H1 2017 PRESENTATION 26 th OF JULY, 2017 Leif Gustafsson, CEO Aku - - PowerPoint PPT Presentation

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H1 2017 PRESENTATION 26 th OF JULY, 2017 Leif Gustafsson, CEO Aku - - PowerPoint PPT Presentation

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H1 2017 PRESENTATION 26 th OF JULY, 2017 Leif Gustafsson, CEO Aku Rumpunen, CFO Q2 2017 Highlights Comparable EBITA EUR 27.8m (26.6) with margin of 15.6% (14.9%) Good performance continued in Equipment rental Comparable ROE

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SLIDE 1

H1 2017 PRESENTATION 26th OF JULY, 2017

Leif Gustafsson, CEO Aku Rumpunen, CFO

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SLIDE 2

Q2 2017 Highlights

  • Comparable EBITA EUR 27.8m (26.6)

with margin of 15.6% (14.9%)

  • Good performance continued in

Equipment rental

  • Comparable ROE 16.6% (13.3%)
  • Acquisition of Just Pavillion A/S

modular space assets in Denmark

  • After the period divestment of Danish

Equipment rental operations

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SLIDE 3

FINANCIAL TARGET REALISATION

EQUIPMENT RENTAL 1-6/2017 MODULAR SPACE 1-6/2017 Organic sales growth, %

+3.0

Comparable ROCE, %

14.9 (10.9)

MODULAR SPACE

Double digit organic rental sales growth ROCE, % > 12.5

EQUIPMENT RENTAL

Organic sales growth > Markets *) ROCE, % > 14.5

*) According to ERA (European Rental Association) in the markets where Cramo is present.

Organic rental sales growth, %

+7.0

Comparable ROCE, %

9.8 (12.3)

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SLIDE 4

BUSINESS SEGMENTS

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SLIDE 5

MEUR 4-6/17 4-6/16 Change-% 1-6/17 1-6/16 Change-% 2016 Sales 92.9 97.1

  • 4.3 %

185.1 182.8 1.3 % 378.8 EBITA 16.4 16.0 2.8 % 32.2 26.8 20.2 % 60.9 % of sales 17.7 % 16.5 % 17.4 % 14.6 % 16.1 % Comparable EBITA 16.4 16.0 2.8 % 32.2 26.8 20.2 % 64.5 % of sales 17.7 % 16.5 % 17.4 % 14.6 % 17.0 % ROCE 16.8 % 14.0 % 15.6 % Comparable ROCE 17.8 % 14.0 % 16.6 %

EQUIPMENT RENTAL: SCANDINAVIA

PROFITABILITY IMPROVEMENT CONTINUED

  • In Sweden, sales growth was flat in local currencies, while in Norway and Denmark

sales decreased during the second quarter. The timing of Easter affected negatively on the sales growth against last year.

  • Sales were also materially impacted by weaker local currencies.
  • Profitability and ROCE improvement continued.
  • In Sweden market is very active. The growth is expected to level out.

* in local currencies

ER Scandinavia has operations in three countries with capital employed over MEUR 381 in the end of Q2 2017.

Denmark Norway Sweden

3.4%*

  • 0.8%*
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SLIDE 6

MEUR 4-6/17 4-6/16 Change-% 1-6/17 1-6/16 Change-% 2016 Sales 34.7 34.4 0.8 % 65.3 62.5 4.5 % 138.6 EBITA 5.4 5.1 4.9 % 7.6 4.6 63.0 % 21.7 % of sales 15.6 % 14.9 % 11.6 % 7.4 % 15.6 % Comparable EBITA 5.4 5.1 4.9 % 7.6 4.6 63.0 % 22.3 % of sales 15.6 % 14.9 % 11.6 % 7.4 % 16.1 % ROCE 12.4 % 9.0 % 10.8 % Comparable ROCE 13.5 % 9.0 % 12.0 %

  • In Finland, the sales development was moderate due to tightening competition and

timing of project deliveries. Second quarter sales were also negatively affected by the timing of Easter against last year.

  • In Estonia the demand and performance improved strongly, in Lithuania demand is

at a good level while in Latvia and Poland, the market situation is improving.

  • Profitability improved mainly as a result of increased sales and gross margin

EQUIPMENT RENTAL: FINLAND AND EASTERN EUROPE

STRONG PROFITABILITY IMPROVEMENT IN THE FIRST HALF OF THE YEAR

* in local currencies

ER Finland and Eastern Europe has operations in seven countries with capital employed

  • ver MEUR 180 in the end of

Q2 2017.

Poland Finland Lithuania Latvia Estonia

4.1%*

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SLIDE 7

MEUR 4-6/17 4-6/16 Change-% 1-6/17 1-6/16 Change-% 2016 Sales 23.5 20.1 16.7 % 38.0 33.9 12.1 % 77.9 EBITA 2.4 1.8 31.5 %

  • 0.2
  • 1.6

3.8 % of sales 10.1 % 8.9 %

  • 0.5 % -4.7 %

4.9 % Comparable EBITA 2.4 1.8 31.5 %

  • 0.2
  • 1.6

3.8 % of sales 10.1 % 8.9 %

  • 0.5 % -4.7 %

4.9 % ROCE 5.6 % -0.2 % 4.0 % Comparable ROCE 5.6 % 0.7 % 4.0 %

EQUIPMENT RENTAL: CENTRAL EUROPE

SALES GREW AND PROFITABILITY IMPROVED

ER Central Europe has

  • perations in five countries with

capital employed close to MEUR 91 in the end of Q2 2017.

Germany

Czech Republic Hungary Slovakia Austria

  • In Germany sales growth was 8.6%, contributed strongly by trading sales.
  • Sales and profitability clearly improved in Austria, Czech Republic and Slovakia.
  • The timing of Easter had a negative effect on sales development against last year

during the second quarter.

  • ROCE improved materially year on year.

* in local currencies

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SLIDE 8

MEUR 4-6/17 4-6/16 Change-% 1-6/17 1-6/16 Change-% 2016 Rental Sales 20.3 19.1 6.1 % 40.3 37.5 7.4 % 76.4 Sales 27.1 27.7

  • 1.9 %

52.8 55.7

  • 5.2 %

117.6 EBITA 6.7 7.1

  • 6.1 %

12.9 15.0

  • 14.1 %

30.8 % of sales 24.5 % 25.6 % 24.5 % 27.0 % 26.2 % Comparable EBITA 6.7 7.1

  • 6.1 %

12.9 15.0

  • 14.1 %

30.8 % of sales 24.5 % 25.6 % 24.5 % 27.0 % 26.2 % ROCE 9.8 % 12.3 % 11.1 % Comparable ROCE 9.8 % 12.3 % 11.1 %

  • Total sales were negatively affected by a lower amount of rental related sales

compared to the previous year.

  • Rental sales growth was below our expectations especially in Finland
  • In the first half, the profitability was negatively affected by cost overruns in Finland.

Actions taken to improve operative processes continued. In addition, on a segment-level, measures taken to support further growth negatively contributed to profitability against last year.

MODULAR SPACE

RENTAL SALES GROWTH CONTINUED, BUT STILL BELOW TARGET LEVEL

* in local currencies

Modular space has operations in eight countries with capital employed over MEUR 316 in the end of Q2 2017.

Sweden Finland Lithuania Latvia Estonia Norway Germany Denmark

8.5%* 9.0%*

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SLIDE 9

Acquisition of Just Pavillion’s assets

  • Scope of deal: modular space rental fleet, customer

contracts and other assets

  • During 2016, sales EUR 3.6 million. No material impact to

Group sales or earnings in 2017.

  • High quality product range: 360 units mainly used in the

school and office segments.

  • Supports strategy and financial target realisation

Divestment of Equipment rental Denmark

  • Cramo divests Danish Equipment rental operations to

Loxam A/S.

  • In 2016, sales of Danish Equipment rental operations

amounted to EUR 20 million and comparable EBITA was EUR 0.6 million.

  • Cramo has 80 employees and seven depots in Denmark

within Equipment rental.

Denmark Norway Sweden Sweden Finland Lithuania Latvia Estonia Norway Germany Denmark

Equipment rental: Scandinavia Modular space

SHAPING DANISH OPERATIONS

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SLIDE 10

GROUP PERFORMANCE Q2 2017

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SLIDE 11

147 161 172 187 155 179 185 193 163 178

  • 2%

0% 2% 4% 6% 8% 10% 12% 14% 20 40 60 80 100 120 140 160 180 200 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17

Sales growth (%, y-o-y) Sales (EUR million)

659 660 661 668 676 694 707 712 720 719 0% 1% 2% 3% 4% 5% 6% 7% 8% 620 640 660 680 700 720 740 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17

R12M sales growth (%, y-o-y) R12M sales (EUR million)

SALES DEVELOPMENT

* Change in local currencies

Quarters Rolling 12 months

R12M 4-6/17 vs. R12M 4-6/16: +3.5% 4-6/17 vs. 4-6/16:

  • 0.6% (+1.5%*)
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SLIDE 12

COMPARABLE EBITA DEVELOPMENT

* Change in local currencies

Quarters Rolling 12 months

4-6/17 vs. 4-6/16: +4.3% R12M 4-6/17 vs. R12M 4-6/16: +21.5%

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SLIDE 13

107.5 114.1 108.2 55.5 59.3 56.9 52.0 54.8 51.4 34.9 % 34.1 % 31.7 % 34.4 % 33.1 % 31.9 % 35.3 % 35.3 % 31.5 % 50 100 150 200 250 300 350 400 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

2015 2016 2017 2015 2016 2017 2015 2016 2017 Jan-Jun . Q2 . Q1

Direct cost (EUR million) Direct cost ratio Direct cost (right axis) Direct cost ratio (left axis) 129.7 135.5 139.9 64.9 70.4 70.7 64.8 65.1 69.2 42.1 % 40.5 % 41.0 % 40.2 % 39.3 % 39.7 % 44.1 % 41.9 % 42.5 % 50 100 150 200 250 300 350 400 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

2015 2016 2017 2015 2016 2017 2015 2016 2017 Jan-Jun . Q2 . Q1

Indirect cost (EUR million) Indirect cost ratio Indirect cost (right axis) Indirect cost ratio (left axis)

DEVELOPMENT IN COST BASE

* Comparison before IACs 1 Direct cost refers to income statement line ”Materials and services” 2 Indirect cost refers to income statement lines ”Employee benefit expenses” and ”Other operating expenses”

QUARTERLY INDIRECT COST 2 QUARTERLY DIRECT COST 1

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SLIDE 14

COMPARABLE EBITA BRIDGE Q2 Y-O-Y

14.9% of sales 15.6% of sales 14.9% of sales

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SLIDE 15

COMPARABLE EBITA BRIDGE H1 Y-O-Y

11.8% of sales 13.9% of sales 11.8% of sales

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SLIDE 16

0.09 0.23 0.45 0.39 0.16 0.40 0.64 0.51 0.28 0.42 0.00 0.20 0.40 0.60 0.80 1.00 1.20 1.40 1.60 1.80 2.00 0.00 0.20 0.40 0.60 0.80 1.00 1.20 1.40 1.60 1.80 2.00

Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17

EPS R12M (EUR, line graph) quarterly EPS (EUR, bar graph)

COMPARABLE EPS PERFORMANCE

1.41 1.85 1.15

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SLIDE 17

3.5 44.9 53.0 73.5 23.6 39.3 51.2 58.2 42.3 27.1

  • 30
  • 10

10 30 50 70

  • 30
  • 10

10 30 50 70

Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17

Cash flow after investment (EUR million , line graph) Operating cash flow (EUR million, bar graph)

OPERATING CASH FLOW AND CASH FLOW AFTER INVESTMENTS

  • 5.2

15.5

  • 14.0

Acquisition of Just Pavillon modular space assets in Denmark Acquisition of Parviainen in Finland

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SLIDE 18

COMPARABLE ROE AND NET DEBT TO EBITDA

2.32 2.03 1.86 0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17

Net debt / EBITDA

Net debt / EBITDA Target < 3.00 2017-20

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SLIDE 19

CONCLUSION AND OUTLOOK 2017

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SLIDE 20

CONCLUSIONS & OUTLOOK 2017

SHAPE & SHARE

Q2 / 2017

  • Good performance continued in equipment rental
  • Unsatisfactory sales and profitability in modular space

business division especially in Finland. Actions continue to improve operative processes in order to secure better profitability going forward

  • Acquisition in Modular space Denmark and divestment of

equipment rental operations in Denmark supports our strategic direction and financial target realisation

Outlook

  • In Cramo countries, the construction market outlook for 2017

is mainly positive

  • European Rental Association (ERA) expects growth in rental

services in all of Cramo’s markets in 2017

  • Demand both for equipment rental and modular space is

expected to stay a good level