Vantaa, Finland, 2015-02-10 08:00 CET (GLOBE NEWSWIRE) -- Cramo Plc Financial Statements Bulletin 10 February 2015, at 9.00 am (EET)
Cramo’s Financial Statements Bulletin for January–December 2014
Improved result towards year end
10–12/2014 highlights (year-on-year comparison in brackets):
- Sales EUR 180.6 (175.1) million; growth of 3.1%. Sales growth in local currencies 6.1%
- Comparable EBITA before non-recurring items EUR 25.9 (24.8) million and EBITA margin 14.3% (14.1%); EBITA after non-recurring items EUR 23.0 (24.8) million and EBITA margin 12.7% (14.1%)
- Comparable earnings per share before non-recurring items EUR 0.37 (0.35); earnings per share after non-recurring items EUR -0.17 (0.38)
- EUR 25.5 million non-recurring impairment on goodwill and intangible assets in Central Europe
- Cash flow from operating activities EUR 55.8 (66.3) million and cash flow after investments EUR 28.2 (34.4) million
1–12/2014 highlights:
- Sales EUR 651.8 (657.3) million; the change -0.8%. Sales grew in local currencies, excluding restructuring in Russia, by 3.1%
- Comparable EBITA before non-recurring items EUR 73.2 (80.5) million and EBITA margin 11.2% (12.2%); EBITA after non-recurring items EUR 70.3 (79.9) million and EBITA margin 10.8% (12.2%)
- Comparable earnings per share EUR 0.91 (1.02); earnings per share after non-recurring items EUR 0.37 (1.01)
- Cash flow from operating activities EUR 118.3 (160.3) million and cash flow after investments EUR -6.5 (50.3) million
- Gearing 84.7% (72.9%)
- The Board of Directors proposes a dividend of EUR 0.55 (0.60) per share
Significant events after the period:
- The acquisition of equipment rental company Vuokra-Pekat Oy in Finland
Guidance for 2015:
There are economic and political uncertainties in Cramo’s markets related to 2015. With the current market outlook, Cramo Group’s sales will grow in local currencies and the EBITA margin will improve in 2015 compared to 2014.
| KEY FIGURES AND RATIOS (MEUR) | 10-12/14 | 10-12/13 | Change % | 1-12/14 | 1-12/13 | Change % |
| Income statement | ||||||
| Sales | 180.6 | 175.1 | 3.1 % | 651.8 | 657.3 | -0.8 % |
| EBITDA | 47.8 | 48.2 | -0.8 % | 167.3 | 173.8 | -3.7 % |
| EBITA before non-recurring items 1) 2) | 25.9 | 24.8 | 4.5 % | 73.2 | 80.5 | -9.1 % |
| % of sales | 14.3% | 14.1% | 11.2% | 12.2% | ||
| EBITA after non-recurring items 1) 2) | 23.0 | 24.8 | -7.2 % | 70.3 | 79.9 | -12.1 % |
| % of sales | 12.7% | 14.1% | 10.8% | 12.2% | ||
| Operating profit (EBIT) | -5.1 | 21.8 | 34.3 | 66.8 | -48.6 % | |
| Profit before taxes (EBT) | -8.1 | 18.0 | 21.5 | 51.9 | -58.6 % | |
| Profit for the period | -7.5 | 16.3 | 16.0 | 42.8 | -62.6 % | |
| Share related information | ||||||
| Earnings per share (EPS) before non-recurring items, EUR 3) | 0.37 | 0.35 | 6.0 % | 0.91 | 1.02 | -10.6 % |
| Earnings per share (EPS), EUR | -0.17 | 0.38 | 0.37 | 1.01 | -63.6 % | |
| Earnings per share (EPS), diluted, EUR | -0.17 | 0.38 | 0.36 | 1.00 | -63.6 % | |
| Shareholders’ equity per share, EUR | 10.40 | 11.56 | -10.0 % | |||
| Other information | ||||||
| Return on investment, % 4) | 4.2 % | 7.7 % | ||||
| Return on equity, % 4) | 3.4 % | 8.3 % | ||||
| Equity ratio, % | 43.9 % | 47.1 % | ||||
| Gearing, % | 84.7 % | 72.9 % | ||||
| Net interest-bearing liabilities | 385.4 | 364.8 | 5.6 % | |||
| Gross capital expenditure (incl. acquisitions) | 33.6 | 30.7 | 9.2 % | 159.1 | 129.6 | 22.7 % |
| of which acquisitions/business combinations | 0.4 | -0.5 | 11.4 | 29.1 | -60.9 % | |
| Cash flow from operating activities | 55.8 | 66.3 | -15.9 % | 118.3 | 160.3 | -26.2 % |
| Cash flow after investments | 28.2 | 34.4 | -18.0 % | -6.5 | 50.3 | |
| Average number of personnel (FTE) | 2,528 | 2,463 | 2.6 % | |||
| Number of personnel at period end (FTE) | 2,473 | 2,416 | 2.4 % | |||
|
1) EBITA is operating profit before amortisation and impairment resulting from acquisitions and disposals |
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| 2) In 2014, fourth quarter and full-year non-recurring costs included in EBITA amounted to EUR 2.9 million, of which EUR 2.2 million relating to Denmark and EUR 0.7 million to non-recurring costs at the Group level. In 2013, full-year non-recurring costs included in EBITA amounted to EUR 0.6 million relating to Norway. | ||||||
| 3) In 2014, fourth quarter and full-year non-recurring costs included in the profit for the period amounted to EUR 23.6 million, of which EUR 2.2 million relating to Denmark, EUR 0.7 million to non-recurring costs at the Group level, EUR 25.5 million to an impairment on goodwill and intangible assets in Central Europe and EUR 4.8 million to a tax income. In 2013, non-recurring costs included in the profit for the period amounted to EUR 0.6 million relating to Norway. | ||||||
| 4) Rolling 12 month | ||||||
CEO Vesa Koivula’s comment
“Economic development was weaker than expected in Europe in 2014, which slowed down construction in many locations and also affected demand for equipment rental services. However, public sector demand for the modular space business remained stable. Our sales performance actions and the more favourable market conditions improved our sales towards the end of the year. Fourth quarter sales grew in local currencies by 6.1%, as the market situation strengthened particularly in Sweden.
Our result improved towards the end of the year due to performance improvement actions. During the year, we cut down fixed costs and improved operational efficiency. In the second half of the year, the Group’s comparable fixed costs decreased by EUR 13.2 million compared to first half of the year. More generally, we continue the Group’s performance improvement actions especially related to direct costs.
The improvement efforts and investments completed in our Central European operations provide a good platform going forward. However, there is still room for significant improvement in fleet utilisation rates and it will take time before we reach a good level of profitability in Central Europe. In the fourth quarter, we made a non-recurring impairment after which there is no goodwill or acquisition-related intangible assets left related to our Central European operations.
Although the first half of the year was challenging for Cramo, I am reasonably satisfied with our performance in the second half of 2014. In the fourth quarter, our result before non-recurring items improved year-on-year. I am particularly satisfied with the clear improvement of profitability in Sweden during the last quarter of the year, the good performance in Finland in 2014 as well as the profitable growth and expansion to new markets achieved in the modular space business. Modular space sales increased by 14.4% in 2014.
In September, we updated Cramo Group’s strategy and the implementation of the new strategy progressesd well. Our strategy concentrates especially on profit-enhancing development projects in all operating countries.
Our efforts completed in 2014 provide a good foundation for coming years” says Vesa Koivula, President and CEO of Cramo Group.
Summary of financial performance in 2014
Sales
Cramo Group’s consolidated sales for 2014 were EUR 651.8 (657.3) million. In local currencies, however, sales increased by 2.5%. Sales growth in local currencies, excluding restructuring in Russia, was 3.1%.
In the last quarter of 2014, the sales growth rate improved clearly year-on-year. Euro-denominated sales took an upward turn and increased by 3.1% to EUR 180.6 (175.1) million. In local currencies sales grew by 6.1%. Sales developed favourably in all business segments except for Norway. In Sweden, sales grew in local currencies by 6.9%.
Costs
The performance improvement actions initiated in the second quarter had a positive effect on the Group’s result in the second half of the year. The Group’s comparable fixed costs before non-recurring items decreased by EUR 5.3 million year-on-year in the second half of the year, and in the fourth quarter by EUR 2.3 million. Fixed costs were reduced particularly in Scandinavia and Central Europe.
Results
In 2014, comparable EBITA before non-recurring items was EUR 73.2 (80.5) million, or 11.2% (12.2%) of sales. The fourth quarter included EUR 2.2 million in non-recurring expenses in Denmark and EUR 0.7 million in non-recurring expenses at the Group level. EBITA after non-recurring items was EUR 70.3 (79.9) million, or 10.8% (12.2%) of sales.
Profitability improved in the last quarter. Fourth-quarter comparable EBITA before non-recurring items was EUR 25.9 (24.8) million, or 14.3% (14.1%) of sales. EBITA after non-recurring items was EUR 23.0 (24.8) million, or 12.7% (14.1%) of sales.
Full-year comparable earnings per share before non-recurring items were EUR 0.91 (1.02). In addition to non-recurring costs amounting to EUR 2.9 million, the fourth quarter included a EUR 25.5 million impairment on goodwill and intangible assets in Central Europe. Full-year earnings per share after non-recurring items were EUR 0.37 (1.01). Fourth-quarter earnings per share before non-recurring items were EUR 0.37 (0.35) and after non-recurring items EUR -0.17 (0.38).
A good full-year result was achieved in Finland despite the weak market situation. The full-year result was good also in Sweden and a significant aspect was the improvement in profitability in the last quarter of the year. In Norway, the full-year result was burdened by the performance improvement programme, the effects of which are expected to show going forward. In Denmark, the result was weak. In the fourth quarter, Cramo completed restructurings in order to improve its operational efficiency going forward.
Early in the year, the result in Central Europe was impaired by costs related to the extensive transition programme. The positive effects of the transition programme started to show as of the end of the third quarter, but there is still room for significant improvement in fleet utilisation rates and profitability. In Eastern Europe, the full-year profitability was good. Profitability was impaired by the result of Fortrent, the joint venture operating in Russia and Ukraine. In the last quarter, EBITA in Eastern Europe excluding Fortrent improved year-on-year. Fortrent completed a EUR 0.5 million non-recurring impairment on goodwill related to its Ukrainian operations in the last quarter. Fortrent continued to adjust its operations to the weakened market situation and its cash flow was strong due to the low investment level.
As for product areas, equipment rental sales decreased by 3.0% to EUR 560.4 (577.7) million. Modular space sales increased by 14.4% to EUR 92.8 (81.1) million. During the year, the modular space business was expanded to Central Europe. In equipment rental, comparable EBITA before non-recurring items was EUR 53.5 (63.2) million, or 9.5% (10.9%) of sales, and EBITA after non-recurring items EUR 51.3 (62.6) million, or 9.2% (10.8%) of sales. In modular space, EBITA was EUR 26.9 (26.0) million, or 29.0% (32.0%) of sales.
Full-year cash flow from operating activities was EUR 118.3 (160.3) million. Payments in accordance with a residual tax decision of EUR 9.7 million in the first quarter in Finland had a negative effect on cash flow from operating activities. The company considers the decision unfounded. Gross capital expenditure was EUR 159.1 (129.6) million, and net cash flow from investing activities was EUR -124.8 (-110.0) million. Cash flow after investments was EUR -6.5 (50.3) million.
In the fourth quarter, cash flow from operating activities was EUR 55.8 (66.3) million and cash flow after investments was EUR 28.2 (34.4) million. The Group’s gearing was 84.7% (72.9%) at the end of 2014.
Proposal for profit distribution
The Board of Directors proposes to the Annual General Meeting that a dividend of EUR 0.55 (0.60) be paid for the financial year 2014.
Market outlook
According to estimates, the national economies in Europe took, on average, a slight upward turn in 2014. In 2015, growth will still be modest in many countries, but there are significant country-specific differences in the estimated economic development. At the moment, the greatest uncertainties about economic development are related to the geopolitical situation and the risks related to the European financial markets and currency rate fluctuations. For Cramo, significant uncertainties relate to the Ukrainian crisis and the overall economic situation in Russia. The decline in oil price is expected to have a positive impact on economic development with the exception of Norway and Russia.
In Europe, market-specific differences are considerable also in the development of construction and the demand for rental services. In its November forecast, the construction market analyst Euroconstruct estimated that in 2015, construction would increase in all of Cramo’s operating countries with the exception of Estonia, Latvia and Russia.
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. 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 services to increase in all of Cramo’s main markets in 2015. The growth is expected to somewhat strengthen compared to 2014.
(All construction market forecasts presented in this review are estimates by Euroconstruct, unless otherwise stated.)
Briefing
Cramo will hold a briefing and a live webcast at Kämp Kansallissali, address: Aleksanterinkatu 44 A (2nd floor) in Helsinki on Tuesday, 10 February 2015 at 11.00 am. The briefing will be in English.
It can be viewed live on the Internet at www.cramo.com. A replay of the webcast will be available at www.cramo.com from 10 February 2015 in the afternoon.
Publication of financial information 2015
The Annual Report containing the full financial statements for 2014 will be published in electronic format on week 10/2015.
The 2015 Annual General Meeting will take place on Tuesday, 31 March 2015, in Helsinki.
In 2015, Cramo Plc will publish three interim reports:
The interim report for January–March 2015 will be published on Tuesday, 5 May 2015.
The interim report for January–June 2015 will be published on Wednesday, 5 August 2015.
The interim report for January–September 2015 will be published on Thursday, 29 October 2015.
CRAMO PLC
Vesa Koivula
President and CEO
Further information:
Vesa Koivula, President and CEO, tel: +358 40 510 5710
Martti Ala-Härkönen, CFO, tel: +358 10 661 10, +358 40 737 6633
Distribution:
NASDAQ OMX Helsinki Ltd.
Main media
www.cramo.com
Cramo is Europe’s second largest rental services company specialising in construction machinery and equipment rental and rental-related services as well as the rental of modular space. Cramo operates in fifteen countries 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.
