Cramo Plc Interim report 12 August 2008, at 9.00 am Finnish time
(GMT+2)
ACCELERATED GROWTH FOR CRAMO - INTERIM REPORT FOR JANUARY-JUNE 2008
- Consolidated sales: EUR 280.8 (223.7) million, up 25.5%, with second-quarter
growth of 32.3%
- EBITA: EUR 48.1 (39.1) million, up 23.1%; excluding the capital gain from the
sale of facilities in Finland in 2008 and the divestment of Dutch operations in
2007, EUR 42.1 (35.1) million, up 20.0 %
- EBIT: EUR 45.0 (37.0) million, up 21.6 %
- Undiluted earnings per share: EUR 0.78 (0.77); diluted earnings per share:
EUR
0.78 (0.76)
- Continued strong growth, both organically and through acquisitions
- 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
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| KEY FIGURES AND RATIOS | 4-6/08 | 4-6/07 | 1-6/08 | 1-6/07 | 1-12/07 |
| (EUR 1,000) | | | | | |
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| Sales, EUR 1,000 | 154,015 | 116,396 | 280,789 | 223,693 | 496,428 |
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| Operating profit before | 30,679 | 22,426 | 48,095 | 39,083 | 95,963 |
| amortisation on | | | | | |
| intangible assets | | | | | |
| resulting from | | | | | |
| acquisitions (EBITA) | | | | | |
--------------------------------------------------------------------------------
| Operating profit (EBIT) | 28,738 | 21,384 | 44,970 | 36,974 | 91,844 |
--------------------------------------------------------------------------------
| Profit before tax (EBT) | 23,088 | 18,198 | 34,409 | 29,825 | 75,808 |
--------------------------------------------------------------------------------
| Profit for the period | 15,892 | 14,864 | 23,898 | 23,585 | 57,485 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings per share (EPS) | 0.58 | 0.51 | 0.88 | 0.82 | 2.00 |
| before amortisation on | | | | | |
| intangible assets | | | | | |
| resulting from | | | | | |
| acquisitions, diluted, | | | | | |
| EUR | | | | | |
--------------------------------------------------------------------------------
| Earnings per share | 0.52 | 0.49 | 0.78 | 0.77 | 1.88 |
| (EPS), undiluted, EUR | | | | | |
--------------------------------------------------------------------------------
| Earnings per share | 0.52 | 0.48 | 0.78 | 0.76 | 1.87 |
| (EPS), diluted, EUR | | | | | |
--------------------------------------------------------------------------------
| Equity per share, EUR | | | 11.12 | 9.81 | 10.88 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Return on equity, | | | 18.0 | 18.5 | 18.4 |
| rolling | | | | | |
| 12-month ROE, % | | | | | |
--------------------------------------------------------------------------------
| Equity ratio, % | | | 32.0 | 36.9 | 37.3 |
--------------------------------------------------------------------------------
| Gearing, % | | | 151.3 | 118.4 | 109.4 |
--------------------------------------------------------------------------------
| Net interest-bearing | | | 515,547 | 356,186 | 364,985 |
| liabilities, EUR 1,000 | | | | | |
--------------------------------------------------------------------------------
| Gross capital | | | 134,081 | 92,994 | 175,494 |
| expenditure, EUR 1,000 | | | | | |
--------------------------------------------------------------------------------
| % of sales | | | 47.8 | 41.6 | 35.4 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Average personnel | | | 2,463 | 2,063 | 2,070 |
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SUMMARY OF FINANCIAL PERFORMANCE IN THE first half OF 2008
Cramo Group's consolidated sales saw accelerated growth in the second quarter of
2008, in line with the Group's expectations. Sales increased in all market areas
and totalled EUR 280.8 million in January-June. Compared to the corresponding
period of last year (EUR 223.7 million), consolidated sales were up 25.5 per
cent. In April-June the Group's sales growth was 32.3 per cent. The acquisitions
and equipment investments completed in the early part of the year, especially in
new depots and new markets, contributed to sales growth. Equipment rental sales
in Central and Eastern Europe were back in line with the growth target of over
50 per cent in April-June, coming at 52.3 per cent. In Western Europe sales
growth was 64.1 per cent in April-June, and growth overall was stronger in all
segments in the second quarter compared to the first quarter of the year. The
investments and acquisitions completed in the review period are expected to
boost growth also in the latter part of the year.
EBITA for the first half of the year amounted to EUR 48.1 (39.1) million,
representing 17.1 (17.5) per cent of sales. EBITA increased by 23.1 per cent
year on year. The second-quarter capital gain from the sale of properties in
Finland, totalling EUR 6.0 million, is recognised under other operating income.
Operative EBITA (excluding the capital gain from the sale of facilities and the
EUR 4.0 million capital gain from the divestment of Dutch operations in 2007)
was EUR 42.1 (35.1) million, up 20.0 per cent year on year. EBITA increased but
relative profitability decreased in the equipment rental business, whereas both
EBITA and relative profitability increased in the modular space business.
In April-June profitability improved in the equipment rental business in Sweden
and Western Europe, and in the modular space business. Profitability in the
modular space business continued at a good level, contributing to stability in
Cramo Group's operations over the business cycle. In Central and Eastern Europe,
profitability was a reflection of slow growth in the Baltic countries.
Cramo continued to make investments in all of its market areas. The Group
completed five acquisitions in Finland, Sweden and Norway during the second
quarter. During the last two years, acquisitions have contributed to the Group's
market share and competitive position.
outlook for the next 12 months
In spite of instability in financial markets, growth in rental services is
expected to continue in Cramo's business environment. In the Nordic countries,
construction is predicted to continue growing in 2008, albeit at a lower rate
compared to previous years. Even though overall growth in construction sees a
decline in residential construction, industrial and commercial construction and
civil engineering will continue to grow. In 2009, the construction sector is
expected to continue to grow in Sweden, whereas there is more uncertainty
regarding the other Nordic countries. Central and Eastern Europe are expected to
see sustained growth. In the Baltics the construction market is down.
Equipment rental services are expected to grow faster compared to construction.
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 needs for increasingly flexible space
solutions.
In 2008, the Group's growth and geographic expansion have triggered a high
equipment investment activity. However, the level of capital expenditure will
normalise in the Nordic countries in 2009. Investments will continue in the
growing Central and Eastern European markets.
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, and the success of the
Group's acquisitions.
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. Beyond,
however, sudden macroeconomic developments may change this picture.
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's consolidated sales saw clearly accelerated growth in the second quarter,
in line with the Group's expectations. Consolidated sales amounted to EUR 280.8
million in January-June. Compared to those of the corresponding period last year
(EUR 223.7 million), consolidated sales increased by 25.5 per cent. Sales growth
from continuing operations was 27.2 per cent, while organic growth was 22.6 per
cent in the first half of the year. Sales developed as expected in all markets.
They were boosted by the first-half acquisitions, equipment investments
(especially in new depots and new markets) and Easter falling in the first
quarter this year.
The equipment rental business reported sales of EUR 245.4 (191.4) million in
January-June and showed an increase of 28.2 per cent. Excluding the Netherlands
(business divested in 2007), equipment rental sales grew by 30.2 per cent. The
modular space business recorded sales of EUR 38.8 (36.0) million, showing an
increase of 7.8 per cent.
Inter-segment sales (equipment rental and modular space) came to EUR 3.3 (3.7)
million in January-June.
Cramo Group's second-quarter consolidated sales totalled EUR 154.0 million.
Compared to the corresponding period of last year (EUR 116.4 million), sales
increased by 32.3 per cent. The equipment rental business reported sales of EUR
135.1 (100.2) million in the second quarter, and the modular space business
recorded sales of EUR 20.3 (18.2) million.
Consolidated operating profit before amortisation on intangible assets from
acquisitions (EBITA) was 48.1 (39.1) million, or 17.1 (17.5) per cent of
consolidated sales, in the first half. The second-quarter capital gain from the
sale of property in Finland, totalling EUR 6.0 million, is recognised under
other operating income. EBITA excluding the capital gain from the sale of
facilities and the EUR 4.0 million capital gain from the divestment of Dutch
operations in 2007 was EUR 42.1 (35.1) million. This represents an increase of
20.0 per cent year on year, but also taking into account these one-off capital
gains the Group's relative profitability decreased slightly. Profitability was
affected by big growth investments in Russia, the increase in the relative
amount of service business and the higher than expected general cost increase in
Finland, as well as the slowdown in Baltic growth. The Group's previous year's
EBITA includes also EUR 4.4 million in expenses related to the Cramo brand
change.
EBITA for the second quarter amounted to EUR 30.7 (22.4) million, representing
19.9 (19.3) per cent of sales. The equipment rental business reported an EBITA
of EUR 22.7 (19.6) million, and the modular space business an EBITA of EUR 6.0
(4.4) million.
EBIT for the first half of the year amounted to EUR 45.0 (37.0) million,
representing 16.0 per cent of sales.
Profit before tax was EUR 34.4 (29.8) million, while profit for the period
totalled EUR 23.9 (23.6) million. Undiluted earnings per share were EUR 0.78
(0.77) and diluted earnings per share EUR 0.78 (0.76). The capital gain from
selling the Dutch operations in 2007 was tax-exempt for the Group, and it
decreased the Group's effective tax rate in 2007. The capital gain from the sale
of facilities in Finland in 2008 is taxable. It realises at the Group level, in
addition to an EUR 1.6 million tax according to the ordinary tax rate, a tax
cost of EUR 0.7 million. As a result of this the Group's effective tax rate was
exceptionally high in the second quarter.
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 18.0 per cent.
CAPITAL EXPENDITURE AND DEPRECIATION/AMORTISATION
Gross capital expenditure of EUR 134.1 (93.0) 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-June amounted to EUR 43.8 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.
Reported depreciation on property, plant and equipment and software totalled EUR
40.2 (29.1) million. Amortisation on intangible assets resulting from
acquisitions totalled EUR 3.1 (2.1) million. At the end of the period, goodwill
totalled EUR 161.6 (149.6) million.
FINANCIAL POSITION AND BALANCE SHEET
The Group showed a positive net cash flow of EUR 44.1 (42.4) million from
operating activities. The cash flow from operating activities was affected by a
negative change in working capital by EUR -21.5 (-11.5) million, which
represents normal fluctuation in working capital. Cash flow from investments was
negative EUR 151.0 million (negative EUR 76.2) million, of which EUR -37.1
million was related to acquisitions. Cash flow from financing activities
amounted to EUR 104.7 (9.8) million. At the end of the period, cash and cash
equivalents amounted to EUR 16.4 (17.3) million, with the net change coming to
negative EUR 2.2 (negative EUR 23.7) million.
At the end of the period, Cramo Group's gross interest-bearing liabilities
totalled EUR 531.9 (373.5) million. The Group has used interest-rate swaps of
approximately EUR 132.9 million to hedge its non-current loans. Hedge
accounting is applied for this amount.
On 30 June 2008, Cramo Group's net interest-bearing liabilities totalled EUR
515.6 (356.2) million, with gearing at 151.3 (118.4) per cent. The growth in
gearing resulted from the Group's capital expenditure and acquisitions in the
first half of 2008. On 30 April 2008, Cramo signed an agreement for long-term
additional financing worth EUR 75 million, which will be used to finance the
Group's growth strategy. The agreement is part of Cramo's long-term syndicated
loan facility.
The balance sheet total on 30 June 2008 was EUR 1,072.6 (823.6) million and the
equity ratio was 32.0 (36.9) per cent.
Property, plant and equipment amounted to EUR 614.8 (426.4) million of the
balance sheet total, with equipment rental representing EUR 476.9 million, or
77.6 per cent, and modular space representing EUR 137.9 million, or 22.4 per
cent.
Net working capital on 30 June 2008 amounted to EUR 43.1 million, with equipment
rental representing EUR 42.9 million, or 99.5 per cent, and modular space
representing EUR 0.2 million, or 0.5 per cent. Inventories amounted to EUR 20.1
million on 30 June 2008, with modular space representing EUR 12.2 million, or
60.6 per cent.
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 a Czech subsidiary.
Equipment rental services are provided through a network of 298 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 second quarter, Cramo expanded its operations through acquisitions in
Finland, Sweden and Norway.
Cramo's Swedish subsidiary, Cramo Sverige AB, acquired the entire share capital
of Hyrmaskiner i Bollnäs AB, an equipment rental company, on 1 April 2008.
Hyrmaskiner i Bollnäs AB focuses on the rental of building machinery in Central
Sweden, mainly serving small and medium-sized local construction companies. Its
annual sales total approximately EUR 1.1 million.
On 7 April 2008, Cramo Finland Oy, Cramo's Finnish subsidiary, signed an
agreement concerning the acquisition of the entire share capital of Pohjolan
Teline Oy, which operates in the Kemi-Tornio area. The company has annual sales
of approximately EUR 1 million, and it has 10 employees. The acquisition
strengthens Cramo's market position in northern Finland, particularly among
industrial enterprises.
Cramo Plc's Norwegian subsidiary, Cramo AS, acquired the rental business of
Kranenentreprenören AS on 14 May 2008. The acquired rental business has annual
sales of some EUR 1.7 million.
Cramo Sverige AB signed a letter of intent on 15 May 2008 to acquire the
operations of GMM Hyrservice i Lund. The business was integrated into the Group
on 1 June 2008. GMM Hyrservice operates in Lund, in southern Sweden, and its
customers are mainly small and medium-sized construction companies. The company
has annual sales of some EUR 1.5 million and six employees.
Cramo AS signed an outsourcing agreement on 24 June 2008, which transfers the
rental operations of JM Byggholt AS, a Norwegian company in the JM construction
corporation from Sweden, to Cramo. The agreement, which takes effect in August,
encompasses all rental assets and a staff of 12. The deal includes a seven-year
co-operation agreement, which makes Cramo the main rental equipment supplier to
JM Byggholt.
During the period under review, Cramo integrated its acquisitions completed in
the first quarter. 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 the Stockholm area, was integrated into the Group on 1 April 2008.
On 18 April 2008, Cramo Plc announced that it had signed an agreement on the
sale of nine of its real estate properties in Finland to Aberdeen Property Fund
Finland I Ky and one or several companies owned by Aberdeen. The agreement took
effect on 30 April 2008 and includes a leaseback of the properties for 10 years.
The properties sold include Cramo's headquarters in Vantaa and eight other
facilities. Cramo also sold seven other real estate properties in Finland in the
period. The total capital gain from the property transactions is EUR 6.0
million, which is recognised under other operating income.
In June, the European Rental Association (ERA) granted Cramo its first ever
‘Rental Company of the Year' award. Cramo received the award for “a successful
and swift transformation of two companies into one of Europe's leading actors in
the industry”. In the Rental Environmental Award category, Cramo finished in
second place.
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 2,463 (2,063). The
equipment rental business had an average of 2,227 (1,823) employees and the
modular space business 236 (240) employees. At the end of the period, the Group
had 2,732 employees.
The geographical distribution of personnel at the end of the period was as
follows: Finland 32.7 per cent, Sweden 25.9 per cent, Western Europe 12.9 per
cent and Central and Eastern Europe 28.5 per cent.
Human resources development focused especially on enhancing the supervisory
skills of members of the management in Central and Eastern Europe.
CHANGES IN MANAGEMENT
Pirjo Saarni, M.Sc. (Psych.), was appointed Vice President, Human Resource
Development at Cramo Plc as of 7 April 2008. She reports to Vesa Koivula,
President and CEO. Saarni transferred to Cramo from Vahanen Oy, where she worked
as Human Resource Manager.
Erik Bengtsson, M.Sc. (Eng.), was appointed Senior Vice President, Sweden,
Managing Director of Cramo Sverige AB and member of the Cramo Group management
team as of 15 June 2008. Bengtsson previously worked as Cramo's Regional
Manager, Region East, in Sweden.
The Group's reporting structure changed on 15 June. The managing directors of
Cramo Denmark and Cramo Norway, who previously reported to the managing director
of Cramo Sweden, will hereafter report to Vesa Koivula, President and CEO.
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
In June, the European Rental Association (ERA) published its estimate of the
size of the European equipment rental markets in 2007. According to the ERA, the
value of the equipment rental market in Finland was around EUR 420 million, in
Sweden EUR 700 million, in Norway EUR 735 million, in Denmark 550 million, in
Poland EUR 200 million, in the Czech Republic EUR 70 million, in Slovakia EUR 30
million, in Estonia EUR 60 million, in Latvia EUR 60 million and in Lithuania
EUR 50 million.
Consolidated sales from Cramo's equipment rental business came to EUR 245.4
(191.4) million, showing an increase of 28.2 per cent. Sales by geographical
segment were as follows: Finland 16.9 (17.3) per cent, Sweden 48.9 (51.8) per
cent, Western Europe 20.3 (18.4) per cent and Central and Eastern Europe 13.9
(12.4) per cent.
EBITA for the equipment rental business amounted to EUR 35.9 (35.0) million,
representing 14.7 (18.3) 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 41.5 (33.1) million
for January-June, showing an increase of 25.2 per cent. EBITA totalled EUR 4.7
(4.9) million, or 11.4 (14.7) per cent of sales. Second‑quarter sales totalled
EUR 23.5 (18.3) million, and EBITA amounted to EUR 3.4 (3.7) million, or 14.4
(20.0) per cent of sales.
Sales in the Finnish equipment rental business developed according to plan in
the early part of the year, and the general economic uncertainty has not yet
affected the demand for rental services. Demand for rental services and
rental-related services in particular continued to grow throughout the country.
More and more customers want to purchase several different services from a
single service provider. The increase in the share of lower‑margin services
related to equipment rental, the construction of logistics hubs for heavy
equipment and the general cost increase weakened profitability. Cramo has
initiated measures to enhance profitability. Nevertheless, profitability in 2008
is expected to fall slightly short of last year's levels.
According to the Federation of Finnish Construction Industries (RT),
construction grew by 7.5 per cent in Finland in 2007. On the basis of the
forecast published by RT in April, construction is expected to grow by 4.0 per
cent in 2008 and by 1.5 per cent in 2009. The most significant growth is
expected in commercial construction. The growth in civil engineering will also
continue strongly, and renovation projects will increase steadily. RT predicts a
decrease in housing construction, particularly in single-family home
construction. In June, Euroconstruct forecast that the Finnish construction
industry would grow 3.0 per cent this year and -5.0 per cent next year.
Sweden
The Swedish equipment rental business reported sales of EUR 120.1 (99.2) million
in January-June, showing an increase of 21.0 per cent. EBITA totalled EUR 24.1
(21.1) million, or 20.1 (21.3) per cent of sales, showing an increase of 14.1
per cent. Second-quarter sales came to EUR 65.1 (52.6) million, and EBITA
amounted to EUR 14.1 (11.2) million, or 21.6 (21.4) per cent of sales.
Strong demand for rental services continued in Sweden in the first half of the
year, and the general economic uncertainty did not affect Cramo's business.
Sales developed as expected, and profitability targets were achieved. Swedish
customers also show a growing interest in purchasing construction-related
services from a single supplier. For Cramo, this means increased sales but also
a weaker relative profitability in some areas. Cramo believes it has increased
its market share in the Swedish rental market in the first half of 2008.
According to the forecast published by the Swedish Construction Federation
(Sveriges Byggindustrier), the growth rate for construction in Sweden in 2007
was approximately seven per cent. In March, the Swedish construction industry
still expected construction to grow at a rate of four per cent in 2008, but in
late June it lowered the estimate to three per cent. The growth estimate for
2009 is two per cent. Growth will be slowed by a decline in the growth of
housing construction, although commercial construction will continue to grow
strongly. In June, Euroconstruct forecast that the Swedish construction industry
would grow 3.4 per cent this year and 2.5 per cent next year.
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-June sales of
EUR 49.7 (35.3) million, showing an increase of 40.9 per cent. Compared with
comparative sales for 2007 excluding the Netherlands, the year-on-year growth
rate was 53.8 per cent. Sales increased based on completed growth investments
and acquisitions. EBITA for the first half of the year amounted to EUR 2.7 (2.7)
million, representing 5.4 (7.8) per cent of sales. The comparison figure for
2007 does not include the capital gain from the divestment of the Dutch
operations, EUR 4.0 million, but it does include the first-quarter 2007 results
from the Netherlands, which totalled EUR 0.2 million.
Second-quarter sales totalled EUR 26.7 (16.3) million, showing an increase of
64.1 per cent. Second-quarter EBITA amounted to EUR 2.2 (1.1) million, or 8.4
(6.8) per cent of sales. EBITA for the period was up EUR 1.1 million, or 101.9
per cent.
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. The measures that were initiated in the first quarter to enhance
profitability began to have an impact in the second quarter, and profitability
improved clearly in Norway. The goal for the latter part of the year is to
increase profitability in both countries. Strong growth in sales is expected to
continue.
In June, Euroconstruct dropped its growth forecast for construction in Denmark.
According to Euroconstruct, 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. Growth has been
strong in Norway in recent years, but Euroconstruct expects it to slow down to
0.8 per cent in 2008 and to decrease by 1.9 per cent in 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, Russia and (as of 1 April 2008) Slovakia.
Rental business sales in Central and Eastern Europe amounted to EUR 34.1 (23.8)
million, up 43.2 per cent. EBITA totalled EUR 4.5 (6.3) million, or 13.1 (26.3)
per cent of sales.
Second-quarter sales came to EUR 19.8 (13.0) million, up 52.3 per cent.
Second-quarter EBITA amounted to EUR 3.0 (3.5) million, or 15.2 (27.2) per cent
of sales. Equipment rental sales in Central and Eastern Europe were back to the
growth target of over 50 per cent in the second quarter. Sales increased based
on completed growth investments and acquisitions. Techniline s.r.o., operating
in the Czech Republic and Slovakia, was integrated into the Group on 1 April
2008 and SIA Tapeks Noma, from Latvia, on 1 May 2008. The integration of the
acquisitions went as planned. The number of depots increased by 26 to a total of
81 in the second quarter. In addition to acquisitions, new depots were opened in
Poland and Estonia, and in St Petersburg and Yekaterinburg in Russia. Rentals of
construction site huts were launched in Poland and the Czech Republic.
Profitability was strained by the growth in demand levelling off in the Baltic
countries, following the slowdown in construction in the region, and by the
expenses related to the launch and expansion of operations at Cramo Rentakran, a
joint venture in Russia. Profitability also decreased because of stiffer
competition and the consequent drop in prices in the Baltic countries, where
Cramo adjusted its equipment investments to match demand. Despite the weakening
of the market in the Baltics, Cramo's sales in the Baltic countries increased by
16 per cent in the first half of the year. At the same time sales in Central
Europe (Poland, Czech Republic and Slovakia) increased by 80 per cent and sales
in Russia by 221 per cent.
Cramo continues to aim at consolidating its position in the growing Central and
Eastern European market, in both new and existing market areas. While strong
expansion will affect the overall profitability for 2008, Cramo still expects
its profitability to remain at a good level.
Demand for rental services in Central and Eastern Europe is boosted by the
growing popularity of rental services, as well as by the strong growth in
construction outside the Baltic countries.
According to the forecast published by Euroconstruct in December, construction
will grow by 9.5 per cent in Russia in 2008. Growth will be seen in civil
engineering projects, residential construction and commercial construction.
Survey results released in June projected that construction is going to take a
downturn in Estonia and Latvia. The Estonian market will decrease by seven per
cent in 2008 and one per cent in 2009, mainly on account of a heavy drop in
residential construction. 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. The equipment
rental market is also expected to see strong growth in Poland as a result of the
construction projects related to the European Football Championships in 2012. 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. Civil engineering
projects are the most rapidly growing sector in the country.
MODULAR SPACE
The modular space business recorded January-June sales of EUR 38.8 (36.0)
million. Sales were up 7.8 per cent year on year. Rental operations accounted
for more than 70 per cent of sales. Rental revenue increased over 20 per cent
over the previous year's level, whereas the sales revenue was down from the
previous year. EBITA totalled EUR 11.7 (9.2) million, showing an increase of
26.8 per cent, and was 30.1 (25.6) per cent of sales. Profitability improved
clearly from the previous year and was at an excellent level.
Second-quarter sales came to EUR 20.3 (18.2) million, up by 11.9 percent.
Second-quarter EBITA amounted to EUR 6.0 (4.4) million, or 29.3 (24.4) per cent
of sales.
Sales and performance continued to develop favourably in the second quarter.
Both utilisation rates and the order book value remained high in all Nordic
countries. Profitability developed particularly well in Sweden. In Finland,
competition for the supply of modular spaces is on the increase, but strong
market growth has kept the price level and profitability good. Norway and
Denmark are showing increasing interest in modular spaces, and Cramo has
responded by quickly expanding its operations. In accordance with its strategy,
Cramo aims to further 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.
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 63.7 (52.2) million or 21.8 (22.7) per cent of the total
consolidated sales, Sweden EUR 136.7 (118.8) million or 46.7 (51.6) per cent,
Western Europe EUR 56.5 (35.3) million or 19.3 (15.3) per cent and Central and
Eastern Europe EUR 35.9 (23.8) million or 12.3 (10.4) per cent. These figures
include both the equipment rental business and the modular space business.
SHARES AND SHARE CAPITAL
On 30 June 2008, Cramo Plc had share capital of EUR 24,835,753.09 and the total
number of shares was 30,660,189.
ANNUAL GENERAL MEETING
On 23 April 2008, the Annual General Meeting of Shareholders of Cramo Plc
reviewed the matters falling within its scope under the Articles of Association,
the proposals of the Board of Directors concerning authorisation to acquire own
shares and to transfer treasury shares and the Board's proposals concerning the
authorisation to decide on share issue and issuing special rights entitling to
shares.
The Annual General Meeting adopted the consolidated financial statements and the
parent company's financial statements for the 2007 financial year, and it
discharged the members of the Board of Directors and the CEO from liability. The
dividend was confirmed at EUR 0.65 per share.
The number of the members of the Board of Directors was confirmed as seven. The
following members were re-elected: Mr Stig Gustavson, Mr Gunnar Glifberg, Mr
Eino Halonen, Mr Hannu Krogerus, Mr Esko Mäkelä and Mr Juhani Nurminen. Mr
Fredrik Cappelen was elected as a new member of the Board of Directors. At its
constitutive meeting, the Board of Directors elected Mr Stig Gustavson as its
chairman and Mr Eino Halonen as its deputy chairman. Mr Eino Halonen was elected
Chairman of the Audit Committee, with Mr Esko Mäkelä and Mr Juhani Nurminen as
ordinary members. Mr Stig Gustavson was elected Chairman of the Nomination and
Compensation Committee, with Mr Gunnar Glifberg and Mr Hannu Krogerus as
ordinary members.
The Annual General meeting confirmed the remuneration payable to the chairman of
the Board of Directors as EUR 60,000, to the deputy chairman as EUR 40,000 and
to the other members of the Board as EUR 30,000 annually. Of the remuneration,
40 per cent is to be paid as Cramo Plc shares and the remaining 60 per cent in
cash. The remuneration for the non-Finnish Board members may be paid fully in
cash. An attendance fee of EUR 1,000 per Board committee meeting was also
confirmed.
The Annual General Meeting authorised the Board of Directors to decide on the
acquisition of a maximum of 3,066,000 of the company's own shares in one or
several tranches. The company, together with its subsidiaries, cannot at any
time hold more than 10 per cent of all of its registered shares. The Annual
General Meeting authorised the Board of Directors to decide on the transfer of
treasury shares in one or several tranches. The maximum number of shares that
may be transferred is 3,066,000. The Annual General Meeting authorised the Board
of Directors to decide on a share issue and issue of option rights, convertible
bonds and other special rights entitling the holder to shares as referred to in
Chapter 10, section 1, of the Finnish Limited Liability Companies Act. Under the
authorisation, the company may issue a maximum of 6,132,000 new shares in one or
several tranches. The Annual General Meeting authorised the Board of Directors
to resolve upon all of the terms for the share issue and granting of the special
rights entitling the holder to shares. The authorisation does not allow the
Board of Directors to resolve upon the personnel option plan. The share issue
and granting of special rights with entitlement to shares may be carried out as
a directed share issue, provided that a weighty financial reason exists for the
company to do so.
All of the authorisations granted by the Annual General Meeting shall remain in
force until the next Annual General Meeting of Shareholders, or no later than 23
September 2009.
Tomi Englund, APA, and Ernst & Young Oy, a firm of authorised public
accountants, with Erkka Talvinko, APA, as the auditor with principal
responsibility, were appointed as the company's auditors.
CHANGES IN SHAREHOLDINGS
UBS AG notified Cramo that the holdings of UBS AG (Switzerland) and UBS AG
London Branch in Cramo Plc had dropped below the five per cent limit on 24 April
2008. At the time, the companies held a total of 100,299 Cramo Plc shares,
representing 0.33 per cent of shares and votes.
Morgan Stanley notified Cramo that the holdings of Morgan Stanley & Co
International plc, Morgan Stanley & Co. Incorporated and MSDW Equity Financing
Services in Cramo Plc had exceeded the five per cent limit on 25 April 2008. At
the time, the companies held a total of 2,629,852 Cramo Plc shares, representing
8.57 per cent of shares and votes.
Morgan Stanley notified Cramo that the holdings of Morgan Stanley & Co
International plc and Morgan Stanley & Co. Incorporated in Cramo Plc had dropped
under the five per cent limit on 29 April 2008. At the time, the companies held
a total of 1,194,008 Cramo Plc shares, representing 3.89 per cent of shares and
votes.
UBS AG notified Cramo that the holdings of UBS AG (Switzerland), UBS AG London
Branch and UBS O'Connor LLC in Cramo Plc had exceeded the five per cent limit on
2 May 2008. At the time, the companies held a total of 1,968,793 Cramo Plc
shares, representing 6.42 per cent of shares and votes.
Morgan Stanley notified Cramo that the holdings of Morgan Stanley & Co
International plc and Morgan Stanley & Co. Incorporated in Cramo Plc had
exceeded the five per cent limit on 2 May 2008. At the time, the companies held
a total of 2,542,769 Cramo Plc shares, representing 8.29 per cent of shares and
votes.
Morgan Stanley notified Cramo that the holdings of Morgan Stanley & Co
International plc and Morgan Stanley & Co. Incorporated in Cramo Plc had dropped
below the five per cent limit on 6 May 2008. At the time, the companies held a
total of 1,172,239 Cramo Plc shares, representing 3.82 per cent of shares and
votes.
UBS AG notified Cramo that the holdings of UBS AG (Switzerland), UBS AG London
Branch and UBS O'Connor LLC in Cramo Plc had dropped below the five per cent
limit on 14 May 2008. At the time, the companies held a total of 1,453,431 Cramo
Plc shares, representing 4.74 per cent of shares and votes.
UBS AG notified Cramo that the holdings of UBS AG (Switzerland), UBS AG London
Branch and UBS O'Connor LLC in Cramo Plc had exceeded the five per cent limit on
23 May 2008. At the time, the companies held a total of 1,551,620 Cramo Plc
shares, representing 5.06 per cent of shares and votes.
UBS AG notified Cramo that the holdings of UBS AG London Branch in Cramo Plc had
dropped below the five per cent limit on 2 June 2008. At the time, the company
held a total of 1,532,885 Cramo Plc shares, representing 4.99 per cent of shares
and votes.
UBS AG notified Cramo that the holdings of UBS AG (Switzerland) and UBS AG
London Branch in Cramo Plc had exceeded the five per cent limit on 3 June 2008.
At the time, the companies held a total of 1,540,622 Cramo Plc shares,
representing 5.02 per cent of shares and votes.
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 June 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.
OUTLOOK FOR THE NEXT 12 MONTHS
In spite of instability in financial markets, growth in rental services is
expected to continue in Cramo's business environment. In the Nordic countries,
construction is predicted to continue growing in 2008, albeit at a lower rate
compared to previous years. Even though overall growth in construction sees a
decline in residential construction, industrial and commercial construction and
civil engineering will continue to grow. In 2009, the construction sector is
expected to continue to grow in Sweden, whereas there is more uncertainty
regarding the other Nordic countries. Central and Eastern Europe are expected to
see sustained growth. In the Baltics the construction market is down.
Equipment rental services are expected to grow faster compared to construction.
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 needs for increasingly flexible space
solutions.
In 2008, the Group's growth and geographic expansion have triggered a high
equipment investment activity. However, the level of capital expenditure will
normalise in the Nordic countries in 2009. Investments will continue in the
growing Central and Eastern European markets.
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, and the success of the
Group's acquisitions.
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. Beyond,
however, sudden macroeconomic developments may change this picture.
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 | 30.6.08 | 30.6.07 | 31.12.07 |
| (EUR 1,000) | | | |
--------------------------------------------------------------------------------
| ASSETS | | | |
--------------------------------------------------------------------------------
| NON-CURRENT ASSETS | | | |
--------------------------------------------------------------------------------
| Property, plant and equipment | 614,793 | 426,366 | 487,038 |
--------------------------------------------------------------------------------
| Goodwill | 161,643 | 149,563 | 152,367 |
--------------------------------------------------------------------------------
| Other intangible assets | 110,545 | 90,641 | 95,359 |
--------------------------------------------------------------------------------
| Available-for-sale investments | 371 | 333 | 332 |
--------------------------------------------------------------------------------
| Receivables | 3,896 | 1,682 | 3,954 |
--------------------------------------------------------------------------------
| Deferred income tax assets | 8,552 | 4,320 | 2,974 |
--------------------------------------------------------------------------------
| TOTAL NON-CURRENT ASSETS | 899,800 | 672,905 | 742,024 |
--------------------------------------------------------------------------------
| CURRENT ASSETS | | | |
--------------------------------------------------------------------------------
| Inventories | 20,110 | 16,410 | 16,903 |
--------------------------------------------------------------------------------
| Trade and other receivables | 136,278 | 116,936 | 117,548 |
--------------------------------------------------------------------------------
| Cash and cash equivalents | 16,366 | 17,346 | 18,489 |
--------------------------------------------------------------------------------
| TOTAL CURRENT ASSETS | 172,754 | 150,692 | 152,940 |
--------------------------------------------------------------------------------
| TOTAL ASSETS | 1,072,555 | 823,597 | 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 | 6,783 | 5,163 | 6,334 |
--------------------------------------------------------------------------------
| Translation differences | -2,370 | -734 | -1,867 |
--------------------------------------------------------------------------------
| Retained earnings | 124,579 | 84,609 | 117,351 |
--------------------------------------------------------------------------------
| TOTAL EQUITY | 340,855 | 300,900 | 333,680 |
--------------------------------------------------------------------------------
| RESERVES | | | |
--------------------------------------------------------------------------------
| Reserves | 234 | 303 | 363 |
--------------------------------------------------------------------------------
| NON-CURRENT LIABILITIES | | | |
--------------------------------------------------------------------------------
| Deferred income tax liabilities | 75,390 | 58,397 | 62,200 |
--------------------------------------------------------------------------------
| Interest bearing liabilities | 317,020 | 300,583 | 274,087 |
--------------------------------------------------------------------------------
| CURRENT LIABILITIES | | | |
--------------------------------------------------------------------------------
| Trade and other payables | 124,163 | 90,466 | 115,247 |
--------------------------------------------------------------------------------
| Interest bearing liabilities | 214,893 | 72,948 | 109,387 |
--------------------------------------------------------------------------------
| TOTAL LIABILITIES | 731,466 | 522,394 | 560,921 |
--------------------------------------------------------------------------------
| TOTAL EQUITY AND LIABILITIES | 1,072,555 | 823,597 | 894,964 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CONSOLIDATED | 4-6/08 | 4-6/07 | 1-6/08 | 1-6/07 | 1-12/07 |
| INCOME STATEMENT | | | | | |
| 1 January - | | | | | |
| 30 June 2008 | | | | | |
| (EUR 1,000) | | | | | |
--------------------------------------------------------------------------------
| SALES | 154,015 | 116,396 | 280,789 | 223,693 | 496,428 |
--------------------------------------------------------------------------------
| Other operating income | 7,222 | 5,552 | 8,897 | 6,546 | 7,798 |
--------------------------------------------------------------------------------
| Change in inventories | 391 | 863 | 982 | 1,637 | 966 |
| in finished goods and | | | | | |
| in work in progress | | | | | |
--------------------------------------------------------------------------------
| Production for own use | 5,257 | 3,317 | 9,967 | 6,441 | 15,379 |
--------------------------------------------------------------------------------
| Materials and services | -34,455 | -22,839 | -62,323 | -46,322 | -106,396 |
--------------------------------------------------------------------------------
| Employee benefits | -31,746 | -25,005 | -60,182 | -48,702 | -101,608 |
--------------------------------------------------------------------------------
| Depreciation | -21,514 | -14,773 | -40,214 | -29,064 | -62,356 |
--------------------------------------------------------------------------------
| Amortisation on | -1,940 | -1,042 | -3,124 | -2,109 | -4,119 |
| intangible assets | | | | | |
| resulting from | | | | | |
| acquisitions | | | | | |
--------------------------------------------------------------------------------
| Other operating | -48,491 | -41,085 | -89,821 | -75,146 | -154,248 |
| expenses | | | | | |
--------------------------------------------------------------------------------
| OPERATING PROFIT | 28,738 | 21,384 | 44,970 | 36,974 | 91,844 |
--------------------------------------------------------------------------------
| % of sales | 18.7 | 18.4 | 16.0 | 16.5 | 18.5 |
--------------------------------------------------------------------------------
| Finance costs (net) | -5,650 | -3,186 | -10,561 | -7,149 | -16,036 |
--------------------------------------------------------------------------------
| PROFIT BEFORE TAXES | 23,088 | 18,198 | 34,409 | 29,825 | 75,808 |
--------------------------------------------------------------------------------
| % of sales | 15.0 | 15.6 | 12.3 | 13.3 | 15.3 |
--------------------------------------------------------------------------------
| Income taxes | -7,196 | -3,334 | -10,511 | -6,240 | -18,323 |
--------------------------------------------------------------------------------
| PROFIT FOR THE PERIOD | 15,892 | 14,864 | 23,898 | 23,585 | 57,485 |
--------------------------------------------------------------------------------
| % of sales | 10.3 | 12.8 | 8.5 | 10.5 | 11.6 |
--------------------------------------------------------------------------------
| Earnings per share, | 0.52 | 0.49 | 0.78 | 0.77 | 1.88 |
| undiluted, EUR | | | | | |
--------------------------------------------------------------------------------
| Earnings per share, | 0.52 | 0.48 | 0.78 | 0.76 | 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 | | | | | | -3,552 | | -3,552 |
| slat | | | | | | | | |
| ion | | | | | | | | |
| diff | | | | | | | | |
| eren | | | | | | | | |
| ce | | | | | | | | |
--------------------------------------------------------------------------------
| Hedg | | | | | 1,862 | | | 1,862 |
| ing | | | | | | | | |
| fund | | | | | | | | |
--------------------------------------------------------------------------------
| Prof | | | | | | | 23,585 | 23,585 |
| 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 | | | | | | | 830 | 830 |
| e | | | | | | | | |
| base | | | | | | | | |
| d | | | | | | | | |
| paym | | | | | | | | |
| ents | | | | | | | | |
--------------------------------------------------------------------------------
| Tota | 24,835 | 0 | 186,910 | 117 | 5,163 | -734 | 84,609 | 300,900 |
| l | | | | | | | | |
| equi | | | | | | | | |
| ty | | | | | | | | |
| on | | | | | | | | |
| 30.6 | | | | | | | | |
| . | | | | | | | | |
| 2007 | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Tota | 24,835 | 0 | 186,910 | 117 | 6,334 | -1,867 | 117,351 | 333,680 |
| l | | | | | | | | |
| equi | | | | | | | | |
| ty | | | | | | | | |
| on | | | | | | | | |
| 1.1. | | | | | | | | |
| 2008 | | | | | | | | |
--------------------------------------------------------------------------------
| Tran | | | | | | -503 | 1,751 | 1,248 |
| slat | | | | | | | | |
| ion | | | | | | | | |
| diff | | | | | | | | |
| eren | | | | | | | | |
| ce | | | | | | | | |
--------------------------------------------------------------------------------
| Hedg | | | | | 449 | | | 449 |
| ing | | | | | | | | |
| fund | | | | | | | | |
--------------------------------------------------------------------------------
| Prof | | | | | | | 23,898 | 23,898 |
| it | | | | | | | | |
| for | | | | | | | | |
| the | | | | | | | | |
| peri | | | | | | | | |
| od | | | | | | | | |
--------------------------------------------------------------------------------
| Exer | | | | | | | | 0 |
| cise | | | | | | | | |
| of | | | | | | | | |
| opti | | | | | | | | |
| ons, | | | | | | | | |
| regi | | | | | | | | |
| ster | | | | | | | | |
| ed | | | | | | | | |
--------------------------------------------------------------------------------
| Divi | | | | | | | -19,929 | -19,929 |
| dend | | | | | | | | |
| dist | | | | | | | | |
| ribu | | | | | | | | |
| tion | | | | | | | | |
--------------------------------------------------------------------------------
| Shar | | | | | | | 1,508 | 1,508 |
| e | | | | | | | | |
| base | | | | | | | | |
| d | | | | | | | | |
| paym | | | | | | | | |
| ents | | | | | | | | |
--------------------------------------------------------------------------------
| Tota | 24,835 | 0 | 186,910 | 117 | 6,783 | -2,370 | 124,579 | 340,855 |
| l | | | | | | | | |
| equi | | | | | | | | |
| ty | | | | | | | | |
| on | | | | | | | | |
| 30.6 | | | | | | | | |
| . | | | | | | | | |
| 2008 | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CONSOLIDATED CASH FLOW STATEMENT | 1-6/08 | 1-6/07 | 1-12/07 |
| (EUR 1,000) | | | |
--------------------------------------------------------------------------------
| CASH FLOW FROM OPERATING | 44,093 | 42,416 | 138,653 |
| ACTIVITIES | | | |
--------------------------------------------------------------------------------
| CASH FLOW FROM INVESTING | -150,998 | -76,242 | -175,234 |
| ACTIVITIES | | | |
--------------------------------------------------------------------------------
| CASH FLOW FROM FINANCING | | | |
| ACTIVITIES | | | |
--------------------------------------------------------------------------------
| Proceeds from issue of share | 0 | 1,258 | 1,258 |
| capital | | | |
--------------------------------------------------------------------------------
| Dividends paid | -19,929 | -15,326 | -15,326 |
--------------------------------------------------------------------------------
| Increase(+)/decrease(-) in | 101,344 | 26,865 | 34,393 |
| liabilities | | | |
--------------------------------------------------------------------------------
| Increase(+)/decrease(-) in lease | 23,327 | -2,972 | -6,590 |
| liabilities | | | |
--------------------------------------------------------------------------------
| CASH FLOW FROM FINANCING | 104,742 | 9,826 | 13,735 |
| ACTIVITIES, TOTAL | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| NET CHANGE IN CASH AND CASH | -2,163 | -24,000 | -22,846 |
| EQUIVALENTS | | | |
--------------------------------------------------------------------------------
| CASH AND CASH EQUIVALENTS AT | 18,489 | 41,823 | 41,823 |
| PERIOD-START | | | |
--------------------------------------------------------------------------------
| Translation difference | 40 | -478 | -488 |
--------------------------------------------------------------------------------
| CASH AND CASH EQUIVALENTS AT | 16,366 | 17,346 | 18,489 |
| PERIOD-END | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CONTINGENT LIABILITIES | 30.6.08 | 30.6.07 | 31.12.07 |
| (EUR 1,000) | | | |
--------------------------------------------------------------------------------
| On own behalf | | | |
--------------------------------------------------------------------------------
| Mortgages on real estates | 0 | 5,663 | 5,663 |
--------------------------------------------------------------------------------
| Mortgages on companies | 83,317 | 77,487 | 77,489 |
--------------------------------------------------------------------------------
| Pledges | 80,156 | 107,212 | 159,759 |
--------------------------------------------------------------------------------
| Other contingent liabilities | 8,724 | 7,065 | 9,541 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| DERIVATIVE | 30.6.08 | 30.6.08 | 30.6.07 | 30.6.07 | 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 | 132,850 | 6,867 | 140,180 | 6,976 | 138,395 | 5,492 |
--------------------------------------------------------------------------------
| Options | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Foreign | | | | | | |
| exchange | | | | | | |
| contracts | | | | | | |
--------------------------------------------------------------------------------
| Forwards and | 151,613 | -364 | | | 87,150 | -194 |
| swaps | | | | | | |
--------------------------------------------------------------------------------
| Options | 30,000 | -37 | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| KEY FIGURES | 30.6.08 | 30.6.07 | Change % | 31.12.07 |
--------------------------------------------------------------------------------
| Value of outstanding orders | 101,014 | 93,698 | 7.8 | 94,559 |
| for modular space, EUR 1,000 | | | | |
--------------------------------------------------------------------------------
| Value of orders for modular | 92,709 | 84,113 | 10.2 | 89,250 |
| space rental, EUR 1,000 | | | | |
--------------------------------------------------------------------------------
| Value of orders for sale of | 8,305 | 9,585 | -13.4 | 5,309 |
| modular space, EUR 1,000 | | | | |
--------------------------------------------------------------------------------
| Gross capital expenditure, | 134,081 | 92,994 | 44.2 | 175,494 |
| EUR 1,000 | | | | |
--------------------------------------------------------------------------------
| % sales | 47,8 | 41.6 | | 35.4 |
--------------------------------------------------------------------------------
| Average personnel | 2,463 | 2,063 | 19.3 | 2,070 |
--------------------------------------------------------------------------------
| Earnings per share (EPS) | 0.88 | 0.82 | 7.3 | 2.00 |
| before amortisation of | | | | |
| intangible assets resulting | | | | |
| from acquisitions, diluted, | | | | |
| EUR | | | | |
--------------------------------------------------------------------------------
| Earnings per share, | 0.78 | 0.77 | 1.3 | 1.88 |
| undiluted, EUR | | | | |
--------------------------------------------------------------------------------
| Earnings per share, diluted | 0.78 | 0.76 | 2.6 | 1.87 |
| 1), EUR | | | | |
--------------------------------------------------------------------------------
| Shareholders' equity per | 11.12 | 9.81 | 13.4 | 10.88 |
| share 2), EUR | | | | |
--------------------------------------------------------------------------------
| Equity ratio, % | 32.0 | 36.9 | | 37.3 |
--------------------------------------------------------------------------------
| Net interest-bearing | 515,547 | 356,186 | 44.7 | 364,985 |
| liabilities, EUR 1,000 | | | | |
--------------------------------------------------------------------------------
| Gearing, % | 151.3 | 118.4 | | 109.4 |
--------------------------------------------------------------------------------
| Issue-adjusted average | 30,660,18 | 30,511,89 | | 30,586,04 |
| number of shares | 9 | 0 | | 0 |
--------------------------------------------------------------------------------
| Issue-adjusted number of | 30,660,18 | 30,660,18 | | 30,660,18 |
| shares at the period-end | 9 | 9 | | 9 |
--------------------------------------------------------------------------------
| Number of shares adjusted by | 30,660,18 | 31,156,26 | | 30,815,56 |
| the dilution effect of share | 9 | 8 | | 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, | 4-6/08 | 4-6/07 | 1-6/08 | 1-6/07 | 1-12/07 |
| (EUR 1,000) | | | | | |
--------------------------------------------------------------------------------
| Equipment rental | | | | | |
--------------------------------------------------------------------------------
| - Finland | 23,457 | 18,317 | 41,468 | 33,131 | 75,761 |
--------------------------------------------------------------------------------
| - Sweden | 65,062 | 52,564 | 120,056 | 99,200 | 214,515 |
--------------------------------------------------------------------------------
| - Western Europe | 26,743 | 16,292 | 49,733 | 35,292 | 77,462 |
--------------------------------------------------------------------------------
| - Central and Eastern | 19,802 | 13,004 | 34,102 | 23,818 | 58,202 |
| Europe | | | | | |
--------------------------------------------------------------------------------
| Equipment rental, total | 135,06 | 100,177 | 245,357 | 191,441 | 425,940 |
| | 2 | | | | |
--------------------------------------------------------------------------------
| - between the segments | -62 | -55 | -110 | -98 | -227 |
--------------------------------------------------------------------------------
| Modular space | 20,325 | 18,167 | 38,776 | 35,974 | 76,733 |
--------------------------------------------------------------------------------
| - between the segments | -1,310 | -1,893 | -3,234 | -3,623 | -6,017 |
--------------------------------------------------------------------------------
| Eliminations | -1,372 | -1,948 | -3,344 | -3,721 | -6,244 |
--------------------------------------------------------------------------------
| Sales, total | 154,01 | 116,396 | 280,789 | 223,693 | 496,428 |
| | 5 | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Netherlands' share of | 0 | 0 | 0 | 2,954 | 2,954 |
| Western Europe | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating profit (EBITA) | 4-6/08 | 4-6/07 | 1-6/08 | 1-6/07 | 1-12/07 |
| before amortisation on | | | | | |
| intangible assets resulting | | | | | |
| from acquisitions by | | | | | |
| business segment, | | | | | |
| (EUR 1,000) | | | | | |
--------------------------------------------------------------------------------
| Equipment rental | | | | | |
--------------------------------------------------------------------------------
| - Finland | 3,370 | 3,669 | 4,709 | 4,858 | 14,493 |
--------------------------------------------------------------------------------
| - Sweden | 14,056 | 11,238 | 24,074 | 21,095 | 47,952 |
--------------------------------------------------------------------------------
| - Western Europe | 2,243 | 1,111 | 2,685 | 2,749 | 6,487 |
--------------------------------------------------------------------------------
| - Central and Eastern | 3,004 | 3,542 | 4,479 | 6,259 | 17,082 |
| Europe | | | | | |
--------------------------------------------------------------------------------
| Equipment rental, total | 22,673 | 19,560 | 35,947 | 34,961 | 86,014 |
--------------------------------------------------------------------------------
| Modular space | 5,956 | 4,441 | 11,657 | 9,196 | 19,358 |
--------------------------------------------------------------------------------
| | 6,025 | 4,026 | 6,025 | 4,026 | 4,026 |
--------------------------------------------------------------------------------
| Non-allocated Group | -3,745 | -5,546 | -4,930 | -8,775 | -12,859 |
| activities | | | | | |
--------------------------------------------------------------------------------
| Eliminations | -233 | -55 | -605 | -325 | -576 |
--------------------------------------------------------------------------------
| Operating profit, total | 30,679 | 22,426 | 48,095 | 39,083 | 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 capital
gain from the divestment of Dutch operations was previously presented under the
operating profit for Western Europe. However, to make the performance of the
Norwegian and Danish rental businesses comparable, the capital gain will
hereafter be presented as part of non-allocated capital gains. 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 | 4-6/08 | 4-6/07 | 1-6/08 | 1-6/07 | 1-12/07 |
| segment | | | | | |
--------------------------------------------------------------------------------
| Equipment rental | | | | | |
--------------------------------------------------------------------------------
| - Finland | 14.4 | 20.0 | 11.4 | 14.7 | 19.1 |
--------------------------------------------------------------------------------
| - Sweden | 21.6 | 21.4 | 20.1 | 21.3 | 22.4 |
--------------------------------------------------------------------------------
| - Western Europe | 8.4 | 6.8 | 5.4 | 7.8 | 8.4 |
--------------------------------------------------------------------------------
| - Central and Eastern | 15.2 | 27.2 | 13.1 | 26.3 | 29.3 |
| Europe | | | | | |
--------------------------------------------------------------------------------
| Equipment rental, total | 16.8 | 19.5 | 14.7 | 18.3 | 20.2 |
--------------------------------------------------------------------------------
| Modular space | 29.3 | 24.4 | 30.1 | 25.6 | 25.2 |
--------------------------------------------------------------------------------
| Non-allocated Group | | | | | |
| activities | | | | | |
--------------------------------------------------------------------------------
| EBITA-%, total | 19.9 | 19.3 | 17.1 | 17.5 | 19.3 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Sales by geographical | 4-6/08 | 4-6/07 | 1-6/08 | 1-6/07 | 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 | 36,906 | 27,023 | 63,724 | 52,186 | 113,416 |
--------------------------------------------------------------------------------
| Sweden | 73,796 | 64,027 | 136,651 | 118,837 | 248,456 |
--------------------------------------------------------------------------------
| Western Europe | 30,444 | 16,292 | 56,531 | 35,292 | 85,177 |
--------------------------------------------------------------------------------
| Other Europe | 20,924 | 13,004 | 35,915 | 23,818 | 58,278 |
--------------------------------------------------------------------------------
| Eliminations | -8,056 | -3,949 | -12,032 | -6,439 | -8,897 |
--------------------------------------------------------------------------------
| Sales, total | 154,01 | 116,396 | 280,789 | 223,693 | 496,428 |
| | 5 | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Netherlands' share of | 0 | 0 | 0 | 2,954 | 2,954 |
| Western Europe | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| FINANCIAL | 4-6/08 | 1-3/08 | 10-12/07 | 7-9/07 | 7/07- | 1-12/07 |
| PER- | | | | | 6/08 | |
| FORMANCE BY | | | | | | |
| QUARTERS | | | | | | |
--------------------------------------------------------------------------------
| Sales | 154,015 | 126.774 | 143.773 | 128.962 | 553.524 | 496,428 |
--------------------------------------------------------------------------------
| EBITA | 30,679 | 17.416 | 26.144 | 30.736 | 104.975 | 95,963 |
--------------------------------------------------------------------------------
| EBITA-% | 19.9 | 13.6 | 18.2 | 23.8 | 19.0 | 19.3 |
--------------------------------------------------------------------------------
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, 12 August 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 12 August 2008 in the
afternoon.
The January-September interim report will be published on 11 November 2008.
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
OMX Nordic Exchange Helsinki
Principal media
www.cramo.com
