Vantaa, Finland, 2015-05-05 08:00 CEST (GLOBE NEWSWIRE) -- Cramo Plc Interim Report 5th May 2015, at 9.00 am Finnish time (EET)
Cramo’s Interim Report January–March 2015
Sales growth and improved profitability
1–3/2015 highlights (the 1–3/2014 comparison figures in brackets)
- Sales EUR 147.1 (140.3) million; the change was 4.8%. In local currencies, sales grew by 8.6%.
- EBITDA EUR 34.3 (27.8) million.
- EBITA EUR 10.1 (4.4) million and EBITA margin 6.9% (3.1%).
- Earnings per share EUR 0.09 (-0.03).
- Cash flow from operating activities EUR 2.5 (8.1) million and cash flow after investments EUR -27.8 (-10.7) million.
- Gearing 92.9% (76.3%).
- Acquisition of equipment rental company Vuokra-Pekat Oy in Finland and the assets of Visby Hyrmaskiner AB in Sweden.
- Cramo has decided to publish quarterly financial information also by product area.
- The Annual General Meeting decided that a dividend of EUR 0.55 per share be paid.
Guidance for 2015 unchanged: 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) | 1-3/15 | 1-3/14 | Change % | 1-12/14 |
| Income statement | ||||
| Sales | 147.1 | 140.3 | 4.8 % | 651.8 |
| EBITDA | 34.3 | 27.8 | 23.3 % | 167.3 |
| EBITA before non-recurring items 1) 2) | 10.1 | 4.4 | 132.1 % | 73.2 |
| % of sales | 6.9% | 3.1% | 11.2% | |
| EBITA after non-recurring items 1) 2) | 10.1 | 4.4 | 132.1 % | 70.3 |
| % of sales | 6.9% | 3.1% | 10.8% | |
| Operating profit (EBIT) | 8.0 | 1.8 | 344.1 % | 34.3 |
| Profit before taxes (EBT) | 4.9 | -1.6 | 21.5 | |
| Profit for the period | 3.9 | -1.3 | 16.0 | |
| Share related information | ||||
| Earnings per share (EPS) before non-recurring items, EUR 3) | 0.09 | -0.03 | 0.91 | |
| Earnings per share (EPS), EUR | 0.09 | -0.03 | 0.37 | |
| Earnings per share (EPS), diluted, EUR | 0.09 | -0.03 | 0.36 | |
| Shareholders’ equity per share, EUR | 10.11 | 11.36 | -11.0 % | 10.40 |
| Other information | ||||
| Return on investment, % 4) | 4.9 % | 7.6 % | 4.2 % | |
| Return on equity, % 4) | 4.5 % | 8.5 % | 3.4 % | |
| Equity ratio, % | 42.3 % | 46.5 % | 43.9 % | |
| Gearing, % | 92.9 % | 76.3 % | 84.7 % | |
| Net interest-bearing liabilities | 412.4 | 375.5 | 9.8 % | 385.4 |
| Gross capital expenditure (incl. acquisitions) | 41.5 | 27.3 | 52.0 % | 159.1 |
| of which acquisitions/business combinations | 8.5 | 11.4 | ||
| Cash flow from operating activities | 2.5 | 8.1 | -69.6 % | 118.3 |
| Cash flow after investments | -27.8 | -10.7 | -6.5 | |
| Average number of personnel (FTE) | 2,487 | 2,474 | 0.5 % | 2,528 |
| Number of personnel at period end (FTE) | 2,494 | 2,486 | 0.3 % | 2,473 |
| 1) EBITA is operating profit before amortisation and impairment resulting from acquisitions and disposals | ||||
| 2) Full year 2014 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 non-recurring costs at the Group level. | ||||
| 3) Full year 2014 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. | ||||
| 4) Rolling 12 month. In 2015, first quarter comparable return on investment before the effect of the non-recurring items for 2014 was 8.2% (7.6%) and comparable return on equity before the effect of the non-recurring items for 2014 was 9.6% (8.5%). | ||||
CEO VESA KOIVULA'S COMMENT
The start of 2015 has been promising for Cramo
“In a seasonally weak first quarter, our sales grew and results improved compared to the corresponding period last year. The positive development started in the autumn of 2014 , thanks to both our own performance improvement actions and the improved market situation. In the beginning of 2015, the market situation continued to strengthen particularly in Sweden, as well as in Central Europe and in many locations in Eastern Europe.
During the first quarter, our sales grew clearly and amounted to EUR 147.1 million. Sales grew in all our business segments, except for Norway and Denmark. Product area Modular Space grew strongly in the quarter.
Our EBITA grew by EUR 5.8 million and our EBITA margin increased from 3.1% to 6.9%. The EBITA margin improved in all of our business segments with the exception of Finland where it was slightly lower than in the previous year. It is particularly encouraging to witness the strong profit development in Sweden and the turn of the Danish operations to profit. In Norway, we also managed to improve our profitability, thanks to cost savings implemented last year. In Central Europe, the result still remained negative, as expected, but fleet utilisation rates improved year-on-year.
In order to further improve profitability, we continue the Group’s performance improvement actions in 2015, especially with regard to direct costs. “For a Great day at Work”, our customer promises related to the Cramo Story programme, contribute to strengthen our position as the first choice for customers. The adoption of our Performance Management Model will further improve our productivity.
With the current market outlook, I believe that Cramo Group’s sales growth will continue and our profitability will improve compared to the previous year,” says Vesa Koivula, President and CEO of Cramo Group.
SUMMARY OF FINANCIAL PERFORMANCE IN JANUARY–MARCH 2015
Sales
Cramo Group’s consolidated sales for January–March 2015 were EUR 147.1 (140.3) million. The gradual sales improvement that started in 2014 continued. Sales showed a year-on-year increase of 4.8%. In local currencies, sales grew by 8.6%.
Sales developed favourably in all business segments except for Norway and Denmark where operations were restructured in 2014. In Finland, sales grew in local currencies by 5.8%, in Sweden by 12.2%, in Central Europe by 9.3% and in Eastern Europe by 9.6%.
As for product areas, sales growth was 2.1% (5.8% in local currencies) for equipment rental and 22.2% (25.9% in local currencies) for modular space. Demand for modular space remained at a good level in all operating countries.
Costs
The performance improvement actions carried out in 2014 had a positive effect on the Group’s result in early 2015. Fixed costs decreased by EUR 2.1 million year-on-year. In 2015, Cramo continues performance improvement actions especially with regard to direct costs (materials and services).
Results
Profitability improved year-on-year. EBITA was EUR 10.1 (4.4) million, showing a growth of EUR 5.8 million or 132.1%. EBITA margin was 6.9% (3.1%) of sales.
Considering seasonal variation, Finland, Sweden, Norway and Denmark reported good results. In Central and Eastern Europe, results developed favourably but were negative. In Central Europe, fleet utilisation rates improved year-on-year. The result of the Russian-Ukrainian joint venture Fortrent also improved.
As for product areas, equipment rental EBITA was EUR 5.7 (1.2) million, or 4.6% (1.0%) of sales. In modular space (Cramo Adapteo), EBITA was EUR 6.8 (5.9) million, or 30.5% (32.6%) of sales. Cramo has decided to publish financial information by product area for each quarter.
Earnings per share were EUR 0.09 (-0.03).
Cash flow from operating activities was EUR 2.5 (8.1) million. The cash flow was negatively affected by a one-off change in net working capital, the effect of which is expected to reverse back during 2015. Fleet investments are being made somewhat more up front in the year than in 2014, and cash flow from investments was EUR -30.3 (-18.8) million and cash flow after investments EUR -27.8 (-10.7) million. Gross capital expenditure was EUR 41.5 (27.3) million. Gross capital expenditure includes EUR 8.5 (0.0) million for acquisitions, the cash flow effect of which was EUR 5.1 million.
The Group’s gearing was 92.9% (76.3%). The gearing was increased by the one-off change in net working capital decreasing cash flow from operating activities, the dividend liability as well as acquisitions and seasonal fleet investments.
MARKET OUTLOOK
The national economies in Europe are taking an upward turn but growth will still be modest in many countries and there are significant country-specific differences in the estimated economic development. European Central Bank’s monetary stimulus is expected to improve the economic outlook for the eurozone. The decline in oil price is expected to have a positive impact on economic development with the exception of Norway and Russia. 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.
In Europe, market-specific differences are considerable also in the development of construction and the demand for rental services. The construction market analyst Euroconstruct has 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) expects 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.)
GUIDANCE ON GROUP OUTLOOK
The guidance of Cramo Plc’s Board of Directors for 2015 is unchanged: 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.
BRIEFING
Cramo will hold a briefing and a live webcast at Kämp Kansallissali, address: Aleksanterinkatu 44 A (2nd floor) in Helsinki on Tuesday, 5 May 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 5 May 2015 in the afternoon.
PUBLICATION OF FINANCIAL INFORMATION 2015
In 2015, Cramo Plc will publish two more interim reports:
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. 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 with 330 depots. With a group staff around 2.500, Cramo's consolidated sales in 2014 was EUR 652 million. Cramo shares are listed on the NASDAQ OMX Helsinki Ltd.
