Vantaa, Finland, 2013-08-13 08:00 CEST (GLOBE NEWSWIRE) -- Cramo Plc Interim Report 13 August 2013, at 9.00 am Finnish time (GMT+2)
Cramo’s Interim Report 1 January–30 June 2013
Profitability improved in the second quarter
1–6/2013 (year-on-year comparison in brackets):
- Sales EUR 308.6 (321.4) million, the change was -4.0%. Sales change excluding divested operations and restructuring in Russia -1.8%
- EBITA EUR 22.9 (24.9) million and EBITA margin 7.4% (7.7%); comparable EBITA excluding non-recurring items EUR 23.5 (22.7) million, or 7.6 (7.1) per cent of sales
- Earnings per share EUR 0.15 (0.16); comparable earnings per share excluding the effect of non-recurring items EUR 0.20 (0.10)
- Return on equity (rolling 12 months) 8.0% (6.8%)
- Cash flow after investments EUR -10.5 (18.2) million, investment cash flow includes acquisitions totalling EUR -26.8 million
- Gearing 92.4% (79.8%), EUR 50 million hybrid bond redeemed on 29 April 2013
4–6/2013 (year-on-year comparison in brackets):
- Sales EUR 160.1 (161.4) million; the change was -0.8%. Sales change excluding divested operations and restructuring in Russia 1.7%
- EBITA EUR 16.5 (14.3) million and EBITA margin 10.3% (8.9%)
- Earnings per share EUR 0.19 (0.11)
- Cash flow after investments EUR 8.4 (1.1) million
Guidance for 2013 unchanged: Referring to the market outlook, which pictures a high uncertainty in Cramo’s market areas, the Board does not consider it prudent to give a guidance on Group sales either growing or declining in 2013. However, the Group’s business demonstrates a good continuity over time. In 2013, already implemented and on-going efficiency measures are likely to yield an improvement in EBITA margin percentage compared with the previous year.
| KEY FIGURES AND RATIOS (MEUR) | 4-6/13 | 4-6/12 | Change % | 1-6/13 | 1-6/12 | Change % | 1-12/12 |
| Income statement | |||||||
| Sales | 160.1 | 161.4 | -0.8 % | 308.6 | 321.4 | -4.0 % | 688.4 |
| EBITDA | 40.1 | 39.6 | 1.4 % | 69.9 | 75.7 | -7.8 % | 179.6 |
| EBITA 1) | 16.5 | 14.3 | 15.3 % | 22.9 | 24.9 | -8.0 % | 78.0 |
| % of sales | 10.3% | 8.9% | 7.4% | 7.7% | 11.3% | ||
| Operating profit / loss (EBIT) | 13.5 | 11.4 | 18.4 % | 15.2 | 19.0 | -20.1 % | 64.5 |
| Profit / loss before tax (EBT) 2) | 10.1 | 6.1 | 64.7 % | 7.8 | 8.5 | -7.9 % | 44.3 |
| Profit / loss for the period 2) | 7.9 | 4.7 | 68.8 % | 6.1 | 6.5 | -5.6 % | 38.7 |
| Share related information | |||||||
| Earnings per share (EPS), EUR | 0.19 | 0.11 | 65.1 % | 0.15 | 0.16 | -7.6 % | 0.93 |
| Earnings per share (EPS), diluted, EUR | 0.19 | 0.11 | 66.5 % | 0.14 | 0.15 | -6.9 % | 0.93 |
| Shareholders’ equity per share, EUR | 10.97 | 10.65 | 3.0 % | 11.58 | |||
| Other information | |||||||
| Return on investment, % 3), 4) | 6.8 % | 6.9 % | 7.3 % | ||||
| Return on equity, % 3), 4) | 8.0 % | 6.8 % | 7.5 % | ||||
| Equity ratio, % 3) | 42.2 % | 44.5 % | 48.6 % | ||||
| Gearing, % 3) | 92.4 % | 79.8 % | 65.1 % | ||||
| Net interest-bearing liabilities 3) | 428.4 | 392.0 | 9.3 % | 346.9 | |||
| Gross capital expenditure (incl. acquisitions) | 21.6 | 40.8 | -47.1 % | 67.7 | 65.1 | 4.1 % | 125.1 |
| of which acquisition/business combinations | -0.8 | 30.4 | 0.8 | ||||
| Cash flow after investments | 8.4 | 1.1 | 663.6 % | -10.5 | 18.2 | 62.2 | |
| Average number of personnel (FTE) | 2,457 | 2,684 | -8.5 % | 2,664 | |||
| Number of personnel at period end (FTE) | 2,428 | 2,677 | -9.3 % | 2,555 | |||
| 1) EBITA is operating profit before amortisation and impairment resulting from acquisitions and disposals | |||||||
| 2) Based on revised IAS 19 standard (Employee benefits) actuarial gains and losses resulting from the changes in assumptions used in the valuation of pension liabilities are recognised immediately in other operating income. Due to retrospective application the group finance costs for 1-12/12 have been decreased by eur 209 thousand 3) Full year 2012 key figures have been calculated before reclassification of Russian business as assets and liabilities to be transferred to joint venture according to IFRS5 | |||||||
| 4) Rolling 12 month | |||||||
CEO VESA KOIVULA’S COMMENT
“After the difficult first months of the year, the demand for equipment rental picked up in the spring, as expected. At the same time we continued the implementation of our strategy, that is: the roll-out of a uniform business model and efficient processes. When combined with cost savings and efficiency measures completed earlier, this improved our profitability in the second quarter.
It has been good to see that our customers have welcomed our revised Rental Concept warmly and that our staff has been able to achieve many accomplishments in the challenging market situation.
After the quiet first months of the year, our fleet utilisation rates started to improve quickly halfway through the period and rose to a good level towards the end of the period. However, it is still too early to estimate whether we reached the low point of the business cycle in our main markets at the end of the winter season.
Our aim is to improve profitability in all of our markets but especially in Norway, Denmark and Central Europe. Development during the first months of the year shows that we are on the right track,” says Vesa Koivula, President and CEO of Cramo Group.
SUMMARY OF FINANCIAL PERFORMANCE IN JANUARY–JUNE 2013
In January–June 2013, Cramo Group’s consolidated sales were EUR 308.6 (321.4) million, showing a decrease of 4.0 per cent. In local currencies, sales decreased by 5.9 per cent. Sales for the second quarter were EUR 160.1 (161.4) million, showing a change of -0.8 per cent.
Sales were weakened by the divestment of Cramo’s modular space production and customised space rental businesses in Finland in March 2012 as well as by the transfer of the Russian operations to a joint venture on 1 March 2013. The change in sales for January–June excluding divested operations and restructuring in Russia was -1.8 per cent. After the difficult first quarter, demand for rental services picked up in the second quarter. In the second quarter, sales excluding divested operations and restructuring in Russia increased 1.7 per cent.
EBITA for January-June was EUR 22.9 (24.9) million, or 7.4 (7.7) per cent of sales. Comparable EBITA excluding non-recurring items was EUR 23.5 (22.7) million, or 7.6 (7.1) per cent of sales. In the second quarter, profitability improved year-on-year and EBITA was EUR 16.5 (14.3) million, or 10.3 (8.9) per cent of sales. The effect of cost savings and other efficiency measures improved the result. The implementation of Cramo’s strategy has also improved operational efficiency.
EBITDA for January–June was EUR 69.9 (75.7) million, or 22.6 (23.6) per cent of sales. In January–June, earnings per share were EUR 0.15 (0.16) and comparable earnings per share excluding the effect of non-recurring items EUR 0.20 (0.10). Earnings per share for the second quarter improved and were EUR 0.19 (0.11).
During the second quarter, profitability improved in almost all business segments. In Finland and Sweden, the result improved from the beginning of the year and fleet utilisation rates rose to a good level towards the end of the period under review. Profitability continued to develop favourably in Norway and Denmark. After the difficult first months of the year, profitability improved in the second quarter in Central Europe, too, where Cramo’s transition programme proceeded as planned. In Eastern Europe, the result developed favourably especially in the Baltic countries, but the result of the Russian joint venture Fortrent had a negative impact on the profitability of the business segment. Fortrent’s result is expected to improve during the second half of the year. In the modular space business, demand has continued at a high level in all Nordic countries.
In January–June, cash flow from operating activities was EUR 43.1 (53.4) million, gross capital expenditure was EUR 67.7 (65.1) million and net cash flow from investing activities EUR -53.6 (-35.2) million. Gross capital expenditure includes acquisitions and business combinations amounting to EUR 30.4 million, which had EUR -26.8 million cash flow effect. Cash flow after investments was EUR -10.5 (18.2) million. In the second quarter, cash flow after investments improved and was EUR 8.4 (1.1) million.
The Group’s gearing was 92.4 (79.8) per cent at the end of June. Gearing was affected by the acquisitions completed during the first quarter and the redemption of the EUR 50 million hybrid bond in April.
MARKET OUTLOOK
The economic uncertainty in Europe continues. However, market-specific differences in construction activity and demand for rental services are considerable. Despite the economic uncertainty, construction activity and demand for equipment rental services improved in most of Cramo’s market areas in the second quarter.
In its June forecast, the construction market analyst Euroconstruct estimates that construction activity will decline by approximately one per cent from the previous year in Finland in 2013, whereas the Confederation of Finnish Construction Industries RT estimates the decline to be three per cent. Euroconstruct forecasts construction activity in Sweden to decline by approximately one per cent, but the Swedish Construction Federation (Svensk Byggindustrier) forecasts a decline of three per cent. Construction activity is also estimated to decrease in Poland, Estonia, the Czech Republic and Slovakia. According to Euroconstruct, growth can be expected this year in Norway, Denmark, Germany, Latvia, Lithuania and Russia.
The equipment rental market normally grows faster than the underlying construction market, but changes in demand follow those in construction with a small delay and may be strong. According to the forecast published by European Rental Association (ERA) in May, equipment rental will increase in 2013 in all of Cramo’s main market areas.
In spite of an improvement in the equipment rental market after the difficult first months of the year, Cramo is still taking a cautious approach on 2013. The economic situation is believed to improve towards the end of the year in Cramo’s main markets.
(All construction market forecasts presented in this review are estimates by Euroconstruct, unless otherwise stated.)
BRIEFING
Cramo will hold a briefing and a live webcast at Kämp Kansallissali, address: Aleksanterinkatu 44 A, 2nd floor, Helsinki, on Tuesday, 13 August 2013 at 11:00 am. 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 from 13 August 2013 in the afternoon.
PUBLICATION OF FINANCIAL INFORMATION 2013
Cramo will publish one more Interim Report in 2013.
The January–September Interim Report will be published on Wednesday, 30 October 2013.
FURTHER INFORMATION
Vesa Koivula President and CEO, tel. +358 10 661 10, +358 40 510 5710
Martti Ala-Härkönen CFO, tel. +358 10 661 10, +358 40 737 6633
DISTRIBUTION
NASDAQ OMX Helsinki Ltd Principal media www.cramo.com
Cramo is one of the largest equipment rental service companies in Europe, 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 close to 400 depots. With a group staff around 2.550, Cramo's consolidated sales in 2012 was EUR 690 million. Cramo shares are listed on the NASDAQ OMX Helsinki Ltd. Further information: www.cramo.com
