%) • Gross capital expenditure EUR 97.2 (125.6) million • Cash flow after investments EUR −11.7 (−10.7) million • Net debt EUR 286.4 (259.7) million and net debt to EBITDA* 1.7x (1.5x) *Rolling 12 months basis RAMIRENT OUTLOOK FOR FULL YEAR 2015 UNCHANGED Ramirent expects the market picture for 2015 to remain mixed, with challenging market conditions especially in Finland and Norway. We expect full-year 2015 net sales and EBITA margin to be similar to the level of 2014 when measured in local currencies. KEY FIGURES (MEUR) -------------------------------------------------------------------------------- Net sales 165.1 163.6 1.0% 465.2 452.9 2.7% 613.5 -------------------------------------------------------------------------------- EBITDA 49.7 53.9 −7.8% 124.3 127.8 −2.8% 167.9 -------------------------------------------------------------------------------- % of net sales 30.1% 33.0% 26.7% 28.2% 27.4% -------------------------------------------------------------------------------- EBITA excluding non-recurring 25.3 29.9 −15.5% 46.6 53.2 −12.4% 71.5 items -------------------------------------------------------------------------------- % of net sales 15.3% 18.3% 10.0% 11.7% 11.7% -------------------------------------------------------------------------------- EBITA 24.8 28.0 −11.5% 50.0 51.3 −2.6% 65.8 -------------------------------------------------------------------------------- % of net sales 15.0% 17.1% 10.7% 11.3% 10.7% -------------------------------------------------------------------------------- EBIT 22.6 26.0 −13.0% 43.4 45.6 −4.9% 58.1 -------------------------------------------------------------------------------- % of net sales 13.7% 15.9% 9.3% 10.1% 9.5% -------------------------------------------------------------------------------- EBT 17.7 23.7 −25.2% 34.1 36.0 −5.3% 42.5 -------------------------------------------------------------------------------- % of net sales 10.7% 14.5% 7.3% 8.0% 6.9% -------------------------------------------------------------------------------- Result for the period 14.4 18.4 −22.1% 27.5 28.1 −2.3% 32.6 attributable to the owners of the parent company -------------------------------------------------------------------------------- Earnings per share (EPS), 0.13 0.17 −22.1% 0.26 0.26 −2.3% 0.30 (basic and diluted), EUR -------------------------------------------------------------------------------- Gross capital expenditure on 32.2 23.8 35.3% 97.2 125.6 −22.6% 144.6 non-current assets -------------------------------------------------------------------------------- Gross capital expenditure, % 19.5% 14.6% 20.9% 27.7% 23.6% of net sales -------------------------------------------------------------------------------- Cash flow after investments 9.7 13.7 −29.2 −11.7 −10.7 −8.6% 21.8 -------------------------------------------------------------------------------- Invested capital at the end 595.5 605.2 −1.6% 555.2 of period -------------------------------------------------------------------------------- Return on invested capital 11.7% 12.3% 12.2% (ROI),%1) -------------------------------------------------------------------------------- Return on equity (ROE),%1) 9.9% 12.0% 9.4% -------------------------------------------------------------------------------- Net debt 286.4 259.7 10.3% 227.1 -------------------------------------------------------------------------------- Net debt to EBITDA ratio1) 1.7x 1.5x 16.8% 1.4x -------------------------------------------------------------------------------- Gearing,% 93.6% 75.9% 69.9% -------------------------------------------------------------------------------- Equity ratio,% 39.5% 42.8% 43.7% -------------------------------------------------------------------------------- Personnel at end of period 2,658 2,621 1.4% 2,576 (FTE) -------------------------------------------------------------------------------- 1) Rolling 12 months COMMENTS FROM CEO MAGNUS ROSÉN: “The positive top line development that was observed at the end of the second quarter did not fully materialise in the third quarter, with weaker than expected performance in both Sweden and Norway. Combined with higher material and services costs and slower than expected realisation of the efficiency programme, our third-quarter EBITA was EUR 24.8 (28.0) million or 15.0% (17.1%) of net sales. Return on equity amounted to 9.9% (12.0%) measured over the last twelve months. Profitability was impaired by a higher share of service sales compared to the previous year, price pressure and internal reorganisations. We maintained good control over fixed costs, where rolling 12 months fixed costs decreased to EUR 235.6 (239.0) million or 37.6% (38.5%) of net sales. In the third quarter, it was particularly satisfying that despite challenging market conditions in the Finnish equipment rental market, our sales grew and profitability improved in Finland. Profitability strengthened clearly in Denmark where our restructuring measures combined with the improving underlying demand are producing better results. In Europe Central, our profitability continued to improve supported by successful implementation of efficiency actions, internal reorganisation and higher rental prices compared to the previous year. In Baltics, demand for equipment rental was stable. In Sweden, the net sales growth was slightly lower than expected despite a strong market, with profitability being below previous year due to a higher share of service sales and internal restructuring. In Norway, slow underlying demand in the building construction sector and uncertainty in the oil and gas sector, resulted in lower sales and profitability. Corrective actions have been taken to improve profitability both in Sweden and Norway. In the third quarter we signed an exclusive project agreement with NCC for the delivery of a Total Solution combining machines and planning with high focus on safety, for the expansion of Södra Cell Värö pulp mill in Sweden. The value of the order is approximately EUR 10 million with the project extending to autumn 2016. After the end of the review period, we signed a Letter of Intent with Hartela for outsourcing of equipment, machinery operations and personnel to Ramirent in Finland. We continue to implement our efficiency programme to improve profitability and operational excellence, although realisation has been slower than expected. While the efficiency programme has been successful in lowering the fixed cost base, the expected margin improvement has not materialised due to less favourable market conditions and price pressure, primarily in Finland and Norway, and slower than planned adoption of the efficiency measures. Based on our cash generation and continued solid financial position, we will continue to invest in sustainable profitable growth and to capture market share by strengthening the customer offering and widening the customer portfolio. We will also continue to pursue outsourcing deals, acquisitions and joint venture opportunities.” MARKET OUTLOOK 2015 Ramirent expects market conditions for equipment rental to remain challenging in Finland in the fourth quarter of 2015. According to a forecast published by European Rental Association (ERA) in October 2015, the Finnish equipment rental market is expected to increase by 1.7% this year. According to a forecast published by Finnish Construction Industries (RT) in October 2015, the Finnish construction market is expected to decline by 1% in 2015. Demand for renovation is estimated to increase due to ageing residential stock and government assistance for renovation projects. The total value of renovation is estimated to exceed the value of new construction in 2015. Weak market conditions are expected to continue in the new residential construction sector especially outside the capital city region. Demand for equipment rental in non-residential construction is supported by start-ups of certain large commercial and industrial building projects. Infrastructure construction is expected to decrease in 2015 due to the completion of large projects and a low level of new investments. The Confederation of Finnish Industries (EK) expects full-year industrial investments in the general manufacturing sector as well as in the energy sector to increase in 2015. Ramirent expects the demand for equipment rental to remain favourable in Sweden in the fourth quarter of 2015 mainly due to the high activity in all construction sectors. According to a forecast published by European Rental Association (ERA) in October 2015, the Swedish equipment rental market is expected to grow by 1.0% in 2015. According to a forecast published by Swedish Construction Federation (BI) in October 2015, construction investments are expected to grow by 8% in 2015. Market conditions are strong especially in many of Sweden's major cities. New residential start-ups will remain at a high level due to a chronic housing shortage in the market. Non-residential construction is expected to increase supported by growth in office and commercial building projects. The government's transport infrastructure plan, approved in 2014, will fuel activity within infrastructure construction especially in the Stockholm and Gothenburg areas also in the fourth quarter of the year. Due to a continuously expanding and ageing building stock, renovation is expected to grow in 2015. Demand for equipment rental in the industrial sector is anticipated to remain fairly stable in Sweden. Ramirent expects market conditions for equipment rental to remain challenging in Norway in the fourth quarter of 2015 due to macroeconomic uncertainty connected to the low oil price. According to a forecast published by European Rental Association (ERA) in October 2015, the Norwegian equipment rental market is expected to decline by 1.5% this year. According to a forecast published by Prognosesenteret in October 2015, the Norwegian construction market is expected to grow by 1.9% in 2015. Infrastructure construction supported by government stimulus measures will be the main growth driver fuelled by several road, railway and metro projects. Residential construction is estimated to remain at the previous year's level in 2015. Non-residential construction sector is expected to increase supported by several public sector projects. Renovation construction is expected to increase in 2015. According to an estimate by Statistics Norway, investments in the oil and gas sector are estimated to decline by 15.1% in 2015. Ramirent expects market conditions for equipment rental to be balanced in Denmark in the fourth quarter of 2015. According to a forecast published by European Rental Association (ERA) in October 2015, the Danish equipment rental market is expected to grow by 1.4% this year. According to a forecast published by Danish Construction Industry (DB) in October 2015, the Danish construction market is expected to increase by 3.5% in 2015. Demand in the renovation market is expected to soften while new residential construction is estimated to increase backed by a healthy underlying demand in the major cities. In 2015, public investments are expected to fuel infrastructure construction and building activity especially in the health and education sector. Activity in the industrial sector is expected to support the demand for equipment rental also in the fourth quarter of 2015. Ramirent expects the overall demand in the Baltic equipment rental market to remain balanced in the fourth quarter of 2015. According to a forecast published by Euroconstruct in June 2015, the total construction market in the Baltics is expected to decrease by 2.5% in 2015. In Estonia the construction market is expected to decline by 4% in 2015. The main construction projects will be located in the capital city region and southern parts of Estonia. The Latvian construction market is estimated to decline by 6% in 2015. Residential construction is expected to remain stable, but construction activity in the non-residential sector will slow down due to the continued economic uncertainty caused by the Ukrainian crisis. In Lithuania the construction market is expected to grow by 1% in 2015. Increasing residential construction and high activity in renovation will be the main growth drivers in the Lithuanian market. EU funded projects are expected to start mainly in 2016, supporting especially infrastructure construction and renovation in 2016. Ramirent expects the overall demand in Europe Central equipment rental markets to remain favourable in the fourth quarter of 2015. According to a forecast published by European Rental Association (ERA) in October 2015, the Polish equipment rental market is expected to grow by 2.6% this year. According to a forecast published by Euroconstruct in June 2015, the Polish construction market is estimated to grow by 9.7% in 2015. Infrastructure construction projects, funded largely by EU, will be the primary driver of growth in the construction sector. Market conditions are expected to be favourable in residential construction as new start-ups are forecast to increase clearly. Construction activity is expected to continue to pick up in the non-residential sector supported especially by construction of industrial buildings. Increasing renovation as well as high project activity in the power plant and wind power sector is estimated to support the equipment rental market. In the Czech Republic and Slovakia, the construction market is expected to grow by 4.3% and by 2.1% respectively in 2015. Demand for equipment rental is expected to remain strong especially in the construction sector. ANALYST AND PRESS BRIEFING A briefing for investment analysts and the press will be arranged 4 November, 2015 at 11:00 a.m. Finnish time at Ramirent Group headquarters, (visiting address: Äyritie 16, 01510 Vantaa). WEBCAST AND CONFERENCE CALL You can participate in the analyst briefing on Wednesday 4 November 2015 at 11:00 a.m. Finnish time (EET) through a live webcast at www.ramirent.com and conference call. Dial−in numbers are: +358 9 8171 0495 (FI), +46 8 5664 2702 (SE), +44 203 194 0552 (UK) and +1 8 557 161 597 (US). Recording of the webcast will be available at www.ramirent.com later the same day. FINANCIAL CALENDAR 2015-2016 Ramirent observes a silent period during 21 days prior to the publication of annual and interim financial results. 2015 Capital Markets Day 2015 in Stockholm 1 December 2015 CET 9:00 a.m. -2.45 p.m. 2016 Financial statements 2015 11 February 2016 at EET 9:00 a.m. Interim report January-March 2016 4 May 2016 at EET 9:00 a.m. Interim report January-June 2016 4 August 2016 at EET 9:00 a.m. Interim report January-September 2016 4 November 2016 at EET 9:00 a.m. The financial information in this stock exchange release has not been audited. Vantaa, 4 November 2015 RAMIRENT PLC Board of Directors FURTHER INFORMATION CEO Magnus Rosén tel. +358 20750 2845, magnus.rosen@ramirent.com CFO and EVP, Corporate Functions Jonas Söderkvist tel. +358 20 750 3248, jonas.soderkvist@ramirent.com SVP, Marketing, Communications and IR Franciska Janzon tel. +358 20 750 2859, franciska.janzon@ramirent.com DISTRIBUTION NASDAQ OMX Helsinki Main news media www.ramirent.com Ramirent is a leading rental equipment group combining the best equipment, services and know-how into rental solutions that simplify customer's business. Ramirent serves a broad range of customer sectors including construction, industry, services, the public sector and households. Ramirent focuses on the Baltic Rim with operations in the Nordic countries and in Central and Eastern Europe. In 2014, Ramirent Group sales totalled EUR 614 million. The Group has 2,658 employees in 295 customer centres in 10 countries. Ramirent is listed on the NASDAQ Helsinki (RMR1V). 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