Cramo Plc’s Interim Report January–March 2014

Performance started improving at the end of the quarter

| Source: Cramo Oyj

Vantaa, Finland, 2014-05-08 08:00 CEST (GLOBE NEWSWIRE) -- Cramo Plc   Interim Report 8 May 2014, at 9.00 am Finnish time (GMT+2)

Cramo Plc’s Interim Report January–March 2014 

Performance started improving at the end of the quarter

1–3/2014 highlights (year-on-year comparison in brackets):

  • Sales EUR 140.3 (148.5) million; the change was -5,6%. Sales change in local currencies, excluding restructuring in Russia, was +0,8%
  • EBITA EUR 4.4 (6.4) million, EBITA margin 3.1% (4.3%) 
  • Earnings per share EUR -0.03 (-0.04)
  • Return on equity (rolling 12 months) 8.5% (6.9%)
  • Cash flow after investments EUR -10.7 (-18.9) million
  • Gearing 76.3% (69.7%)
  • After the review period, expansion into the German modular space market through the acquisition of C/S RaumCenter in April
  • After the review period, the construction machinery rental business in Finland was strengthened through the acquisition of OptiRent in April

Guidance for 2014 unchanged: In 2014, Cramo Group’s EBITA margin will continue to improve compared to 2013. Cramo Group’s  sales is also expected to grow in 2014, however, exact sales is exposed to changing exchange rates.

KEY FIGURES AND RATIOS (MEUR) 1-3/14 1-3/13 Change % 1-12/13
Income statement        
Sales 140.3 148.5 -5.6 % 657.3
EBITDA 27.8 29.7 -6.4 % 173.8
EBITA 1) 4.4 6.4 -31.4 % 79.9
% of sales 3.1% 4.3%   12.2%
Operating profit (EBIT) 1.8 1.7 7.2 % 66.8
Profit / loss before taxes (EBT) -1.6 -2.3 29.5 % 51.9
Profit / loss for the period -1.3 -1.8 29.5 % 42.8
Share related information        
Earnings per share (EPS), EUR -0.03 -0.04 31.5 % 1.01
Earnings per share (EPS), diluted, EUR -0.03 -0.04 32.2 % 1.00
Shareholders’ equity per share, EUR 11.36 11.22 1.3 % 11.56
Other information        
Return on investment, % 2) 7.6 % 6.7 %   7.7 %
Return on equity, % 2) 8.5 % 6.9 %   8.3 %
Equity ratio, % 46.5 % 46.6 %   47.1 %
Gearing, % 76.3 % 69.7 %   72.9 %
Net interest-bearing liabilities 375.5 364.9 2.9 % 364.8
Gross capital expenditure (incl. acquisitions) 27.3 46.2 -40.8 % 129.6
of which acquisitions/business combinations   31.2 -100.0 % 29.1
Cash flow from operating activities 8.1 17.9 -54.9 % 160.3
Cash flow after investments -10.7 -18.9 43.3 % 50.3
Average number of personnel (FTE) 2,474 2,505 -1.2 % 2,463
Number of personnel at period end (FTE) 2,486 2,402 3.5 % 2,416
1) EBITA is operating profit before amortisation and impairment resulting from acquisitions and disposals
2) Rolling 12 month        



“After a challenging start of the year, our performance started to improve in March. As a result of the mild winter in January and February, the demand for heating services was exceptionally low, which affected our sales in the Nordic countries. However, it seems that, because of the mild winter, construction got off to a good start already in March – slightly earlier than usual. I expect the situation to develop favourably towards the end of the year, particularly in Sweden and Germany, where the growth forecasts for 2014 are good. In addition, there are positive signs in our other markets that growth will resume in 2014.

Our result for the first quarter of 2014 did not entirely meet our expectations, but I believe that Cramo Group will reach its full-year performance goals.

In order to ensure favourable profit development, we adjusted our costs, particularly in Sweden and Norway. Over the past few years, we have developed a flexible operating model which enables rapid adjustments for example in the use of hired personnel. In addition, we optimised our depot network.

In Germany, we continued to implement our transition program, which I believe will bring results during the rest of the year.

My favourable full-year outlook for 2014 is based not only on market forecasts, but also on our determined operational development over the past few years. We will continue to strengthen our customer focus in all of our countries of operation. We have also developed our pricing models and solutions, so that we will be able to make use of opportunities as soon as the rental market resumes growth.

Market forecasts for 2014 continue to support our optimistic outlook on several markets, but the growth rate is likely to remain moderate. I am expecting the rental market to resume growth during the summer and our business operations to develop favourably from this point forward,” says Vesa Koivula, President and CEO of Cramo Group. 


Cramo Group’s consolidated sales decreased by 5.6% to EUR 140.3 (148.5) million. In local currencies, sales decreased by 1.8%.

The transfer of the Russian operations to the joint venture on 1 March 2013 decreased sales. Sales change in local currencies, excluding restructuring in Russia, was +0.8%. The market situation continued to be difficult in January and February, but turned better in March.

The mild winter had a favourable effect on sales in Central Europe. However, the low demand for heating services in the Nordic countries decreased sales. Towards the end of the period, the mild winter accelerated the start of construction projects, even in the Nordic countries. Early project starts offer a good starting point for growth in rental services, particularly in Sweden and Germany, where construction growth forecasts are favourable. In the modular space business, demand continued to be strong.

EBITA was EUR 4.4 million (6.4 million). EBITA margin was 3.1% (4.3%) of sales. The result was weakened by the modest demand in January and February, after which markets picked up in March.

Earnings per share was EUR -0.03 (-0.04).

Considering the market situation, the result was good in Finland and Sweden. In order to ensure positive performance development in Sweden, Cramo reduced its cost base in order to further enhance the efficiency of its operations. The cost savings are expected to have a visible effect in Sweden in the second quarter of 2014. The result improved in Norway, where costs were also reduced by optimising structures and the depot network. In Central Europe, demand developed favourably and the transition programme progressed as planned. The result in Central Europe is expected to improve towards the end of the year.

In Eastern Europe, sales and profit developed as expected, with the exception of the joint venture Fortrent. In Russia and Ukraine, the Ukrainian crisis decreased construction and the demand for rental services. Fortrent responded by rapidly adjusting it costs and decreasing its level of investment.

Cash flow from operating activities was EUR 8.1 (17.9) million. Payments in accordance with a residual tax decision of EUR 9.7 million in Finland had a negative effect on cash flow from operating activities. The company and its tax advisors consider the decision to be unfounded and Cramo has appealed. Gross capital expenditure was EUR 27.3 (46.2) million, and net cash flow from investing activities was EUR -18.8 (-36.8) million. Cash flow after investments was EUR -10.7 (-18.9) million. The Group’s gearing was 76.3% (69.7%) at the end of March.

After the review period, in line with its growth strategy, Cramo expanded its modular space business in Germany by acquiring C/S RaumCenter. The acquisition offers Cramo significant opportunities in the growing modular space market in Germany. In Finland, Cramo strengthened its position in the construction machinery rental market by acquiring OptiRent. Both of the acquisitions were completed in April.


Eurozone economies are expected to resume growth in 2014. Growth is expected particularly in the second half of the year. The Ukrainian crisis has brought uncertainty to growth expectations. However, its effects have been limited to Russia and Ukraine. If the crisis expands materially to continental Ukraine or the EU implements severe economic sanctions, the crisis may have a stronger effect on construction and the demand for rental services in some of Cramo’s countries of operation.

For the time being the general expectation of economic revival in Europe in 2014 remains unchanged.

However, market-specific differences in construction and the demand for rental services are considerable. In its November forecast, Euroconstruct estimated that construction would increase in the Nordic countries, Germany, Poland and Lithuania in 2014. In Norway, positive signs regarding residential construction were received in April, indicating that apartment prices had begun to rise again during the winter.

In the long term, the equipment rental market is expected to grow faster than construction. Changes in demand usually follow those in construction with a delay and may be strong. In addition to construction, the demand for equipment rental services is affected by industrial investments and the rental penetration rate.

The European Rental Association (ERA) is expecting equipment rental to increase in all of Cramo’s main markets in 2014.


Cramo will hold a briefing and a live webcast at Kämp Kansallissali at Aleksanterinkatu 44 A (2nd floor) in Helsinki on Thursday, 8 May 2014 at 11.00 am. The briefing will be in English.

It can be viewed live on the Internet at A replay of the webcast will be available at from 8 May 2014 in the afternoon.


In 2014, Cramo Plc will publish two more interim reports:

Interim report for January–June 2014 will be published on 6 August 2014.

Interim report for January–September 2014 will be published on 29 October 2014.


Vesa Koivula
President and CEO


Further information:

Vesa Koivula, President and CEO, tel. +358 40 510 5710


NASDAQ OMX Helsinki Ltd.
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Cramo is Europe’s second largest rental services company specialising in construction machinery and equipment rental and rental-related services as well as the rental of modular space. Cramo operates in fifteen countries with 360 depots. With a group staff around 2.500, Cramo's consolidated sales in 2013 was EUR 660 million. Cramo shares are listed on the NASDAQ OMX Helsinki Ltd.