Vantaa, Finland, 2016-05-04 08:00 CEST (GLOBE NEWSWIRE) -- Cramo Plc Interim Report 4th May 2016, at 9.00 am Finnish time (EET)
Cramo’s Interim Report January–March 2016
Profitable growth continued
1–3/2016 highlights (year-on-year comparison in brackets):
- Sales EUR 155.4 (147.1) million; the change was 5.7%. In local currencies, sales grew by 6.4%
- EBITA EUR 13.0 (10.1) million and EBITA margin 8.3% (6.9%)
- Earnings per share EUR 0.16 (0.09)
- Cash flow from operating activities EUR 23.6 (3.5) million and cash flow after investments EUR -4.3 (-27.8) million
- Gearing 80.0% (92.9%)
- The Annual General Meeting decided that a dividend of EUR 0.65 (0.55) per share be paid
Guidance for 2016 unchanged: In 2016, Cramo Group’s sales will grow in local currencies and the EBITA margin will improve compared to 2015
| KEY FIGURES AND RATIOS (MEUR) | 1-3/16 | 1-3/15 | Change % | 1-12/15 |
| Income statement | ||||
| Sales | 155.4 | 147.1 | 5.7 % | 667.9 |
| EBITDA | 38.7 | 34.3 | 12.9 % | 185.7 |
| EBITA 1) 2) | 13.0 | 10.1 | 27.9 % | 84.8 |
| % of sales | 8.3% | 6.9% | 12.7% | |
| Operating profit (EBIT) | 11.7 | 8.0 | 46.0 % | 76.7 |
| Profit before taxes (EBT) | 8.9 | 4.9 | 81.0 % | 63.8 |
| Profit for the period | 7.0 | 3.9 | 81.0 % | 49.7 |
| Share related information | ||||
| Earnings per share (EPS), EUR 3) | 0.16 | 0.09 | 78.5 % | 1.13 |
| Earnings per share (EPS), diluted, EUR 3) | 0.16 | 0.09 | 79.5 % | 1.12 |
| Shareholders’ equity per share, EUR | 10.46 | 10.11 | 3.5 % | 11.05 |
| Other information | ||||
| Return on investment, % 4) | 9.5 % | 4.9 % | 9.0 % | |
| Return on equity, % 4) | 11.6 % | 4.5 % | 10.5 % | |
| Equity ratio, % | 43.7 % | 42.3 % | 45.7 % | |
| Gearing, % | 80.0 % | 92.9 % | 75.1 % | |
| Net interest-bearing liabilities | 372.1 | 412.4 | -9.8 % | 368.4 |
| Gross capital expenditure (incl. acquisitions) | 30.6 | 41.5 | -26.3 % | 175.0 |
| of which acquisitions/business combinations | 8.5 | -100.0 % | 9.8 | |
| Cash flow from operating activities 5) | 23.6 | 3.5 | 572.4 % | 174.9 |
| Cash flow after investments | -4.3 | -27.8 | 35.6 | |
| Average number of personnel (FTE) | 2,497 | 2,487 | 0.4 % | 2,486 |
| Number of personnel at period end (FTE) | 2,505 | 2,494 | 0.4 % | 2,473 |
- EBITA is operating profit before amortisation and impairment resulting from acquisitions.
- The year 2015 included EUR 2.0 million in costs relating to the change of the President and CEO and to restructuring in Central Europe. Excluding these costs, EBITA was EUR 86.8 million and the EBITA margin was 13.0%.
- The full-year 2015 comparable earnings per share before the above-mentioned costs and their tax impact was EUR 1.17.
- Rolling 12 months.
-
Starting from 2016 the reporting line of unpaid investments in the cash flow statement has been changed. As a result the operating cash flow for 1-3/2015 has increased by EUR 1.1 million and for 1-12/2015 decreased by EUR 8.0 million.
CEO LEIF GUSTAFSSON’S COMMENT
2016 off to a good start
“During the first months of the year, the demand for equipment rental and modular space developed according to our expectations. We have managed to capitalise on the improved market situation in our main markets Finland and Sweden.
In the first quarter, our sales grew by 6.4% in local currencies. As for segments, sales grew in Finland, Sweden and Denmark. Sales grew strongly in the modular space product area where rental sales increased by 9.0%. The number of new modular space deliveries increased during the period, which boosted sales of modular space installation services. Modular space sales grew in local currencies in all business segments.
On the basis of the current outlook, I expect the demand for rental services to stay on a good level throughout the year. Over the long term, the increase in the use of rental services and modular space is supported by several megatrends, such as urbanisation and sustainability.
Our first-quarter EBITA margin increased from 6.9% to 8.3%, with profitability improving in Finland, Denmark and Central Europe and staying on par in Sweden. In Central Europe, the EBITA margin was still negative, but I expect the margin to gradually improve during the year.
My first months as Cramo’s President and CEO have been inspiring, and I have been very pleased to witness the high level of skills, commitment and motivation among our employees to develop our operations and further strengthen our market position.
We have started the preparation of Vision 2020. We will provide more details on our new strategy in the autumn of 2016,” says Leif Gustafsson, Cramo Group’s President and CEO.
SUMMARY OF FINANCIAL PERFORMANCE IN JANUARY–MARCH 2016
Sales
Cramo Group’s consolidated sales for January–March were EUR 155.4 (147.1) million, showing an increase of 5.7%. In local currencies, sales grew by 6.4%.
Sales grew by 18.9% in Finland, by 8.3% in Sweden (7.7% in local currencies) and by 18.5% in Denmark. Sales decreased by 14.1% in Norway (6.3% in local currencies), by 3.3% in Central Europe and by 4.4% in Eastern Europe (3.5% in local currencies). The sales decrease in Central Europe was due to a decrease in trading sales, whereas rental sales increased.
As for product areas, sales growth was 2.2% (3.0% in local currencies) for equipment rental and 26.0% (26.3% in local currencies) for modular space. Plenty of new modular space deliveries took place during the period, which increased especially the sales of installation services.
Costs
The Group costs as a share of sales decreased, which had a positive impact on profitability. Direct costs (materials and services) as a share of sales were at the same level as last year 35.3% (35.3%). Increased sales of installation services within modular space increased direct costs in relation to sales. Indirect costs (employee benefit expenses and other operating expenses) as a share of sales decreased from 44.1% to 41.9%.
Result
The result and profitability improved year-on-year. EBITA was EUR 13.0 (10.1) million, showing growth of 27.9%. EBITA margin was 8.3% (6.9%). Profitability improved in Finland, Denmark and Central Europe and was on par in Sweden.
The profit increased in both product areas. EBITA was EUR 6.9 (5.6) million, or 5.4% (4.5%) of sales for equipment rental and EUR 7.9 (6.8) million, or 28.4% (30.5%) of sales for modular space. Modular space EBITA margin was affected by the significant proportion of installation services during the period.
Earnings per share were EUR 0.16 (0.09).
Return on equity (rolling 12 months) improved and was 11.6% (4.5%).
Cash flow from operating activities improved clearly and was EUR 23.6 (3.5) million. Cash flow after investments was EUR -4.3 (-27.8) million. Gross capital expenditure was EUR 30.6 (41.5) million.
The Group’s gearing was 80.0% (92.9%). Both in the comparison period and in the review period, dividend liability increased gearing.
MARKET OUTLOOK
Economic development in Europe is expected to gradually pick up as private consumption grows. According to European Central Bank’s (ECB) December estimate, short-term indicators suggest that GDP growth will continue to be moderate. ECB expects favourable financing conditions and low mortgage interest rates, combined with the increase in households’ disposable income, to boost demand for housing. The need for new construction, renovation and temporary facilities also increases due to intensely increasing immigration. Nevertheless, in its March review, the Bank of Finland estimated that investments will increase slowly in Europe, primarily due to the weakening of the world trade growth outlook.
In Cramo countries, the construction market outlook for 2016 is positive. The construction market analysts Euroconstruct and Forecon estimate that construction will increase in all of Cramo’s operating countries with the exception of Russia and Slovakia. The Confederation of Finnish Construction Industries RT also estimates that construction will take an upward turn in Finland.
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 volume, the demand for equipment rental services is affected by industrial investments and the increase in the rental penetration rate. Tightening legislation and the requirement to improve the efficiency and quality of construction increase the need for different types of rental-related services.
The demand for modular space is boosted by the increase in the need for and popularity of modifiable and easily implementable space solutions. Demand is also increased by migration flows within countries, demographical changes as well as by completely new applications, such as asylum seeker reception centres. Furthermore, the long-term demand for both equipment rental and modular space is supported by many megatrends, such as urbanisation and the increasing emphasis on sustainability.
The European Rental Association (ERA) expects the use of equipment rental services to increase in all of Cramo’s markets in 2016. According to Cramo’s estimate, the demand for modular space has increased in the Nordic countries by nearly 6% per year during the past five years. Cramo estimates that in the Baltic countries and Germany, market growth is stronger.
(All construction market forecasts presented in this review are estimates by Euroconstruct, unless otherwise stated.)
GUIDANCE ON GROUP OUTLOOK
The guidance of Cramo Plc’s Board of Directors for 2016 remains unchanged: In 2016, Cramo Group’s sales will grow in local currencies and the EBITA margin will improve compared to 2015.
BRIEFING
Cramo will hold a briefing and a live webcast at Kämp Kansallissali, address: Aleksanterinkatu 44 A, 2nd floor, Helsinki, on Wednesday, 4 May 2016 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 4 May 2016 in the afternoon.
PUBLICATION OF FINANCIAL INFORMATION 2016
Cramo will publish two more interim reports in 2016.
The interim report for January–June 2016 will be published on 3 August 2016.
The interim report for January–September 2016 will be published on 26 October 2016.
CRAMO PLC
Leif Gustafsson
President and CEO
Further information:
Leif Gustafsson, President and CEO, tel: +46 70 677 2777
Martti Ala-Härkönen, CFO, tel: +358 10 661 1270 or +358 40 737 6633
Distribution:
Nasdaq Helsinki Ltd.
Major 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 and in about 330 depots. With a group staff around 2.500, Cramo's consolidated sales in 2015 was EUR 668 million. Cramo shares are listed on the Nasdaq Helsinki Ltd.
