Cramo Plc Interim report 11 November 2008, at 9.00 am Finnish time
(GMT+2)
CRAMO'S PERFORMANCE IN LINE WITH TARGETS - INTERIM REPORT FOR JANUARY-SEPTEMBER
2008
-Consolidated sales EUR 436,5 (352.7) million, up 23.8%, with third-quarter
growth of 20.7%
-EBITA EUR 82.3 (69.8) million, up 17.9%; third-quarter EBITA EUR 34.2 (30.7)
million
-EBIT EUR 77.2 (66.7) million, up 15.8%
-Undiluted earnings per share EUR 1.37 (1.40); diluted earnings per share EUR
1.37 (1.38)
-Due to its modern fleet, the Group sees no need for new investments and limited
need for maintenance capital expenditure
-The Group reconfirms its sales growth guidance at above 18% and an EBITA above
18% of sales in 2008, in line with the Group's financial targets. However, the
risk level has increased
-In 2009, in a volatile environment, the Group expects to achieve a positive
cash flow after investments and a lower gearing
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| KEY FIGURES AND RATIOS | 7-9/08 | 7-9/07 | 1-9/08 | 1-9/07 | 1-12/07 |
| (EUR 1,000) | | | | | |
--------------------------------------------------------------------------------
| Sales, EUR 1,000 | 155,697 | 128,962 | 436,486 | 352,655 | 496,428 |
--------------------------------------------------------------------------------
| Operating profit before | 34,215 | 30,736 | 82,310 | 69,819 | 95,963 |
| amortisation on | | | | | |
| intangible assets | | | | | |
| resulting from | | | | | |
| acquisitions (EBITA) | | | | | |
--------------------------------------------------------------------------------
| Operating profit (EBIT) | 32,255 | 29,739 | 77,225 | 66,713 | 91,844 |
--------------------------------------------------------------------------------
| Profit before tax (EBT) | 24,517 | 25,451 | 58,926 | 55,276 | 75,808 |
--------------------------------------------------------------------------------
| Profit for the period | 18,019 | 19,221 | 41,917 | 42,806 | 57,485 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings per share (EPS) | 0.65 | 0.65 | 1.53 | 1.48 | 2.00 |
| before amortisation on | | | | | |
| intangible assets | | | | | |
| resulting from | | | | | |
| acquisitions, diluted, | | | | | |
| EUR | | | | | |
--------------------------------------------------------------------------------
| Earnings per share | 0.59 | 0.63 | 1.37 | 1.40 | 1.88 |
| (EPS), undiluted, EUR | | | | | |
--------------------------------------------------------------------------------
| Earnings per share | 0.59 | 0.62 | 1.37 | 1.38 | 1.87 |
| (EPS), diluted, EUR | | | | | |
--------------------------------------------------------------------------------
| Equity per share, EUR | | | 11.39 | 10.52 | 10.88 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Return on equity, | | | 16.9 | 19.5 | 18.4 |
| rolling | | | | | |
| 12-month ROE, % | | | | | |
--------------------------------------------------------------------------------
| Equity ratio, % | | | 32.4 | 38.2 | 37.3 |
--------------------------------------------------------------------------------
| Gearing, % | | | 147.1 | 109.1 | 109.4 |
--------------------------------------------------------------------------------
| Net interest-bearing | | | 513,694 | 351,788 | 364,985 |
| liabilities, EUR 1,000 | | | | | |
--------------------------------------------------------------------------------
| Gross capital | | | 169,270 | 124,711 | 175,494 |
| expenditure, EUR 1,000 | | | | | |
--------------------------------------------------------------------------------
| % of sales | | | 38.8 | 35.4 | 35.4 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Average personnel | | | 2,564 | 2,134 | 2,070 |
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SUMMARY OF FINANCIAL PERFORMANCE IN JANUARY-SEPTEMBER 2008
Cramo Group's consolidated sales continued on a high level throughout the third
quarter of 2008. Sales increased in all market areas and totalled EUR 436.5
million in January-September. Compared to the corresponding period of last year
(EUR 352.7 million), consolidated sales were up 23.8 per cent. In July-September
the Group's sales growth was 20.7 per cent, totalling EUR 155.7 (129.0) million.
Acquisitions and equipment investments, as well as new depots and new markets
fuelled the sales growth. In the third quarter, the strongest equipment rental
sales growth was achieved in Central and Eastern Europe, 44.4 per cent, and in
Western Europe, 41.7 per cent.
EBITA for January-September was EUR 82.3 (69.8) million, 18.9 (19.8) per cent of
sales. EBITA increased by 17.9 per cent year on year. EBITA for the third
quarter was EUR 34.2 (30.7) million, 22.0 (23.8) per cent of sales. The
third-quarter profits were in line with the Group's expectations. Successfully
completed investments in new market areas and cost adjustments in markets with
slower growth contributed to the Group's performance. Profitability improved in
the equipment rental business in Finland and Sweden as well as in the modular
space business, but weakened in Western Europe and in Central and Eastern
Europe. However, profitability in Central and Eastern Europe improved during Q3
compared to the first half of the year. This was achieved in spite of a
significant market slowdown in the Baltic countries. The modular space business
maintained its profitability at an excellent level, contributing to stability in
Cramo Group's operations over the business cycle.
Accelerating during Q3, the Group has seen a deteriorating business environment.
The good performance of the Group provides proof of the Group's strong market
position in the Nordic area, and in the developing Central and East European
markets. The Group also acted early on signals from the market.
With its modern fleet at hand, Cramo saw no need for new investments, and also
cut maintenance capital expenditure to a minimum.
OUTLOOK FOR THE IMMEDIATE FUTURE
Economic uncertainty overall has increased since mid-September. The Group sees a
negative development in construction volumes particularly in the Nordic region
and the Baltic countries in 2009. Cramo anticipates, however, that the impact on
the demand for rental services will not be as severe as it is feared to be in
construction in general. This is related to increasing penetration rates,
increased equipment outsourcing, and growth in the demand for rental-related
services. Continued growth is also anticipated in the demand for modular space,
supported by relocations, demographic changes and the industry's and public
administration's needs for increasingly flexible space solutions.
In a cyclical downturn, rental services provide an attractive alternative to
purchasing new equipment. With its relatively high utilisation rates, rental is
more cost-efficient compared to owned equipment. It also releases investment
funds for other usage. The modular space business, on the other hand, is less
cyclical than equipment rental. Cramo believes that a portion of the
construction projects cancelled or postponed due to lack of funding, will be
offset by the rental of modular space. In spite of an overall slowdown in
construction, the modular space market is believed to continue to grow. At the
same time, there is a permanent pent-up demand for construction in Central and
Eastern Europe.
Expansion has required the Group to maintain a high level of capital expenditure
up to 2008. As a consequence, a growing percentage of the Group´s business will
be generated in the emerging markets in the future. The high investments have
also produced a modern and competitive fleet. Now, however, Cramo Group has
embarked on an “investment holiday” for the balance of 2008 and total 2009.
Instead of investing in new equipment, the Group will focus on optimising the
use of its existing fleet throughout the whole Group. The Group will also
continue its systematic cost adjustment measures, defending the Group's
profitability and cash flow from operations at a good level in the new market
situation.
Several European currencies have weakened in relation to the Euro. If current
exchange rates stay, there will be a negative translational impact on the
Group's Euro-based consolidated figures.
The Group reconfirms its sales growth guidance at above 18% and an EBITA above
18% of sales in 2008, in line with the Group's financial targets. However, the
risk level has increased.
In 2009, in a volatile environment, the Group expects to achieve a positive cash
flow after investments and a lower gearing.
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 consolidated sales continued to be strong throughout the third
quarter of 2008. Consolidated sales amounted to EUR 436.5 million in
January-September. Compared to those of the corresponding period of last year
(EUR 352.7 million), consolidated sales increased by 23.8 per cent. Sales growth
from continuing operations in January-September was 24.8 per cent, while organic
growth was 19.6 per cent. Sales developed as expected. They were boosted by the
acquisitions and equipment investments completed in the first half of the year,
especially in new depots and new markets.
The equipment rental business reported sales of EUR 382.0 (303.6) million in
January-September and showed an increase of 25.8 per cent. Excluding the
Netherlands (business divested in 2007), equipment rental sales grew by 27.1 per
cent. The modular space business recorded sales of EUR 59.1 (54.4) million,
showing an increase of 8.8 per cent. Inter-segment sales (equipment rental and
modular space) came to EUR 4.7 (5.3) million in January-September.
Cramo Group's third-quarter consolidated sales totalled EUR 155.7 million.
Compared to the corresponding period of last year (EUR 129.0 million), sales
increased by 20.7 per cent. The equipment rental business reported sales of EUR
136.7 (112.2) million in January-September, and the modular space business
recorded sales of EUR 20.4 (18.4) million.
Consolidated operating profit before amortisation on intangible assets from
acquisitions (EBITA) was 82.3 (69.8) million, or 18.9 (19.8) per cent of
consolidated sales, in January-September. EBITA increased by 17.9 per cent year
on year. The equipment rental business reported an EBITA of EUR 66.4 (62.6)
million, and the modular space business an EBITA of EUR 17.8 (14.0) million.
EBITA for the third quarter amounted to EUR 34.2 (30.7) million, representing
22.0 (23.8) per cent of sales. The third-quarter profits were in line with the
Group's expectations. Successfully completed investments in new market areas and
cost adjustment in markets with slower growth contributed to the Group's
performance. Profitability improved in the equipment rental business in Finland
and Sweden as well as in the modular space business, but weakened in Western
Europe and in Central and Eastern Europe, nevertheless improving in Central and
Eastern Europe from the first half of the year despite the clear market slowdown
in the Baltic countries.
The January-September credit losses and credit loss provisions totalled EUR 2.3
(1.5) million, or 0.5 (0.4) per cent of sales.
EBIT for January-September amounted to EUR 77.2 (66.7) million, representing
17.7 per cent of sales. Profit before tax was EUR 58.9 (55.3) million, while
profit for the period totalled EUR 41.9 (42.8) million. Undiluted earnings per
share were EUR 1.37 (1.40) and diluted earnings per share were EUR 1.37 (1.38).
Return on investment (in the form of rolling 12-month ROI) stood at 13.2 per
cent and return on equity (rolling 12-month) at 16.9 per cent.
CAPITAL EXPENDITURE AND DEPRECIATION/AMORTISATION
Gross capital expenditure of EUR 169.3 (124.7) million was mainly allocated to
the purchase of rental equipment. Company acquisitions carried out during the
period under review are not included in gross capital expenditure. The cost of
company and business acquisitions in January-September amounted to EUR 47.6
million. In 2008, Cramo Group's equipment investments will increase from the
previous year's level and will more strongly target Central Europe and Russia.
The Group will downsize its investments considerably in 2009 and, instead of
investing in new equipment, focus on optimising the use of its existing fleet
throughout the Group.
Reported depreciation on property, plant and equipment and software totalled EUR
62.6 (45.1) million. Amortisation on intangible assets resulting from
acquisitions totalled EUR 5.1 (3.1) million. At the end of the period, goodwill
totalled EUR 159.4 (152.1) million.
FINANCIAL POSITION AND BALANCE SHEET
The Group showed a positive net cash flow of EUR 78.2 (78.2) million from
operating activities. The cash flow from operating activities was affected by a
negative change in working capital by EUR -32.6 million, which represents normal
fluctuation in working capital. Cash flow from investments was negative EUR
187.2 (negative EUR 113.1) million, of which EUR -39.3 million was related to
acquisitions. Cash flow from financing activities amounted to EUR 109.9 (7.5)
million. At the end of the period, cash and cash equivalents amounted to EUR
19.2 (14.7) million, with the net change coming to EUR 1.0 (negative EUR 27.1)
million. The Group expects to achieve a positive cash flow after investments in
2009.
At the end of the period, Cramo Group's gross interest-bearing liabilities
totalled EUR 532.9 (366.5) million. The Group has used interest-rate swaps of
approximately EUR 130.1 million to hedge its non-current loans. Hedge accounting
is applied to this amount. Current loans include a total of EUR 115 million of
loan withdrawals as current loans from non-current credit limits. Cramo Group's
unused non-current credit limits totalled EUR 60 million and current credit
limits EUR 13 million on 30 September 2008. The Group has later opened new
unused non-current credit limits in the amount of EUR 20 million and current
credit limits in the amount of EUR 35 million to offset current funding obtained
particularly from the commercial paper market.
On 30 September 2008, Cramo Group's net interest-bearing liabilities totalled
EUR 513.7 (351.8) million, with gearing at 147.1 (109.1) per cent. The growth in
gearing resulted from the Group's capital expenditure and acquisitions in the
first half of 2008. In 2009 the Group expects to achieve a lower gearing.
The balance sheet total on 30 September 2008 was EUR 1,085.1 (850.6) million and
the equity ratio was 32.4 (38.2) per cent.
Property, plant and equipment amounted to EUR 621.9 (443.9) million of the
balance sheet total, with equipment rental representing EUR 480.2 million, or
77.2 per cent, and modular space representing EUR 141.7 million, or 22.8 per
cent.
Net working capital on 30 September 2008 amounted to EUR 41.3 million, with
equipment rental representing EUR 43.6 million and modular space representing
EUR -2.2 million. Inventories amounted to EUR 20.3 million on 30 September 2008,
with modular space representing EUR 11.1 million, or 54.8 per cent.
RISK MANAGEMENT
The main sources of uncertainty in Cramo's business are related to global
economic developments, as well as the economic cycle and financial development
of each country, interest and exchange rate fluctuations, availability of
financing, credit loss risks and the success of the Group's acquisitions. The
global financial crisis has increased the risk factors associated with the
business, including the availability of financing and credit loss risks. Cramo
Group will give increased attention to its risk management activities in the new
operating environment.
GROUP STRUCTURE
At the end of the period under review, the operating companies of Cramo Group
consisted of the parent company and its subsidiaries in Finland, Sweden, Norway,
Denmark, Estonia, Latvia, Lithuania, Poland and the Czech Republic, as well as
Cramo Instant Oy's subsidiaries in Finland and Suomen Tähtivuokraus Oy's
subsidiaries in Poland and St Petersburg, Russia. Cramo Plc also has a 75 per
cent holding in Cramo JV Oy, which has a subsidiary, ZAO Cramo Rentakran, in
Russia. The Slovakian business unit is part of the Czech company.
Equipment rental services are provided through a network of 298 (263) depots.
Cramo Instant Oy in Finland and Cramo Instant AB in Sweden, Norway and Denmark
are engaged in the modular space business.
BUSINESS DEVELOPMENT
In the first half of the year, Cramo expanded its operations through
acquisitions in Finland, Sweden, Norway, Latvia and the Czech Republic. In the
third quarter, Cramo signed an outsourcing agreement with MSE A/S in Denmark.
Techniline s.r.o., operating in the Czech Republic and Slovakia, was integrated
into the Group on 1 April 2008. SIA Tapeks Noma, from Latvia, was integrated
into Cramo on 1 May 2008. The business of Kranab, operating in Sweden, was
integrated into the Group on 1 April 2008. Hyrmaskiner i Bollnäs AB, operating
in Sweden, was integrated into the Group on 1.4.2008. In Finland, Pohjolan
Teline Oy, which operates in the Kemi-Tornio area, was integrated into the Group
on 1.4.2008. Kranenentreprenören AS, operating in Norway, was integrated into
the Group on 14.5.2008 and GMM Hyrservice, operating in Sweden, on 1.6.2008. All
of these business integrations were successful.
Cramo Group signed two significant outsourcing agreements in January-September.
In accordance with an agreement signed in June, Cramo took over the rental
operations of JM Byggholt AS in Norway in August. In Denmark, Cramo signed an
outsourcing agreement with MSE A/S, under which Cramo takes over the existing
machine fleet of the Falster-based MSE A/S. The agreement also makes Cramo the
main equipment rental supplier of MSE A/S for a minimum period of five years.
The impact of the agreement signed in August on Cramo A/S' sales is estimated at
DKK 4.5 million (EUR 0.6 million).
In April, Cramo Plc signed an agreement on the sale of nine of its real estate
properties in Finland to Aberdeen Property Fund Finland I Ky and companies owned
by Aberdeen. Cramo also sold seven other real estate properties in Finland in
the first half of the year. The total capital gain from the property
transactions is EUR 6.0 million, which is recognised under other operating
income.
Cramo's vision is to be the preferred rental solutions provider in the eyes of
customers. Cramo aims to be one of the two largest industry players in every
market in which it operates, and to be one of the most profitable companies in
the industry. Cramo aims at growth both organically and through acquisitions.
HUMAN RESOURCES
During the period under review, Group staff averaged 2,564 (2,134). The
equipment rental business had an average of 2,325 (1,894) employees and the
modular space business 239 (240) employees. At the end of the period, the Group
had 2,758 employees.
The geographical distribution of personnel at the end of the period was as
follows: Finland 31.4 per cent, Sweden 25.7 per cent, Western Europe 13.0 per
cent, and Central and Eastern Europe 29.9 per cent.
The Group, in the normal course of its business, is constantly monitoring and
adjusting its cost base, including its personnel costs.
CHANGES IN MANAGEMENT
Mika Puittinen (38), LL.M., MBA, has been appointed Vice President, Legal
Affairs, and member of the management team at Cramo Plc. Mr. Puittinen will
assume his new duties on 17.11.2008. Before joining Cramo Group, Mr. Puittinen
was employed as Vice President (Legal Affairs) at Perlos Corporation.
PERFORMANCE BY BUSINESS SEGMENT
Cramo Plc's business consists of the two following business segments: equipment
rental and modular space. The equipment rental business segment is also reported
upon by geographic segment as follows: Finland, Sweden, Western Europe (Norway
and Denmark), and Central and Eastern Europe (Estonia, Latvia, Lithuania,
Poland, the Czech Republic, Russia and - from 1 April 2008 - Slovakia). The
Central and Eastern Europe segment was previously called Other Europe.
EQUIPMENT RENTAL
The European Rental Association (ERA) estimated the value of the 2007 equipment
rental market in Finland at around EUR 420 million, in Sweden at EUR 700
million, in Norway at EUR 735 million, in Denmark at EUR 550 million, in Poland
at EUR 200 million, in the Czech Republic at EUR 70 million, in Slovakia at EUR
30 million, in Estonia at EUR 60 million, in Latvia at EUR 60 million, and in
Lithuania at EUR 50 million.
Consolidated sales from Cramo's equipment rental business came to EUR 382.0
(303.6) million in January-September, showing an increase of 25.8 per cent.
Sales by geographical segment were as follows: Finland 17.4 (18.1) per cent,
Sweden 47.2 (50.8) per cent, Western Europe 20.1 (17.9) per cent, and Central
and Eastern Europe 15.1 (13.2) per cent.
EBITA for the equipment rental business amounted to EUR 66.4 (62.6) million,
representing 17.4 (20.6) per cent of sales.
The business segment's major customers operate in the construction sector and
manufacturing industry. In addition, the segment provides services to the public
sector and private customers.
Finland
The Finnish equipment rental business reported sales of EUR 66.4 (54.9) million
for January-September, showing an increase of 21.1 per cent. EBITA totalled EUR
11.7 (10.3) million, or 17.6 (18.8) per cent of sales. Third-quarter sales
totalled EUR 24.9 (21.7) million, and EBITA amounted to EUR 7.0 (5.5) million,
or 28.0 (25.2) per cent of sales.
Sales in the Finnish equipment rental business developed according to plan. The
strong growth in demand nevertheless slowed down in the third quarter, which was
also reflected in the sales for the period. Problems in the availability of
financing due to the global financial crisis have led to several construction
projects being postponed. The demand for equipment rental services continues to
grow faster than the actual equipment rental. While the measures Cramo initiated
in the second quarter to enhance profitability improved profitability in the
third quarter to expected levels, overall profitability in 2008 is expected to
fall slightly short of last year's levels.
On the basis of the forecast published by the Federation of Finnish Construction
Industries (RT) in October, construction is expected to grow by 4.0 per cent in
2008 and decrease by 3.0 per cent in 2009. Residential construction is expected
to grow by 4.5 per cent in 2008 but decrease by four per cent in 2009, as it is
expected that there will be a sharp decline in the number of new housing
construction projects by the end of the year. The number of new commercial
construction projects is also expected to decrease in both 2008 and 2009. The
financial crisis is expected to decrease the level of property investments,
particularly concerning office buildings and partially also commercial
buildings. Civil engineering is expected to grow by three per cent in 2008
particularly due to railroad construction, and to remain at the same level in
2009. Renovation projects, which account for some 40 per cent of all residential
construction, are expected to continue showing a steady growth. RT predicts an
increase of 3.5 per cent in renovation projects in both 2008 and 2009.
Sweden
The Swedish equipment rental business reported sales of EUR 181.3(154.3) million
in January-September, showing an increase of 17.5 per cent. EBITA totalled EUR
40.3 (35.5) million, or 22.2 (22.9) per cent of sales, showing an increase of
14.0 per cent. Third-quarter sales came to EUR 61.2 (55.1) million, and EBITA
amounted to EUR 16.2 (14.2) million, or 26.5 (25.8) per cent of sales.
The demand for rental services continued to grow in Sweden, and the general
economic uncertainty did not yet affect Cramo's business in the third quarter.
The financial performance developed as expected. After the period under review,
the uncertain situation of the financial market has led to several construction
projects being postponed. The continuous growth in construction projects and
civil engineering nevertheless improves the future outlook of the rental market.
The weakening of the Swedish krona in relation to the Euro will reduce the 2008
sales growth as measured in Euros in the fourth quarter. Cramo's strong position
in Sweden offers the company excellent opportunities for succeeding also in the
changed operating environment.
According to the forecast published by the Swedish Construction Federation
(Sveriges Byggindustrier) in October, construction will grow by four per cent in
2008 and by one per cent in 2009. Residential construction is expected to
decrease by two per cent in 2008, while commercial construction is expected to
grow by seven per cent and civil engineering by nine per cent. The estimated
reduction in residential construction for 2009 is four per cent. New residential
construction is expected to decrease by 11 per cent, while a growth of six per
cent is forecast for housing renovation. Public sector investments are expected
to maintain the growth in commercial construction at one per cent in 2009, while
civil engineering is expected to grow by 10 per cent in 2009.
Western Europe
Cramo's equipment rental business in Western Europe consists of its Norwegian
and Danish operations. The comparison figures for the first quarter in 2007 also
include the Dutch business that Cramo divested on 1 April 2007.
In Western Europe, the equipment rental business recorded January-September
sales of EUR 76.7 (54.3) million, showing an increase of 41.2 per cent. Compared
with comparative sales for 2007 excluding the Netherlands, the year-on-year
growth rate was 49.3 per cent. Sales increased based on completed growth
investments and outsourcing. EBITA for January-September amounted to EUR 4.8
(4.8) million, representing 7.6 (10.6) per cent of sales.
Third-quarter sales totalled EUR 27.0 (19.1) million, showing an increase of
41.7 per cent. Third-quarter EBITA amounted to EUR 2.1 (2.0) million, or 7.6
(10.6) per cent of sales.
Sales continued to grow strongly in Norway and Denmark, and Cramo succeeded in
meeting its objective of considerably boosting its market share in both
countries. Sales growth is expected to continue in the fourth quarter. The
measures initiated in the first quarter to enhance profitability have been
successful in Norway. In Denmark the market situation is more challenging than
in Norway, and profitability is likely to improve at a slower rate. In Denmark
the slowdown in construction and the fragmented competition further complicate
the market situation. Cramo has concluded several outsourcing agreements in
Denmark and Norway within the last 12 months that are important with regard to
the development of long-term customer relationships.
According to the forecast published by Euroconstruct in June, construction
growth in Norway will slow down to 0.8 per cent in 2008 and decrease by 1.9 per
cent in 2009. According to its forecast published in October, the Norwegian
Prognosesenteret AS expects new housing starts to decrease by 26 per cent in
2008 and by 25 per cent 2009, but make a sharp upturn in 2010. New commercial
construction is expected to decrease by seven per cent in 2008 and by 18 per
cent in 2009. Renovation projects are expected to remain at the same level in
2008 and grow by one per cent in 2009. Civil engineering is expected to remain
at the previous year's level in 2008 and to increase by six per cent in 2009.
Offshore industry is expected to continue its expansion projects in 2009.
According to the forecast published by Euroconstruct in June, Danish
construction will decrease by 0.7 per cent in 2008 and by 0.5 per cent in 2009.
Residential construction will decrease by some 10 per cent, whereas civil
engineering projects will grow. According to the forecast published by Danmark
Statistik in September, new residential construction in particular will decrease
markedly in 2008 and 2009.
Central and Eastern Europe
Cramo Group's equipment rental business sales in Central and Eastern Europe
(previously Other Europe) come from Estonia, Latvia, Lithuania, Poland, the
Czech Republic and Slovakia and, in Russia, from the St. Petersburg, Moscow and
Yekaterinburg markets.
Rental business sales in Central and Eastern Europe amounted to EUR 57.6 (40.1)
million, showing an increase of 43.7 per cent. EBITA totalled EUR 9.6 (12.1)
million, or 16.7 (30.3) per cent of sales.
Excluding Estonia, Central and Eastern Europe achieved a sales growth of 85 per
cent. Sales were down in Estonia, yet the total combined sales for all Baltic
countries showed an increase of 14 per cent. Russian operations grew by 225 per
cent in January-September. In Poland, the Czech Republic and Slovakia sales were
up 98 per cent. Factors behind the sales growth in Central and Eastern Europe
include a good demand and business expansion both organically and through
acquisitions. In addition, the extensive sales training arranged by Cramo for
its personnel and the related development of key customer relationships also
contributed to the growth.
Third-quarter sales totalled EUR 23.5 (16.3) million, showing an increase of
44.4 per cent. Third-quarter EBITA amounted to EUR 5.2 (5.9) million, or 22.0
(36.2) per cent of sales. New depots were opened in Poland and in the Czech
Republic, whereas some depots were closed in the Baltic countries. The number of
depots at the end of the period was 80.
Profitability was strained by the growth in demand levelling off in the Baltic
countries and stiffer competition. Inflation has reached 15 per cent in Russia
and above 10 per cent in the Baltic countries, increasing personnel expenses and
energy prices in particular. Cramo has adjusted its cost base in all the Baltic
countries to better reflect the new market situation in 2008.
The equipment rental markets in the Baltic countries are slowing down due to a
decline in construction, particularly in residential construction. The outlook
for housing production has taken a turn to a more conservative direction also in
Russia, where signs of increasing demand for equipment rental instead of
equipment purchasing are nevertheless visible. While market outlook remains good
in Poland, the Czech Republic and Slovakia, the impact of economic uncertainty
is visible through delays concerning new projects.
Cramo is preparing for the weakening market situation by enhancing the structure
of its depot network, making adjustments in costs and the number of personnel
and increasing its efforts to optimise the rental fleet between markets. The
main impact will be on the business in the Baltic countries.
Cramo expects to achieve marked sales growth in 2008, although it will probably
remain below the targeted growth rate of 50 per cent. The weakening of several
currencies used in Central and East European countries in relation to the Euro
will decrease the sales growth as measured in Euros in the fourth quarter. While
strong expansion will affect the overall profitability for 2008, Cramo expects
its profitability to remain at a good level. The long-term outlook in the rental
business remains good throughout the Central and East European markets.
According to the forecast published by Buildecon in August 2008, construction
will grow by 11.5 per cent in Russia in 2008 and by 12.0 per cent in 2009.
According to the survey results released by Euroconstruct in June 2008,
construction in Estonia will decrease by seven per cent in 2008 and one per cent
in 2009. The corresponding growth estimates in Latvia are 0 and -2 per cent. In
Lithuania, construction is expected to grow seven per cent in 2008 and one per
cent in 2009. In Poland, where civil engineering projects in particular are
doing well (thanks to EU support), construction is expected to increase by 14.6
per cent in 2008 and 10.7 per cent in 2009. In the Czech Republic, construction
is forecast to grow by 5.3 per cent in 2008 and by 5.4 per cent in 2009.
Euroconstruct forecasts growth figures of 5.9 per cent in 2008 and 4.8 per cent
in 2009 for construction in Slovakia. The forecasts were prepared before the
emergence of the global financial crisis.
MODULAR SPACE
The modular space business recorded January-September sales of EUR 59.1 (54.4)
million. Sales were up 8.8 per cent year on year. Rental operations accounted
for more than 70 per cent of sales. Rental revenue increased over the previous
year's level, whereas the sales revenue was down. EBITA totalled EUR 17.8 (14.0)
million, or 30.0 (25.8) per cent of sales, showing an increase of 26.5 per cent.
Profitability improved clearly from the previous year and was at an excellent
level.
Third-quarter sales came to EUR 20.4 (18.4) million, up by 10.8 per cent.
Third-quarter EBITA amounted to EUR 6.1 (4.9) million, or 30.0 (26.4) per cent
of sales.
Sales and performance continued to develop favourably in the third quarter. Both
utilisation rates and the order book value remained high in the Nordic
countries. The order book continued to strengthen further, particularly in
Finland. Cramo signed several new long-term rental agreements, the most
significant of which concerns day-care centres delivered to the city of Espoo.
Competition for the supply of modular spaces is on the increase, but clear
market growth has kept the price level and profitability good. The overall
economic uncertainty which started in the financial markets is reflected in the
extended decision-making concerning space rental. As part of the decrease in the
level of investments, Cramo will downsize the production of new rental spaces.
In line with its strategy, Cramo aims to increase the share of long-term rental
agreements in proportion to sales operations. The long-term rental agreements of
modular space bring stability to Cramo Group's operations over the business
cycle. Cramo is confident that a portion of the construction projects postponed
due to the credit crunch will be offset by the rental of modular space and that,
despite the overall slowdown in construction, the modular space market will
continue to grow.
The bulk of sales in the modular space business is generated in the Finnish and
Swedish markets. Cramo also operates in Norway and Denmark. While the Finnish
operations involve the rental, sale and manufacture of modular space, the
Swedish, Norwegian and Danish operations cover only their rental and sale.
Modular space refers to highly prefabricated and pre-equipped building modules
that can be moved as space requirements change. The most important applications
include schools, day-care centres and offices, as well as expansion investments
in industry. Similar to equipment rental, the use of modular space is expected
to grow more quickly than construction. The need for modular space is increasing
in all market areas, especially in the public sector.
SALES BY GEOGRAPHIC SEGMENT
Cramo Group's secondary segment reporting format is based on geographic regions.
Finland generated EUR 94.8 (88.1) million or 21.2 (22.7) per cent of the total
consolidated sales, Sweden EUR 207.1 (184.6) million or 46.4 (51.2) per cent,
Western Europe EUR 86.6 (54.3) million or 19.4 (15.1) per cent, and Central and
Eastern Europe EUR 57.7 (40.1) million or 12.9 (11.1) per cent. These figures
include both the equipment rental business and the modular space business.
SHARES AND SHARE CAPITAL
On 30 September 2008, Cramo Plc had a share capital of EUR 24,835,753.09, and
the total number of shares was 30,660.189. There were no changes in the share
capital or the number of shares during the period under review.
CHANGES IN SHAREHOLDINGS
There were no changes in Cramo Plc's ownership base that exceed the flagging
limit in the third quarter.
VALID BOARD AUTHORISATIONS
The Annual General Meeting held on 23 April 2008 authorised the Board of
Directors to repurchase shares in one or several tranches and to decide on their
transfer in one or several tranches. The Board of Directors is also authorised
to decide on a share issue and on issuing option rights, convertible bonds and
other special rights entitling their holder to shares as referred to in Chapter
10, section 1, of the Finnish Limited Liability Companies Act.
The Board also has the authorisation to issue a maximum of 3,000,000 option
rights pertaining to the 2006 option scheme. By 30 September 2008, the Board had
issued a total of 813,000 option rights from the 2006A option scheme and 934,000
option rights from the 2006B option scheme. The number of 2006B option rights
issued in 2008 totalled 30,000.
EVENTS AFTER THE BALANCE SHEET DATE
The company has not announced any significant events after the balance sheet
date.
The information in this Interim Report is based on unaudited figures.
TABLES
This Financial Report has been prepared in accordance with IAS 34: Interim
Financial Reporting. The same accounting policies and definitions of key
financial figures have been adopted as in Cramo Plc's annual financial report
2007.
--------------------------------------------------------------------------------
| CONSOLIDATED BALANCE SHEET | 30.9.08 | 30.9.07 | 31.12.07 |
| (EUR 1,000) | | | |
--------------------------------------------------------------------------------
| ASSETS | | | |
--------------------------------------------------------------------------------
| NON-CURRENT ASSETS | | | |
--------------------------------------------------------------------------------
| Property, plant and equipment | 621,860 | 443,913 | 487,038 |
--------------------------------------------------------------------------------
| Goodwill | 159,390 | 152,088 | 152,367 |
--------------------------------------------------------------------------------
| Other intangible assets | 108,651 | 90,236 | 95,359 |
--------------------------------------------------------------------------------
| Available-for-sale investments | 317 | 334 | 332 |
--------------------------------------------------------------------------------
| Receivables | 5,329 | 1,695 | 3,954 |
--------------------------------------------------------------------------------
| Deferred income tax assets | 9,159 | 4,136 | 2,974 |
--------------------------------------------------------------------------------
| TOTAL NON-CURRENT ASSETS | 904,707 | 692,402 | 742,024 |
--------------------------------------------------------------------------------
| CURRENT ASSETS | | | |
--------------------------------------------------------------------------------
| Inventories | 20,250 | 18,992 | 16,903 |
--------------------------------------------------------------------------------
| Trade and other receivables | 140,982 | 124,515 | 117,548 |
--------------------------------------------------------------------------------
| Cash and cash equivalents | 19,200 | 14,699 | 18,489 |
--------------------------------------------------------------------------------
| TOTAL CURRENT ASSETS | 180,433 | 158,206 | 152,940 |
--------------------------------------------------------------------------------
| TOTAL ASSETS | 1,085,139 | 850,608 | 894,964 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EQUITY AND LIABILITIES | | | |
--------------------------------------------------------------------------------
| EQUITY | | | |
--------------------------------------------------------------------------------
| Share capital | 24,835 | 24,835 | 24,835 |
--------------------------------------------------------------------------------
| Share issue | | | |
--------------------------------------------------------------------------------
| Share premium fund | 186,910 | 186,910 | 186,910 |
--------------------------------------------------------------------------------
| Fair value reserve | 117 | 117 | 117 |
--------------------------------------------------------------------------------
| Hedging fund | 6,877 | 4,347 | 6,334 |
--------------------------------------------------------------------------------
| Translation differences | -8,528 | 2,666 | -1,867 |
--------------------------------------------------------------------------------
| Retained earnings | 138,905 | 103,545 | 117,351 |
--------------------------------------------------------------------------------
| TOTAL EQUITY | 349,116 | 322,420 | 333,680 |
--------------------------------------------------------------------------------
| RESERVES | | | |
--------------------------------------------------------------------------------
| Reserves | 347 | 235 | 363 |
--------------------------------------------------------------------------------
| NON-CURRENT LIABILITIES | | | |
--------------------------------------------------------------------------------
| Deferred income tax liabilities | 73,545 | 62,551 | 62,200 |
--------------------------------------------------------------------------------
| Interest bearing liabilities | 321,064 | 294,168 | 274,087 |
--------------------------------------------------------------------------------
| CURRENT LIABILITIES | | | |
--------------------------------------------------------------------------------
| Trade and other payables | 129,237 | 98,915 | 115,247 |
--------------------------------------------------------------------------------
| Interest bearing liabilities | 211,830 | 72,319 | 109,387 |
--------------------------------------------------------------------------------
| TOTAL LIABILITIES | 735,676 | 527,953 | 560,921 |
--------------------------------------------------------------------------------
| TOTAL EQUITY AND LIABILITIES | 1,085,139 | 850,608 | 894,964 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CONSOLIDATED | 7-9/08 | 7-9/07 | 1-9/08 | 1-9/07 | 1-12/07 |
| INCOME STATEMENT | | | | | |
| 1 January - | | | | | |
| 30 September 2008 | | | | | |
| (EUR 1,000) | | | | | |
--------------------------------------------------------------------------------
| SALES | 155,697 | 128,962 | 436,486 | 352,655 | 496,428 |
--------------------------------------------------------------------------------
| Other operating income | 1,097 | 885 | 9,994 | 7,431 | 7,798 |
--------------------------------------------------------------------------------
| Change in inventories | -536 | 1,332 | 446 | 2,969 | 966 |
| in finished goods and | | | | | |
| in work in progress | | | | | |
--------------------------------------------------------------------------------
| Production for own use | 2,866 | 4,016 | 12,833 | 10,457 | 15,379 |
--------------------------------------------------------------------------------
| Materials and services | -22,793 | -28,551 | -85,116 | -74,873 | -106,396 |
--------------------------------------------------------------------------------
| Employee benefits | -28,769 | -25,732 | -88,951 | -74,434 | -101,608 |
--------------------------------------------------------------------------------
| Depreciation | -22,353 | -16,055 | -62,567 | -45,119 | -62,356 |
--------------------------------------------------------------------------------
| Amortisation on | -1,961 | -997 | -5,085 | -3,106 | -4,119 |
| intangible assets | | | | | |
| resulting from | | | | | |
| acquisitions | | | | | |
--------------------------------------------------------------------------------
| Other operating | -50,995 | -34,121 | -140,816 | -109,267 | -154,248 |
| expenses | | | | | |
--------------------------------------------------------------------------------
| OPERATING PROFIT | 32,255 | 29,739 | 77,225 | 66,713 | 91,844 |
--------------------------------------------------------------------------------
| % of sales | 20.7 | 23.1 | 17.7 | 18.9 | 18.5 |
--------------------------------------------------------------------------------
| Finance costs (net) | -7,739 | -4,288 | -18,300 | -11,437 | -16,036 |
--------------------------------------------------------------------------------
| PROFIT BEFORE TAXES | 24,517 | 25,451 | 58,926 | 55,276 | 75,808 |
--------------------------------------------------------------------------------
| % of sales | 15.7 | 19.7 | 13.5 | 15.7 | 15.3 |
--------------------------------------------------------------------------------
| Income taxes | -6,497 | -6,230 | -17,008 | -12,470 | -18,323 |
--------------------------------------------------------------------------------
| PROFIT FOR THE PERIOD | 18,019 | 19,221 | 41,917 | 42,806 | 57,485 |
--------------------------------------------------------------------------------
| % of sales | 11.6 | 14.9 | 9.6 | 12.1 | 11.6 |
--------------------------------------------------------------------------------
| Earnings per share, | 0.59 | 0.63 | 1.37 | 1.40 | 1.88 |
| undiluted, EUR | | | | | |
--------------------------------------------------------------------------------
| Earnings per share, | 0.59 | 0.62 | 1.37 | 1.38 | 1.87 |
| diluted, EUR | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CHAN | Sha- | Sha- | Share | Fair | Hed- | Trans- | Re- | Total |
| GES | re | re | pre- | va- | ging | lation | tained | |
| IN | ca- | is- | mium | lue | fund | diffe- | ear- | |
| GROU | pi- | sue | | re- | | rence | nings | |
| P'S | tal | | | ser- | | | | |
| EQUI | | | | ve | | | | |
| TY | | | | | | | | |
| (EUR | | | | | | | | |
| 1,00 | | | | | | | | |
| 0) | | | | | | | | |
--------------------------------------------------------------------------------
| Tota | 24,508 | 143 | 185,836 | 117 | 3,301 | 2,818 | 75,521 | 292,244 |
| l | | | | | | | | |
| equi | | | | | | | | |
| ty | | | | | | | | |
| on | | | | | | | | |
| 1.1. | | | | | | | | |
| 2007 | | | | | | | | |
--------------------------------------------------------------------------------
| Tran | | | | | | -152 | -729 | -881 |
| slat | | | | | | | | |
| ion | | | | | | | | |
| diff | | | | | | | | |
| eren | | | | | | | | |
| ce | | | | | | | | |
--------------------------------------------------------------------------------
| Hedg | | | | | 1,046 | | | 1,046 |
| ing | | | | | | | | |
| fund | | | | | | | | |
--------------------------------------------------------------------------------
| Prof | | | | | | | 42,806 | 42,806 |
| it | | | | | | | | |
| for | | | | | | | | |
| the | | | | | | | | |
| peri | | | | | | | | |
| od | | | | | | | | |
--------------------------------------------------------------------------------
| Exer | 327 | -143 | 1,074 | | | | | 1,258 |
| cise | | | | | | | | |
| of | | | | | | | | |
| opti | | | | | | | | |
| ons, | | | | | | | | |
| regi | | | | | | | | |
| ster | | | | | | | | |
| ed | | | | | | | | |
--------------------------------------------------------------------------------
| Divi | | | | | | | -15,326 | -15,326 |
| dend | | | | | | | | |
| dist | | | | | | | | |
| ribu | | | | | | | | |
| tion | | | | | | | | |
--------------------------------------------------------------------------------
| Shar | | | | | | | 1,273 | 1,273 |
| e | | | | | | | | |
| base | | | | | | | | |
| d | | | | | | | | |
| paym | | | | | | | | |
| ents | | | | | | | | |
--------------------------------------------------------------------------------
| Tota | 24,835 | 0 | 186,910 | 117 | 4,347 | 2,666 | 103,545 | 322,420 |
| l | | | | | | | | |
| equi | | | | | | | | |
| ty | | | | | | | | |
| on | | | | | | | | |
| 30.9 | | | | | | | | |
| . | | | | | | | | |
| 2007 | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Tota | 24,835 | 0 | 186,910 | 117 | 6,334 | -1,867 | 117,351 | 333,680 |
| l | | | | | | | | |
| equi | | | | | | | | |
| ty | | | | | | | | |
| on | | | | | | | | |
| 1.1. | | | | | | | | |
| 2008 | | | | | | | | |
--------------------------------------------------------------------------------
| Tran | | | | | | -6,661 | -2,708 | -9,369 |
| slat | | | | | | | | |
| ion | | | | | | | | |
| diff | | | | | | | | |
| eren | | | | | | | | |
| ce | | | | | | | | |
--------------------------------------------------------------------------------
| Hedg | | | | | 543 | | | 543 |
| ing | | | | | | | | |
| fund | | | | | | | | |
--------------------------------------------------------------------------------
| Prof | | | | | | | 41,917 | 41,917 |
| it | | | | | | | | |
| for | | | | | | | | |
| the | | | | | | | | |
| peri | | | | | | | | |
| od | | | | | | | | |
--------------------------------------------------------------------------------
| Divi | | | | | | | -19,929 | -19,929 |
| dend | | | | | | | | |
| dist | | | | | | | | |
| ribu | | | | | | | | |
| tion | | | | | | | | |
--------------------------------------------------------------------------------
| Shar | | | | | | | 2,274 | 2,274 |
| e | | | | | | | | |
| base | | | | | | | | |
| d | | | | | | | | |
| paym | | | | | | | | |
| ents | | | | | | | | |
--------------------------------------------------------------------------------
| Tota | 24,835 | 0 | 186,910 | 117 | 6,877 | -8,528 | 138,905 | 349,116 |
| l | | | | | | | | |
| equi | | | | | | | | |
| ty | | | | | | | | |
| on | | | | | | | | |
| 30.6 | | | | | | | | |
| . | | | | | | | | |
| 2008 | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CONSOLIDATED CASH FLOW STATEMENT | 1-9/08 | 1-9/07 | 1-12/07 |
| (EUR 1,000) | | | |
--------------------------------------------------------------------------------
| CASH FLOW FROM OPERATING | 78,373 | 78,243 | 138,653 |
| ACTIVITIES | | | |
--------------------------------------------------------------------------------
| CASH FLOW FROM INVESTING | -187,215 | -113,111 | -175,234 |
| ACTIVITIES | | | |
--------------------------------------------------------------------------------
| CASH FLOW FROM FINANCING | | | |
| ACTIVITIES | | | |
--------------------------------------------------------------------------------
| Proceeds from issue of share | | 1,258 | 1,258 |
| capital | | | |
--------------------------------------------------------------------------------
| Dividends paid | -19,929 | -15,326 | -15,326 |
--------------------------------------------------------------------------------
| Increase(+)/decrease(-) in | 101,698 | 29,317 | 34,393 |
| liabilities | | | |
--------------------------------------------------------------------------------
| Increase(+)/decrease(-) in lease | 28,120 | -7,783 | -6,590 |
| liabilities | | | |
--------------------------------------------------------------------------------
| CASH FLOW FROM FINANCING | 109,889 | 7,466 | 13,735 |
| ACTIVITIES, TOTAL | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| NET CHANGE IN CASH AND CASH | 1,047 | -27,402 | -22,846 |
| EQUIVALENTS | | | |
--------------------------------------------------------------------------------
| CASH AND CASH EQUIVALENTS AT | 18,489 | 41,823 | 41,823 |
| PERIOD-START | | | |
--------------------------------------------------------------------------------
| Translation difference | -336 | 278 | -488 |
--------------------------------------------------------------------------------
| CASH AND CASH EQUIVALENTS AT | 19,200 | 14,699 | 18,489 |
| PERIOD-END | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CONTINGENT LIABILITIES | 30.9.08 | 30.9.07 | 31.12.07 |
| (EUR 1,000) | | | |
--------------------------------------------------------------------------------
| On own behalf | | | |
--------------------------------------------------------------------------------
| Mortgages on real estates | 0 | 5,633 | 5,663 |
--------------------------------------------------------------------------------
| Mortgages on companies | 83,317 | 77,487 | 77,489 |
--------------------------------------------------------------------------------
| Pledges | 80,156 | 107,212 | 159,759 |
--------------------------------------------------------------------------------
| Other contingent liabilities | 8,090 | 10,084 | 9,541 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| DERIVATIVE | 30.9.08 | 30.9.08 | 30.9.07 | 30.9.07 | 31.12.07 | 31.12.07 |
| FINANCIAL | | | | | | |
| INSTRUMENTS | | | | | | |
| (EUR 1,000) | | | | | | |
--------------------------------------------------------------------------------
| | NV | FV | NV | FV | NV | FV |
--------------------------------------------------------------------------------
| NV = nominal | | | | | | |
| value | | | | | | |
--------------------------------------------------------------------------------
| FV = fair | | | | | | |
| value | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Interest rate | | | | | | |
| derivatives | | | | | | |
--------------------------------------------------------------------------------
| Swaps | 130,142 | 4,768 | 140,546 | 5,874 | 138,395 | 5,492 |
--------------------------------------------------------------------------------
| Options | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Foreign | | | | | | |
| exchange | | | | | | |
| contracts | | | | | | |
--------------------------------------------------------------------------------
| Forwards and | 167,334 | 1,422 | 64,160 | -1,247 | 87,150 | -194 |
| swaps | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| KEY FIGURES | 30.9.08 | 30.9.07 | Change % | 31.12.07 |
--------------------------------------------------------------------------------
| Value of outstanding orders | 111,866 | 88,892 | 25.8 | 94,559 |
| for modular space, EUR 1,000 | | | | |
--------------------------------------------------------------------------------
| Value of orders for modular | 105,260 | 83,389 | 26.2 | 89,250 |
| space rental, EUR 1,000 | | | | |
--------------------------------------------------------------------------------
| Value of orders for sale of | 6,606 | 5,503 | 20.0 | 5,309 |
| modular space, EUR 1,000 | | | | |
--------------------------------------------------------------------------------
| Gross capital expenditure, | 169,270 | 124,711 | 35.7 | 175,494 |
| EUR 1,000 | | | | |
--------------------------------------------------------------------------------
| % sales | 38.8 | 35.4 | | 35.4 |
--------------------------------------------------------------------------------
| Average personnel | 2,564 | 2,134 | 20.1 | 2,070 |
--------------------------------------------------------------------------------
| Earnings per share (EPS) | 1.53 | 1.48 | 3.8 | 2.00 |
| before amortisation of | | | | |
| intangible assets resulting | | | | |
| from acquisitions, diluted, | | | | |
| EUR | | | | |
--------------------------------------------------------------------------------
| Earnings per share, | 1.37 | 1.40 | -2.1 | 1.88 |
| undiluted, EUR | | | | |
--------------------------------------------------------------------------------
| Earnings per share, diluted | 1.37 | 1.38 | -0.7 | 1.87 |
| 1), EUR | | | | |
--------------------------------------------------------------------------------
| Shareholders' equity per | 11.39 | 10.52 | 8.3 | 10.88 |
| share 2), EUR | | | | |
--------------------------------------------------------------------------------
| Equity ratio, % | 32.4 | 38.2 | | 37.3 |
--------------------------------------------------------------------------------
| Net interest-bearing | 513,694 | 351,788 | 46.0 | 364,985 |
| liabilities, EUR 1,000 | | | | |
--------------------------------------------------------------------------------
| Gearing, % | 147.1 | 109.1 | | 109.4 |
--------------------------------------------------------------------------------
| Issue-adjusted average | 30,660,18 | 30,561,32 | 0.3 | 30,586,04 |
| number of shares | 9 | 3 | | 0 |
--------------------------------------------------------------------------------
| Issue-adjusted number of | 30,660,18 | 30,660,18 | 0.0 | 30,660,18 |
| shares at the period-end | 9 | 9 | | 9 |
--------------------------------------------------------------------------------
| Number of shares adjusted by | 30,660,18 | 31,018,85 | -1.2 | 30,815,56 |
| the dilution effect of share | 9 | 6 | | 0 |
| options | | | | |
--------------------------------------------------------------------------------
1) Adjusted by the dilution effect of shares entitled by warrants
2) Number of shares registered at the end of the period
INFORMATION BY BUSINESS SEGMENT (EUR 1,000)
The Group's primary segments comprise the equipment rental business and the
modular space business. The secondary, geographic segments consist of Finland,
Sweden, Western Europe and Central and Eastern Europe. The equipment rental
business' sales are also stated by geographic segment.
--------------------------------------------------------------------------------
| Sales by business segment, | 7-9/08 | 7-9/07 | 1-9/08 | 1-9/07 | 1-12/07 |
| (EUR 1,000) | | | | | |
--------------------------------------------------------------------------------
| Equipment rental | | | | | |
--------------------------------------------------------------------------------
| - Finland | 24,947 | 21,733 | 66,415 | 54,864 | 75,761 |
--------------------------------------------------------------------------------
| - Sweden | 61,242 | 55,138 | 181,298 | 154,338 | 214,515 |
--------------------------------------------------------------------------------
| - Western Europe | 26,999 | 19,053 | 76,732 | 54,345 | 77,462 |
--------------------------------------------------------------------------------
| - Central and Eastern | 23,476 | 16,263 | 57,578 | 40,081 | 58,202 |
| Europe | | | | | |
--------------------------------------------------------------------------------
| Equipment rental, total | 136,66 | 112,187 | 382,023 | 303,628 | 425,940 |
| | 6 | | | | |
--------------------------------------------------------------------------------
| - between the segments | -96 | -35 | -206 | -133 | -227 |
--------------------------------------------------------------------------------
| Modular space | 20,367 | 18,376 | 59,143 | 54,350 | 76,733 |
--------------------------------------------------------------------------------
| - between the segments | -1,239 | -1,567 | -4,473 | -5,190 | -6,017 |
--------------------------------------------------------------------------------
| Eliminations | -1,335 | -1,602 | -4,679 | -5,323 | -6,244 |
--------------------------------------------------------------------------------
| Sales, total | 155,69 | 128,962 | 436,486 | 352,655 | 496,428 |
| | 7 | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Netherlands' share of | 0 | 0 | 0 | 2,954 | 2,954 |
| Western Europe | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating profit (EBITA) | 7-9/08 | 7-9/07 | 1-9/08 | 1-9/07 | 1-12/07 |
| before amortisation on | | | | | |
| intangible assets resulting | | | | | |
| from acquisitions by | | | | | |
| business segment, | | | | | |
| (EUR 1,000) | | | | | |
--------------------------------------------------------------------------------
| Equipment rental | | | | | |
--------------------------------------------------------------------------------
| - Finland | 6,983 | 5,478 | 11,692 | 10,336 | 14,493 |
--------------------------------------------------------------------------------
| - Sweden | 16,214 | 14,248 | 40,288 | 35,343 | 47,952 |
--------------------------------------------------------------------------------
| - Western Europe | 2,064 | 2,028 | 4,749 | 4,777 | 6,487 |
--------------------------------------------------------------------------------
| - Central and Eastern | 5,159 | 5,887 | 9,638 | 12,146 | 17,082 |
| Europe | | | | | |
--------------------------------------------------------------------------------
| Equipment rental, total | 30,421 | 27,642 | 66,368 | 62,602 | 86,014 |
--------------------------------------------------------------------------------
| Modular space | 6,110 | 4,851 | 17,767 | 14,047 | 19,358 |
--------------------------------------------------------------------------------
| | 0 | 0 | 6,025 | 4,026 | 4,026 |
--------------------------------------------------------------------------------
| Non-allocated Group | -2,138 | -1,552 | -7,068 | -10,327 | -12,859 |
| activities | | | | | |
--------------------------------------------------------------------------------
| Eliminations | -177 | -204 | -782 | -529 | -576 |
--------------------------------------------------------------------------------
| Operating profit, total | 34,215 | 30,736 | 82,310 | 69,819 | 95,963 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Netherlands' share of | 0 | 0 | 0 | 193 | 193 |
| Western Europe | | | | | |
--------------------------------------------------------------------------------
Non-allocated Group activities include expenses resulting from Group management
and Group finance and control, as well as other Group-level expenses related to
projects. Non-allocated capital gains include the capital gain from the
divestment of Dutch operations, EUR 4.0 million in 2007, as well as the capital
gain from the sale of property in Finland, EUR 6.0 million in 2008. The 2007
operating profit for Western Europe includes the operative result of the Dutch
operations, EUR 193 thousand, from the first quarter of 2007.
--------------------------------------------------------------------------------
| EBITA-% by business | 7-9/08 | 7-9/07 | 1-9/08 | 1-9/07 | 1-12/07 |
| segment | | | | | |
--------------------------------------------------------------------------------
| Equipment rental | | | | | |
--------------------------------------------------------------------------------
| - Finland | 28.0 | 25.2 | 17.6 | 18.8 | 19.1 |
--------------------------------------------------------------------------------
| - Sweden | 26.5 | 25.8 | 22.2 | 22.9 | 22.4 |
--------------------------------------------------------------------------------
| - Western Europe | 7.6 | 10.6 | 6.2 | 8.8 | 8.4 |
--------------------------------------------------------------------------------
| - Central and Eastern | 22.0 | 36.2 | 16.7 | 30.3 | 29.3 |
| Europe | | | | | |
--------------------------------------------------------------------------------
| Equipment rental, total | 22.3 | 24.6 | 17.4 | 20.6 | 20.2 |
--------------------------------------------------------------------------------
| Modular space | 30.0 | 26.4 | 30.0 | 25.8 | 25.2 |
--------------------------------------------------------------------------------
| Non-allocated Group | | | | | |
| activities | | | | | |
--------------------------------------------------------------------------------
| EBITA-%, total | 22.0 | 23.8 | 18.9 | 19.8 | 19.3 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Sales by geographical | 7-9/08 | 7-9/07 | 1-9/08 | 1-9/07 | 1-12/07 |
| segment (EUR 1,000); sales | | | | | |
| generated by both the | | | | | |
| equipment rental business | | | | | |
| and the modular space | | | | | |
| business are included in | | | | | |
| the geographical segments. | | | | | |
--------------------------------------------------------------------------------
| Finland | 34,004 | 29,613 | 94,792 | 81,799 | 113,416 |
--------------------------------------------------------------------------------
| Sweden | 70,652 | 65,741 | 207,128 | 184,578 | 248,456 |
--------------------------------------------------------------------------------
| Western Europe | 30,056 | 19,053 | 86,587 | 54,345 | 85,177 |
--------------------------------------------------------------------------------
| Other Europe | 23,574 | 16,263 | 57,672 | 40,081 | 58,278 |
--------------------------------------------------------------------------------
| Eliminations | -2,590 | -1,709 | -9,693 | -8,148 | -8,897 |
--------------------------------------------------------------------------------
| Sales, total | 155,69 | 128,962 | 436,486 | 352,655 | 496,428 |
| | 7 | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Netherlands' share of | 0 | 0 | 0 | 2,954 | 2,954 |
| Western Europe | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| FINANCIAL | 7-9/08 | 4-6/08 | 1-3/08 | 10-12/07 | 10/07- | 1-12/07 |
| PER- | | | | | 9/08 | |
| FORMANCE BY | | | | | | |
| QUARTERS | | | | | | |
--------------------------------------------------------------------------------
| Sales | 155,697 | 154,015 | 126,774 | 143,773 | 580,259 | 496,428 |
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| EBITA | 34,215 | 30,679 | 17,416 | 26,144 | 108,454 | 95,963 |
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| EBITA-% | 22.0 | 19.9 | 13.7 | 18.2 | 18.7 | 19.3 |
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LARGEST SHAREHOLDERS
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| 10 Largest shareholders 30.9.08 | Shares | % |
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| 1 | Suomi Mutual Life Assurance Company | 2,510,176 | 8.19 |
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| 2 | Rakennusmestarien Säätiö (Construction | 1,862,620 | 6.08 |
| | Engineers' Fund) | | |
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| 3 | Varma Mutual Pension Insurance Company | 1,302,607 | 4.25 |
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| 4 | Ilmarinen Mutual Pension Insurance | 687,256 | 2.24 |
| | Company | | |
--------------------------------------------------------------------------------
| 5 | Odin Finland | 528,864 | 1.72 |
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| 6 | Thominvest Oy | 420,340 | 1.37 |
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| 7 | Local Government Pension Institution | 412,184 | 1.34 |
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| 8 | Rakennusmestarit Ja -Insinöörit Amk | 300,938 | 0.98 |
| | Rkl | | |
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| 9 | Laakkonen Mikko | 280,000 | 0.91 |
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| 10 | Esr Eq Pikkujättiläiset | 200,000 | 0.65 |
--------------------------------------------------------------------------------
| | 10 largest shareholders total | 8,504,985 | 27.74 |
--------------------------------------------------------------------------------
| | Nominee registered | 8,494,814 | 27.71 |
| | -UBS AG London Branch/UBS AG | | >5.00 |
| | (Switzerland)* | | |
--------------------------------------------------------------------------------
| | Others | 13,660,390 | 44.55 |
--------------------------------------------------------------------------------
| | Total | 30,660,189 | 100.0 |
--------------------------------------------------------------------------------
* Flagging on 5 June 2008
RELATED PARTY TRANSACTIONS
During the period under review, there were no material transactions with related
parties.
BRIEFING
Cramo will hold a briefing and a live webcast in the conference room of the
Palace Gourmet restaurant, Eteläranta 10, Helsinki, on Tuesday, 11 November
2008, at 11:00 a.m. 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 11 November 2008 in the
afternoon.
PUBLICATION OF FINANCIAL INFORMATION 2009
Cramo Plc's Financial Statements Bulletin for 2008 will be published on
Wednesday, 11 February 2009.
The 2008 Annual Report will be published in electronic format in week 10/2009.
The 2009 Annual General Meeting will take place on Thursday, 26 March 2009 in
Helsinki.
Cramo will publish three interim reports in 2009.
The January-March Interim Report will be published on Wednesday, 6 May 2009.
The January-June Interim Report will be published on Thursday, 6 August 2009.
The January-September Interim Report will be published on Tuesday, 3 November
2009.
The information in this Interim Report is based on unaudited figures.
CRAMO PLC
Vesa Koivula
President and CEO
tel. +358 10 66110, +358 40 510 5710
Martti Ala-Härkönen
CFO
tel. +358 10 66110, +358 40 737 6633
DISCLAIMER
This report includes certain forward-looking statements based on the
management's expectations when they are made. These involve risks and
uncertainties and are subject to change due to changes in general economic and
industry conditions.
DISTRIBUTION
NASDAQ OMX Helsinki
Principal media
www.cramo.com
Cramo's performance in line with targets - interim report for January-September 2008
| Source: Cramo Oyj
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