RAMIRENT PLC COMPANY ANNOUNCEMENT 6 NOVEMBER 2014 at 9:00
Vantaa, Finland, 2014-11-06 08:00 CET (GLOBE NEWSWIRE) —
Note! Figures in brackets, unless otherwise indicated, refer to the corresponding period a year earlier.
JULY–SEPTEMBER 2014 HIGHLIGHTS
– Ramirent net sales EUR 163.6 (166.2) million, down by 1.6%; adjusted for divested operations, net sales were up by 1.9% at comparable exchange rates
– EBITA1) EUR 28.0 (25.9) million or 17.1% (15.6%) of net sales
– EBITA excl. non-recurring items and divested operations2,3) EUR 29.9 (28.7) or 18.3% (17.5%)
– Profit for the period EUR 18.4 (16.8) million and EPS EUR 0.17 (0.16)
JANUARY-SEPTEMBER 2014 HIGHLIGHTS
– Ramirent net sales EUR 452.9 (479.8) million, down by 5.6%; adjusted for transferred or divested operations, net sales were down by 0.3% at comparable exchange rates
– EBITA1) EUR 51.3 (71.2) million or 11.3% (14.8%) of net sales
– EBITA excl. non-recurring items and adjusted for transferred or divested operations2,3) EUR 53.2 (62.7) million or 11.7% (13.3%) of net sales
– Profit for the period EUR 28.1 (40.1) million and EPS EUR 0.26 (0.37)
– Gross capital expenditure EUR 125.6 (91.9) million
– Cash flow after investments EUR −10.7 (48.2) million
– Net debt EUR 259.7 (230.3) million
– Net debt to EBITDA ratio 1.5x (1.1x)
RAMIRENT OUTLOOK FOR 2014 UNCHANGED
The economic growth in 2014 is expected to be modest and construction market demand remains mixed in our core markets. Ramirent will maintain strict cost control and, for 2014, capital expenditure is expected to be around the same level as in 2013. The strong financial position will enable the Group to continue to address profitable growth opportunities.
KEY FIGURES
| KEY FIGURES (MEUR) | 7–9/14 | 7–9/13 | Change | 1–9/14 | 1–9/13 | Change | 1–12/13 |
| Net sales | 163.6 | 166.2 | −1.6% | 452.9 | 479.8 | −5.6% | 647.3 |
| EBITDA | 53.9 | 52.0 | 3.8% | 127.8 | 148.8 | −14.1% | 195.1 |
| % of net sales | 33.0% | 31.3% | 28.2% | 31.0% | 30.1% | ||
| EBITA 1) | 28.0 | 25.9 | 8.0% | 51.3 | 71.2 | −27.9% | 92.1 |
| % of net sales | 17.1% | 15.6% | 11.3% | 14.8% | 14.2% | ||
| EBIT | 26.0 | 24.3 | 7.0% | 45.6 | 63.3 | −27.9% | 82.3 |
| % of net sales | 15.9% | 14.6% | 10.1% | 13.2% | 12.7% | ||
| EBT | 23.7 | 20.6 | 15.0% | 36.0 | 51.0 | −29.4% | 63.9 |
| % of net sales | 14.5% | 12.4% | 8.0% | 10.6% | 9.9% | ||
| Profit for the period attributable to the owners of the parent company | 18.4 | 16.8 | 9.6% | 28.1 | 40.1 | −29.9% | 54.0 |
| Earnings per share (EPS), (basic and diluted), EUR | 0.17 | 0.16 | 9.6% | 0.26 | 0.37 | −29.9% | 0.50 |
| Gross capital expenditure on non-current assets | 23.8 | 29.5 | −19.4% | 125.6 | 91.9 | 36.6% | 125.8 |
| Gross capital expenditure, % of net sales | 14.6% | 17.8% | 27.7% | 19.2% | 19.4% | ||
| Cash flow after investments | 13.7 | 34.4 | −60.2% | −10.7 | 48.2 | −122.3% | 73.4 |
| Invested capital at the end of period | 605.2 | 604.1 | 0.2% | 579.8 | |||
| Return on invested capital (ROI),% 4) | 12.3% | 17.5% | 16.5% | ||||
| Return on equity (ROE),% 4) | 12.0% | 16.9% | 14.7% | ||||
| Net debt | 259.7 | 230.3 | 12.7% | 206.9 | |||
| Net debt to EBITDA ratio 4) | 1.5x | 1.1x | 32.9% | 1.1x | |||
| Gearing,% | 75.9% | 63.9% | 55.8% | ||||
| Equity ratio,% | 42.8% | 45.2% | 48.9% | ||||
| Personnel at end of period 5) | 2,621 | 2 597 | 0.9% | 2 589 |
1) EBITA is operating profit before amortisation and impairment of intangible assets.
2) Non-recurring items included a EUR 1.9 million restructuring provision booked in the third quarter of 2014.
3) Non-recurring items in the comparison period included a non-taxable capital gain of EUR 10.1 million from the formation of Fortrent in the first quarter 2013, a EUR 1.9 million loss from disposal of Hungary as well as a EUR 1.5 million restructuring provision in Denmark in the third quarter of 2013. Transferred and divested operations included Russia, Ukraine and Hungary.
4) Rolling 12 months
5) As of first quarter 2014, reporting of number of personnel was changed to FTE (full-time equivalent) which indicates the number of employees calculated as full time workload for each person employed and actually present in the company. Comparative information has been changed accordingly.
MAGNUS ROSÉN, RAMIRENT CEO:
“After several quarters of decline in sales, we saw a small increase of 1.9% in our third-quarter net sales at comparable exchange rates and adjusted for divested operations. We intensified cost control in all our markets during the quarter and I am pleased to report an increase in our third-quarter EBITA margin from 15.6% last year to 17.1%.
The market picture remained mixed, with no major market changes during the third quarter. In Sweden, increased demand supported net sales as several projects started. In Finland, net sales were supported by recent acquisitions although overall construction activity remains subdued and we see further risk on the down-side. In Norway, modest demand for equipment rental continues from residential construction. In Denmark, demand was supported by construction in the capital city region and demand from the public sector. In the Baltics, our operations developed favourably backed by stable market conditions. In Europe Central, demand for equipment rental improved in Poland and the Czech Republic, while market activity is low in Slovakia.
In the third quarter, we carried out a number of actions to adjust the cost base in low-performing segments, especially in the Swedish and Norwegian operations. In Norway, a EUR 1.9 million restructuring provision was booked in the third quarter. In Denmark, activities to streamline operations and realise synergies cross-border with Sweden continued and in Finland flexibility was added by outsourcing non-core yard and storage operations. Cost reductions will continue also in the fourth quarter and we expect the full effects of these cost saving actions to materialise in 2015.
An important new agreement during the quarter was the signing of a three-year rental agreement with Skanska’s machinery department in Sweden. After the end of the quarter, we renewed the cooperation agreement with Veidekke in Norway for the next three years. In Finland, construction company Hartela outsourced their tower cranes fleet to Ramirent and signed a five-year rental agreement.
We continue to work to improve the performance and future-readiness of our business. Our efficiency programme is progressing according to plan. In the quarter, we continued to develop our organisation to efficiently cater for the specific needs of customers renting over-the-counter and customers to whom we deliver integrated solutions to. This helps us in serving our customers even better and it further differentiates us from our competitors. Other key measures comprise the development of the common Ramirent platform, allowing us to realise synergies of scale and to better manage pricing and fleet utilisation rates.
Based on our continued solid financial position, we are well positioned to continue pursuing outsourcing opportunities and acquisitions.”
MARKET OUTLOOK FOR 2014
According to a forecast published by Confederation of Finnish Construction Industries (RT) in October 2014, the Finnish construction market is expected to decrease by 2.0% in 2014. New residential start-ups will decline considerably compared to the previous year. Demand for non-residential construction is expected to remain stable supported by healthy activity in public sector building projects. Renovation is forecasted to increase as a result of government stimulus measures and increasing need of renovations. The Confederation of Finnish Industries (EK) expects industrial investments to increase slightly in 2014, supported by investments in the energy sector. According to a forecast published by European Rental Association (ERA) in October 2014, the Finnish equipment rental market is expected to decrease by 1.6% in 2014.
According to a forecast published by Swedish Construction Federation (BI) in October 2014, the Swedish construction market is expected to increase by 11.0% in 2014. Forecasts predict residential construction to increase significantly compared to the previous year. Non-residential construction is expected to grow markedly in 2014. Construction activity within infrastructure construction is forecasted to grow slightly and mainly in the Stockholm and Gothenburg areas. Due to a continuously expanding and ageing building stock, renovation is expected to grow also in 2014. According to a forecast published by ERA in October 2014, the Swedish equipment rental market is expected to grow by 1.0% in 2014.
According to a forecast published by Prognosesenteret in October 2014, the Norwegian construction market is expected to grow by 1.0% in 2014. In 2014, new residential construction is forecasted to decline while infrastructure construction is to remain active supported by government grants to railway and metro projects. Market activity in renovation is expected to remain stable in all construction sectors. According to the Norwegian Oil and Gas association, investments in the oil and gas sector are forecasted to be close to last year’s level in 2014. Slow market activity in the residential construction sector as well as overcapacity in the equipment rental market is expected to impact negatively on the rental market in the fourth quarter. According to a forecast published by ERA in October 2014, the Norwegian equipment rental market is expected to grow by 2.0% in 2014.
According to a forecast published by Danish Construction Industry (DB) in October 2014, the Danish construction market is expected to grow by 2.5% in 2014. Volumes in residential construction are estimated to pick up, however from low levels. Market activity in non-residential construction is expected to improve mainly due to increasing construction of buildings for education and health as well as a gradual upturn in the general economic situation. Renovation is expected to increase supported by healthy demand from all construction sectors. Infrastructure construction is forecasted to grow fuelled by several new transport projects and energy investments. According to a forecast published by ERA in October 2014, the Danish equipment rental market is expected to grow by 0.7% in 2014.
According to a forecast published by Euroconstruct in June 2014, the construction market in the Baltic States is expected to be slightly below last year’s level. The construction market is estimated to increase in Lithuania by 3% and to decrease in Latvia by 2% and in Estonia by 7%. Residential construction in the Baltic States is estimated to grow supported by new building start-ups and improving consumer confidence. Non-residential construction is expected to recover in Latvia and Lithuania during 2014. The market in infrastructure construction is at a lower level due to a transition period in EU funding. High activity in the energy sector will support the Baltic equipment rental markets in 2014.
A significant near-term risk is the prolongation and expansion of the Ukrainian crisis. According to a forecast published by Euroconstruct in June 2014, the Russian construction market is projected to decrease at some 1% in 2014. In Russia, residential construction is estimated to remain close to last year’s level and non-residential construction is forecasted to decline. The market situation remains challenging in Ukraine.
In 2014, the Polish construction market is estimated to grow by 4.2% according to a forecast published by Euroconstruct in June 2014. Construction activity is expected to pick-up in Poland especially within residential and infrastructure construction. However, several large projects are being completed and there is a lack of new large projects starting in the short-term. The market situation in renovation is estimated to remain stable. New power plant and shale gas projects in the energy sector support demand in 2014. According to a forecast published by ERA in October 2014, the Polish equipment rental market is expected to grow by 1.5% in 2014. In the Czech Republic, the construction market is expected to decrease by 3.8% this year. In Slovakia the construction volume is estimated to increase by 1.7% supported by residential and infrastructure construction.
ANALYST AND PRESS BRIEFING
A briefing for investment analysts and the press will be arranged on Thursday 6 November 2014 at 11:00 a.m. Finnish time at the Ramirent Group head office located at Äyritie 16, Vantaa, Finland.
WEBCAST AND CONFERENCE CALL
You can participate in the analyst briefing on Thursday 6 November 2014 at 11:00 a.m. Finnish time (EET) through a live webcast at www.ramirent.com and conference call. Dial−in numbers are: +358 9 81710 465 (FI), +46 8 5199 9355 (SE), +44 2 0319 4 0550 (UK) and +1 8 5526 92605 (US). Recording of the webcast will be available at www.ramirent.com later the same day.
FINANCIAL CALENDAR 2015
Ramirent observes a silent period during 21 days prior to the publication of annual and interim financial results.
Financial statements 2014 12 February 2015 at 9:00 a.m
Annual report 2014 27 February 2015
Annual General Meeting 25 March 2015
Interim report January–March 2015 7 May 2015 at 9:00 a.m
Interim report January–June 2015 6 August 2015 at 9:00 a.m
Interim report January–September 2015 4 November 2015 at 9:00 a.m
The financial information in this stock exchange release has not been audited.
Vantaa, 6 November 2014
RAMIRENT PLC
Board of Directors
FURTHER INFORMATION
CEO Magnus Rosén
tel. +358 20750 2845, magnus.rosen@ramirent.com
CFO and EVP, Corporate Functions Jonas Söderkvist
tel. +358 20 750 3248, jonas.soderkvist@ramirent.com
SVP, Marketing, Communications and IR Franciska Janzon
tel. +358 20 750 2859, franciska.janzon@ramirent.com
DISTRIBUTION
NASDAQ OMX Helsinki
Main news media
Ramirent is More Than MachinesTM. We are a leading rental equipment group combining the best equipment, services and know-how into rental solutions that simplify customer business. We serve a broad range of customers, including construction and process industries, services, the public sector and households. In 2013, the Group’s net sales totalled EUR 647 million. The Group has 2,620 employees at 302 customer centres in 10 countries in the Nordic countries and in Central and Eastern Europe. Ramirent is listed on the NASDAQ OMX Helsinki Ltd.