Vantaa, Finland, 2013-10-30 08:00 CET (GLOBE NEWSWIRE) -- Cramo Plc Interim Report 30 October 2013, at 9.00 am Finnish time (GMT+2)
Cramo’s Interim Report 1 January–30 September 2013
Improving profitability, strong cash flow
1–9/2013 (year-on-year comparison in brackets):
- Sales EUR 482.2 (503.8) million; the change was -4.3%. Sales change excluding divested operations and restructuring in Russia -2.0%
- EBITA EUR 55.2 (56.1) million and EBITA margin 11.4% (11.1%); comparable EBITA excluding non-recurring items EUR 55.7 (53.9) million, or 11.6 (10.7) per cent of sales
- Earnings per share EUR 0.63 (0.59); comparable earnings per share excluding the effect of non-recurring items EUR 0.68 (0.54)
- Return on equity (rolling 12 months) 8.0% (7.0%)
- Cash flow after investments EUR 15.9 (24.5) million, investment cash flow includes acquisitions totalling EUR 26.2 million
- Gearing 82.9% (74.3%), EUR 50 million hybrid bond redeemed on 29 April 2013
7–9/2013 (year-on-year comparison in brackets):
- Sales EUR 173.6 (182.4) million; the change was -4.8%. For comparable business units, in local currencies, sales was up by 2.5%
- EBITA EUR 32.3 (31.2) million and EBITA margin 18.6% (17.1%)
- Earnings per share EUR 0.48 (0.44)
- Cash flow after investments EUR 26.4 (6.4) million
Guidance for 2013: In 2013, the Group’s sales will be lower than in 2012. However, the Group’s business demonstrates a good continuity over time. In 2013, already implemented and on-going efficiency measures will yield an improvement in EBITA margin percentage compared with the previous year.
| KEY FIGURES AND RATIOS (MEUR) | 7-9/13 | 7-9/12 | Change % | 1-9/13 | 1-9/12 | Change % | 1-12/12 |
| Income statement | |||||||
| Sales | 173.6 | 182.4 | -4.8 % | 482.2 | 503.8 | -4.3 % | 688.4 |
| EBITDA | 55.7 | 57.6 | -3.3 % | 125.6 | 133.4 | -5.8 % | 179.6 |
| EBITA 1), 2) | 32.3 | 31.2 | 3.6 % | 55.2 | 56.1 | -1.6 % | 78.0 |
| % of sales | 18.6% | 17.1% | 11.4% | 11.1 % | 11.3% | ||
| Operating profit (EBIT) 1) | 29.8 | 28.2 | 5.6 % | 45.0 | 47.2 | -4.7 % | 64.5 |
| Profit before tax (EBT) 3) | 26.1 | 23.7 | 10.0 % | 33.9 | 32.2 | 5.3 % | 44.3 |
| Profit for the period 3) | 20.4 | 18.1 | 12.7 % | 26.5 | 24.5 | 7.9 % | 38.7 |
| Share related information | |||||||
| Earnings per share (EPS), EUR 3) | 0.48 | 0.44 | 10.5 % | 0.63 | 0.59 | 5.5 % | 0.94 |
| Earnings per share (EPS), diluted, EUR 3) | 0.48 | 0.43 | 10.0 % | 0.62 | 0.59 | 5.3 % | 0.93 |
| Shareholders’ equity per share, EUR 4) | 11.49 | 11.41 | 0.7 % | 11.58 | |||
| Other information | |||||||
| Return on investment, % 5), 6) | 6.8 % | 7.0 % | 7.3 % | ||||
| Return on equity, % 5), 6) | 8.0 % | 7.0 % | 7.5 % | ||||
| Equity ratio, % 4), 5) | 44.3 % | 45.7 % | 48.6 % | ||||
| Gearing, % 4), 5) | 82.9 % | 74.3 % | 65.1 % | ||||
| Net interest-bearing liabilities 4), 5) | 402.4 | 388.0 | 3.7 % | 346.9 | |||
| Gross capital expenditure (incl. acquisitions) | 31.1 | 34.4 | -9.4 % | 98.9 | 99.4 | -0.6 % | 125.1 |
| of which acquisition/business combinations | -0.8 | 0.8 | 29.6 | 0.8 | 0.8 | ||
| Cash flow after investments | 26.4 | 6.4 | 314.7 % | 15.9 | 24.5 | -35.3 % | 62.2 |
| Average number of personnel (FTE) | 2,465 | 2,686 | -8.2 % | 2,664 | |||
| Number of personnel at period end (FTE) | 2,479 | 2,669 | -7.1 % | 2,555 | |||
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1) Effective from the Q1 2013 reporting the share of profit / loss of joint ventures has been moved to be presented above EBITA. Due to retrospective application of the change in accounting policy, EBITA and operating profit (EBIT) for the comparative periods 1-9/12 and 1-12/12 have been adjusted |
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| 2) EBITA is operating profit before amortisation and impairment resulting from acquisitions and disposals | |||||||
| 3) Based on the revised IAS 19 standard Employee benefits, effective from January 1, 2013, actuarial gains and losses resulting from the changes in assumptions used in the valuation of pension liabilities are recognised immediately in other operating income. Due to retrospective application the finance costs for 1-12/12 have been decreased by EUR 0.2 million | |||||||
| 4) Comparative figures for 1-9/12 include an adjustment regarding non-current interest-bearing liabilities, which was made retrospectively in the Q4 2012 reporting. As a result, non-current interest-bearing liabilities have increased by EUR 1.0 million and retained earnings decreased by EUR 1.0 million | |||||||
| 5) Full year 2012 key figures have been calculated before reclassification of Russian business as assets and liabilities to be transferred to joint venture according to IFRS 5 | |||||||
| 6) Rolling 12 month | |||||||
CEO VESA KOIVULA'S COMMENT
“In this year’s challenging market situation, we have continued our strategy of rolling out a uniform business model. We have also put a heavy emphasis on operational efficiency. Together with cost savings and those efficiency measures completed earlier, we improved our profitability in the third quarter.
We will keep our cost level low for further profitability as markets improve and sales increase. We will specifically emphasise improvements in Norway, Denmark and Central Europe, but we will also keep a keen eye on all our other markets. Development this year shows that we are on the right track.
We have already seen the first signs of increasing demand for equipment rental. Market forecasts for 2014 support a cautious optimism for many markets. Rental services, however, is a post-cyclical sector.
I am happy to report that our strategy work has proceeded well in all Cramo countries and that our personnel and customers have welcomed the changes. This will strengthen our competitiveness both in the near future and in the long term,” says Vesa Koivula, President and CEO of Cramo Group.
SUMMARY OF FINANCIAL PERFORMANCE IN JANUARY–SEPTEMBER 2013
For January–September 2013, Cramo Group’s consolidated sales were EUR 482.2 (503.8) million, showing a decrease of 4.3 per cent. In local currencies, sales decreased by 4.7 per cent. Sales were weakened by the divestment of Cramo’s modular space production and customised space rental businesses in Finland in March 2012 as well as by the transfer of the Russian operations to a joint venture on 1 March 2013. The change in sales for January–September excluding divested operations and restructuring in Russia was -2.0 per cent.
Sales for the third quarter were EUR 173.6 (182.4) million, showing a change of -4.8 per cent. Changes in foreign exchange rates had a negative impact on eurobased sales. In local currencies, sales decreased by 2.7 per cent. In the comparison period, the third quarter of 2012, sales were increased as a result of approximately EUR 4.7 million of deliveries to the Copenhagen metro project in Denmark related to modular space sales and rental compared to deliveries in the third quarter of 2013. Sales change in local currencies in the third quarter excluding the effect of these deliveries was -0.2 per cent. Comparable sales in local currencies increased in the third quarter by 2.5 per cent, when the effect of the restructuring in Russia is also taken into account. Sales is also affected by the rationalisation of the depot network in Denmark in the end of 2012.
EBITA for January–September was EUR 55.2 (56.1) million, or 11.4 (11.1) per cent of sales. Comparable EBITA excluding non-recurring items was EUR 55.7 (53.9) million, or 11.6 (10.7) per cent of sales. The improvement in profitability that started in the second quarter continued. Third-quarter EBITA was EUR 32.3 (31.2) million, or 18.6 (17.1) per cent of sales. The result was improved by successfully implemented cost savings and other efficiency measures. The implementation of Cramo’s strategy has also improved profitability.
In January–September, earnings per share were EUR 0.63 (0.59) and comparable earnings per share excluding the effect of non-recurring items EUR 0.68 (0.54). Earnings per share for the third quarter improved and were EUR 0.48 (0.44).
During the third quarter, profitability improved in Sweden and Eastern Europe. A good result was achieved in Finland, Sweden and Eastern Europe. Unlike in Finland, the market situation in Sweden improved in the third quarter. In Eastern Europe, profitability was good in the Baltic countries and Poland and satisfactory in the Czech Republic and Slovakia, in addition to which the Russian joint venture Fortrent’s result improved profitability. Norway and Central Europe achieved a satisfactory and Denmark a positive result in the period, and the measures to improve profitability in these countries continue. In Central Europe, Cramo’s transition program proceeded as planned. In the modular space business, demand has continued at a high level in all Nordic countries.
In January–September, cash flow from operating activities was EUR 94.0 (87.8) million, gross capital expenditure was EUR 98.9 (99.4) million and net cash flow from investing activities EUR -78.1 (-63.3) million. Gross capital expenditure includes acquisitions and business combinations completed in the first quarter that amounted to EUR 29.6 million, which had EUR -26.2 million cash flow effect. Cash flow after investments was EUR 15.9 (24.5) million. The improvement in cash flow that started in the second quarter continued. In the third quarter, cash flow after investments was strong at EUR 26.4 (6.4) million.
The Group’s gearing was 82.9 (74.3) per cent at the end of September. Gearing improved clearly compared with the previous quarter. During the first half of the year, gearing was affected by the acquisitions completed during the first quarter and the redemption of the EUR 50 million hybrid bond in April.
MARKET OUTLOOK
During the summer and autumn, economic uncertainty in Europe has turned into a steadier development. Demand for equipment rental services developed satisfactorily in many of Cramo’s market areas during the third quarter. The economies in the Eurozone are estimated to take an upward turn in 2014.
There are still considerable differences among European markets related to construction activity and demand for rental services. In its June forecast, the construction market analyst Euroconstruct estimates 2013 construction activity to decline in Finland, Sweden, Poland, Estonia, the Czech Republic and Slovakia. According to Euroconstruct, growth can be expected this year in Norway, Denmark, Germany, Latvia, Lithuania and Russia. Forecasts for 2014 indicate a certain growth in most markets.
In the long run, the equipment rental market normally grows faster than the underlying construction market. Changes in demand usually follow those in construction with a certain delay and may be strong. In addition to construction activity, other factors affecting demand for equipment rental include industrial investments and the increase in penetration rate for rentals. According to a forecast published by European Rental Association (ERA) in October, equipment rental will increase in 2013 in Sweden, Norway and Germany, but will decrease in Finland, Denmark and Poland. In 2014, ERA predicts equipment rental to grow in all of Cramo’s main market areas.
(All construction market forecasts presented in this review are estimates by Euroconstruct, unless otherwise stated.)
GUIDANCE ON GROUP OUTLOOK
Cramo Plc gave a more specific guidance for 2013 on 21 October 2013. The new specific guidance was: ”In 2013, the Group’s sales will be lower than in 2012. However, the Group’s business demonstrates a good continuity over time. In 2013, already implemented and on-going efficiency measures will yield an improvement in EBITA margin percentage compared with the previous year.”
Cramo Plc’s previous guidance was: “Referring to the market outlook, which pictures high uncertainty in Cramo’s market areas, the Board does not consider it prudent to give a guidance on Group sales either growing or declining in 2013. However, the Group’s business demonstrates a good continuity over time. In 2013, already implemented and on-going efficiency measures are likely to yield an improvement in EBITA margin percentage compared with the previous year.”
BRIEFING
Cramo will hold a briefing and a live webcast at Kämp Kansallissali, address: Aleksanterinkatu 44 A, 2nd floor, Helsinki, on Wednesday, 30 October 2013 at 11.00 am. The briefing will be in English.
To watch the briefing live on the Internet, go to www.cramo.com. A replay of the webcast will be available at www.cramo.com from 30 October 2013 in the afternoon.
PUBLICATION OF FINANCIAL INFORMATION 2014
Cramo Plc’s Financial Statements Bulletin for 2013 will be published on Wednesday, 12 February 2014.
The Annual Report containing the full financial statements for 2013 will be published in electronic format in week 10/2014.
The 2014 Annual General Meeting will take place on Tuesday, 1 April 2014, in Helsinki.
In 2014, Cramo Plc will publish three Interim Reports:
The Interim Report for 1–3/2014 will be published on 8 May 2014
The Interim Report for 1–6/2014 on 6 August 2014
The Interim Report for 1–9/2014 on 29 October 2014
CRAMO PLC
Vesa Koivula
President and CEO
Further information:
Vesa Koivula, President and CEO, tel. 040 510 5710
Martti Ala-Härkönen, CFO, tel. +358 40 737 6633
Distribution
NASDAQ OMX Helsinki Oy
Major media
www.cramo.com
Cramo is one of the largest equipment rental service companies in Europe, specialising in construction machinery and equipment rental and rental-related services as well as the rental of modular space. Cramo operates in fifteen countries with 400 depots. With a group staff around 2.550, Cramo's consolidated sales in 2012 was EUR 690 million. Cramo shares are listed on the NASDAQ OMX Helsinki Ltd. Further information: www.cramo.com
