RAMIRENT PLC COMPANY ANNOUNCEMENT 8 MAY 2014 at 9:00
Vantaa, Finland, 2014-05-08 08:00 CEST (GLOBE NEWSWIRE) —
Note! Figures in brackets, unless otherwise indicated, refer to the corresponding period a year earlier.
JANUARY–MARCH 2014 HIGHLIGHTS
– Ramirent net sales EUR 137.5 (152.8) million, down by 10.0%; adjusted for transferred or divested operations, net sales was down by 2.0% at comparable exchange rates
– EBITA excl. non-recurring items1) and adjusted for transferred or divested operations EUR 7.1 (11.4) million or 5.2% (7.8%) of net sales
– Profit for the period EUR 2.6 (11.0) million and EPS EUR 0.02 (0.10)
– Gross capital expenditure EUR 23.4 (32.4) million
– Cash flow after investments EUR −5.1 (19.0) million
– Net debt EUR 212.0 (220.3) million
– Net debt to EBITDA ratio 1.2x (1.0x)
RAMIRENT 2014 OUTLOOK
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) | 1–3/14 | 1–3/13 | Change | 1–12/13 |
| Net sales | 137.5 | 152.8 | −10.0% | 647.3 |
| EBITDA | 31.7 | 48.1 | −34.1% | 195.1 |
| % of net sales | 23.0% | 31.5% | 30.1% | |
| EBITA 2) | 7.1 | 22.6 | −68.5% | 92.1 |
| % of net sales | 5.2% | 14.8% | 14.2% | |
| EBIT | 5.4 | 18.0 | −70.1% | 82.3 |
| % of net sales | 3.9% | 11.8% | 12.7% | |
| EBT | 3.2 | 15.2 | −78.8% | 63.9 |
| % of net sales | 2.3% | 9.9% | 9.9% | |
| Profit for the period | 2.6 | 11.0 | −76.8% | 54,0 |
| Earnings per share (EPS), (basic and diluted), EUR | 0.02 | 0.10 | −76.8% | 0.50 |
| Gross capital expenditure on non-current assets | 23.4 | 32.4 | −27.6% | 125.8 |
| Gross capital expenditure,% of net sales | 17.0% | 21.2% | 19.4% | |
| Cash flow after investments | −5.1 | 19.0 | n/a | 73.4 |
| Invested capital at the end of period | 545.1 | 654.4 | −16.7% | 579.8 |
| Return on invested capital (ROI),% 3) | 13.9% | 18.9% | 16.5% | |
| Return on equity (ROE),% 3) | 13.6% | 20.7% | 14.7% | |
| Net debt | 212.0 | 220.3 | −3.8% | 206.9 |
| Net debt to EBITDA ratio | 1.2x | 1.0x | 1.1x | |
| Gearing,% | 64.2% | 64.5% | 55.8% | |
| Equity ratio,% | 43.8% | 38.2% | 48.9% | |
| Personnel at end of period 4) | 2,529 | 2,725 | −7.2% | 2,561 |
1) The non-recurring items include a non-taxable capital gain of EUR 10.1 million from the formation of Fortrent in the first quarter 2013.
2) EBITA is operating profit before amortisation and impairment of intangible assets.
3) Rolling 12 months
4) 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:
“Demand for equipment rental remained mixed in our core markets during the first quarter of 2014. First-quarter net sales decreased by 2.0% at comparable exchange rates and adjusted for transferred or divested operations. EBITA margin excluding non-recurring items and adjusted for transferred or divested operations was 5.2% (7.8%). The EBITA margin is not at satisfactory level and we will prioritise measures to strengthen profitability. Efficiency improvement measures were intensified in the first quarter.
Markets developed largely in line with our expectations in the first quarter. In Finland and Norway, slower construction activity impacted negatively on operations. In Sweden, net sales decreased mainly due to some larger projects ending in the first quarter. The demand for equipment rental improved in Denmark, Poland and the Baltic States in the first quarter based on increasing construction activity and stable demand from industrial sectors.
We remain focused on improving efficiency and our competitive position. Implementation of specific actions to reach the targeted Group EBITA margin level of 17% by the end of 2016 continued in the first quarter. Integrated solutions provided to all customer sectors and improved operational excellence through the common Ramirent platform are key measures to reach the goal. We are improving pricing management, optimising a customer centre network, improving fleet utilisation rates and the governance of sourcing operations.
In the first quarter we also announced a renewed brand promise: Ramirent is More Than MachinesTM. Our new brand promise clarifies our value proposition of delivering sustainable solutions that offer efficiency improvement possibilities to our customers through the competence and experience of our people combined with high quality equipment and the right services. We continue to work on improving our customer understanding and maintain high focus on developing our capabilities in the areas of safety and eco-efficiency solutions.
In the first quarter we acquired a telehandler business in Finland whereby we complemented our product range and also extended our service offering by signing a cooperation agreement to provide telehandler operator services. Based on our strong balance sheet, we continue pursuing outsourcing opportunities and selected small− to mid−sized acquisitions as well as evaluating entry to new customer sectors and geographies in 2014.”
MARKET OUTLOOK 2014
According to a forecast published by Confederation of Finnish Construction Industries (RT) in April 2014, the Finnish construction market is expected to decrease by 1.0% in 2014. Residential construction is estimated to decline during this year as new residential start–ups will remain below the long-term average. Activity in non–residential construction is expected to pick up slightly supported by some major construction projects. Construction of public sector buildings and renovation is forecasted to increase moderately in 2014. Confederation of Finnish Industries (EK) expects industrial investments to increase slightly this year, supported by higher investment activity in the energy sector.
According to a forecast published by the Swedish Construction Federation (BI) in March 2014, the Swedish construction market forecast was raised and the market is expected to grow by 5.0% in 2014. Residential construction and infrastructure construction are estimated to be the main growth drivers. Non–residential construction is expected to remain at the previous year’s level. Due to a continuously expanding and ageing building stock, renovation will continue to grow also in 2014. Market activity in several industrial sectors is expected to develop positively.
According to a forecast published by Prognosesenteret in March 2014, the Norwegian construction market forecast was lowered and the market is now expected to grow by 0.2% in 2014. Prognosesenteret expects residential start−ups to decline clearly in 2014. Market activity in renovation is expected to remain stable in all construction sectors. The Norwegian government’s plan to improve transport infrastructure will support infrastructure construction. According to the Norwegian Oil and Gas association, investments in the oil and gas sector are forecasted to remain close to last year’s level during 2014. Decelerating market activity in the construction sector will impact negatively on the rental market in the first half of the year.
According to a forecast published by the Danish Construction Industry (DB) in February 2014, the Danish construction market is expected to grow by 3.2% in 2014. Volumes in the residential construction are estimated to pick up, however from low levels. Market activity in non-residential construction is expected to improve slightly, mainly due to increasing new construction activity in the public building sector and a gradual upturn in general economic situation. Renovation is expected to increase supported by demand from the public sector where repair needs remain high. Infrastructure construction is forecasted to grow fuelled by several new transport infrastructure projects and energy investments.
According to a forecast published by Euroconstruct in December 2013, 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 and to decrease in Latvia and in Estonia. Residential construction is estimated to grow supported by new building start–ups and improving consumer confidence. Market activity in non–residential construction is expected to improve slightly in 2014. The market in infrastructure construction will weaken markedly due to a transition period in EU funding. Demand for equipment rental in the construction sector is anticipated to remain at a healthy level. Strong activity in the energy sector will support the Baltic equipment rental markets in 2014.
Significant risks include the expansion of the Ukrainian crisis and severe economic sanctions implemented by the EU. These measures would have stronger effects on the near-term economic outlook for Russia and Ukraine. Euroconstruct forecasts that the Russian construction market will grow by approximately 2% in 2014, with a long-term positive market outlook. Equipment rental is expected to grow more than construction. The forecasts do not account for the effects of the Ukrainian crisis. The market situation is likely to remain challenging in Ukraine.
Construction activity is expected to pick up in Poland especially within residential and infrastructure construction. The market situation in renovation is also expected to improve. The Polish construction market is estimated to grow by 3.5% according to a forecast published by Euroconstruct in December 2013. New power plant projects in the energy sector will support the demand in 2014. In the Czech Republic, all construction sectors are expected to decline in 2014. The Slovakian construction market is supported by an improving outlook for infrastructure construction.
ANALYST AND PRESS BRIEFING
A briefing for investment analysts and the press will be arranged on Thursday 8 May 2014 at 10:00 a.m. Finnish time at the Event Arena Bank, Wall Street Cabinet 22, Unioninkatu 22, Helsinki.
WEBCAST AND CONFERENCE CALL
You can participate in the analyst briefing on Thursday 8 May 2014 at 10:00 a.m. Finnish time (EET) through a live webcast at www.ramirent.com and conference call. Dial−in numbers are: +358 9 8171 0462 (FI), +46 8 5199 9354 (SE), +44 2 0766 02077 (UK) and +1 855 269 2605 (US). Recording of the webcast will be available at www.ramirent.com later the same day.
FINANCIAL CALENDAR 2014
Ramirent observes a silent period during 21 days prior to the publication of annual and interim
financial results.
Interim report January–June 29 July 2014 at 9:00 a.m.
Interim report January–September 6 November 2014 at 9:00 a.m
The financial information in this stock exchange release has not been audited.
Vantaa, 8 May 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
www.ramirent.com
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 2,520 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.