Ramirent Plc Stock exchange release 1 December 2015 at 9.00 a.m. EEST
Vantaa, Finland, 2015-12-01 08:00 CET (GLOBE NEWSWIRE) —
Ramirent will today hold its Capital Markets Day in Stockholm, Sweden. The event focuses on Ramirent’s strategy, new financial targets and business prospects by segment. There are no changes to the previously communicated market outlook or guidance for 2015.
“Ramirent is turning focus to growth and operational excellence. The development since last Capital Market Day in 2013, has not been as we expected. Mainly this is due to weaker market development in Finland and Norway combined with slower than expected realisation of the efficiency programme. Therefore reaching an EBITA margin of 17% on Group level is not realistic in the near-term. We will however continue our diligent work to implement the common platform, with a shared business logic, a harmonised operating model and a common ERP system. At the same time we are developing our business portfolio aiming to drive profitable growth through three distinct business areas: General Rental, Solutions and Temporary Space. The three business areas have different financial characteristics, and Ramirent can grow in all areas, but the EBITA margin will depend on the exact growth mix between these businesses. To drive growth and profitability, we have updated our long-term financial targets and strategic focus themes. In the past years we have harmonised our operational model “One Ramirent”, we are ready for the next phase of our strategy, to realise the synergies of the common platform with a strengthened focus on growth and developing our group business mix. The equipment rental market continues to offer multiple ways for Ramirent to grow,” says President and CEO Magnus Rosén.
Targeting profitable growth by developing the business mix
“General Rental continues to be the “centre of gravity” of Ramirent. In General Rental we are aiming for profitable growth through excellent customer service and efficiency by developing our sales channels, revenue management practices and securing cost leadership through synergies of the common platform,” Rosén says.
“In Solutions, Ramirent is targeting further growth especially in large industrial construction projects. With our understanding of the customer’s production process, we aim to deliver value to the customer throughout the whole project life-cycle, from the early phase where we plan the entire project site to the very end of the project. Customers are increasingly interested in safety, energy and cost efficiency of their projects. Our solutions offering helps customers to move life cycle responsibility from several suppliers to one organisation in order to reduce costs, lead times as well as improve safety and efficiency. Our aim is to be a leading European provider of advanced and sustainable total solutions that simplify business both in construction and other industries,” Rosén continues.
Seeking growth in Temporary Space Business
Ramirent is generally associated with rental of machinery and equipment for the construction sector and general industry, but it maintains also strong customer relationships in the Temporary Space business. Today, Ramirent generates approx. EUR 30 million in annual sales from Temporary Space rental in Sweden, Denmark, and Norway where it is the market leader. Ramirent’s Temporary Space customers are found especially in the public sector, in the industry sector and in the oil and gas sector. Ramirent aims to double its Temporary Space net sales by growing further in the industry sector with its high-end accommodation and office modules solutions, and in the public sector with its module systems adapted for different operations including pre-schools, schools as well as health care centres. Ramirent’s Temporary Space modules are also well-positioned to respond to the increasing needs for eco-efficient solutions,” says Rosén.
Optimising the fleet management and supply chain and realising the synergies of the common platform
Ramirent sees further opportunities to support profitable growth by optimising the flow, efficiency and service level in its fleet management and supply chain. Ramirent has in the past years invested into developing its harmonised operating model One Ramirent and now aims to leverage the synergies of One Ramirent to outperform the competition in competence and cost-efficiency.
New financial targets supporting strategy execution
Ramirent’s updated long-term financial targets are: Annual net sales growth above GDP + 2%-points, ROE of 12% per fiscal year, Net debt to EBITDA below 2.5x at the end of each fiscal year. There is no change to the dividend policy: the company’s aim is to distribute at least 40% of net profit as dividend to the company’s shareholders.
Ramirent’s previous long-term financial targets were: ROE of 18% over a business cycle, Net debt to EBITDA below 1.6x at the end of each fiscal year and a dividend payout ratio of at least 40% of net profit.
Ramirent’s updated financial targets support profitable growth. Ramirent has multiple ways to grow by developing the business mix in its portfolio between growth in General Rental, Solutions, Temporary Space and accelerating growth with selected outsourcing transactions and acquisitions. Further optimising the fleet management and supply chain and realising the synergies of the common platform supports improved profitability and the achievement of the ROE target. “Our new Return on Equity target is more in line with the industry level. It has been adjusted to ensure our competitiveness to pursue profitable growth in all business areas, whilst keeping a balanced risk-level. With this target, we are in the position to execute our strategy to grow in excess of market growth, without increasing risk in operations. At the same time we can further support value creation by allowing the financial leverage to a level that is current in our industry. This way we can both invest in growth and maintain our dividend payout policy,” says Rosén.
For 2015, Ramirent reiterates its financial outlook for 2015. Ramirent expects the market picture to remain mixed, with challenging market conditions in Finland and Norway. We expect full-year 2015 net sales and EBITA margin to be similar to the level of 2014 when measured in local currencies.
Overview of the Capital Market Day programme today
During the Capital Markets Day, President and CEO Magnus Rosén will talk more about Ramirent’s strategic focus themes, business mix development and growth. Mikael Salenstedt, Head of Group Temporary Space, explains how Ramirent aims to build its Temporary Space Business. Dino Leistenschneider, Executive Vice President, Fleet management and Sourcing, will explain how Ramirent is improving efficiency by optimising its fleet management and supply chain. As Interim Managing Director of segments Sweden and Denmark, Magnus Rosén, describes how Ramirent is driving profitable growth in the strong Swedish market and Øyvind Emblem, Executive Vice President, segment Norway explains how Ramirent aims to improve profitability under challenging market conditions. Anna Hyvönen, Executive Vice President, North Central Europe describes how Ramirent aims to strengthen further its leading positions and drive synergies throughout the North Central Europe market area. And finally, Jonas Söderkvist, Chief Financial Officer and EVP Corporate functions, will explain the new financial targets and how Ramirent aims to reach them.
After the management presentations the Capital Markets Day guests will visit the project Urban Escape, which is an example of a new type of Total Solution offering coordination to drive down costs and improve lead times. At the Urban Escape construction site, Ramirent is the single supplier of equipment rental coordinating on-site services including running on-site a customer centre, providing safety planning, site arrangement planning, logistics and waste management planning. The project started in 2014 and is expected to continue until 2018.
The Capital Markets Day will start with registration at 9:00 a.m. CEST (10:00 a.m. Finnish time, EEST) at Operakällaren, Karl XII:S torg, 111 86 Stockholm, Sweden. All presentations are available in English at . It is also possible to follow the presentations through a live webcast at approximately 9:30 a.m.-2:45 p.m. CEST.
FURTHER INFORMATION:
Franciska Janzon, SVP, Marketing, Communications and IR, tel. +358 20 750 2859
Ramirent is a leading rental equipment group combining the best equipment, services and know-how into rental solutions that simplify customer’s business. Ramirent serves a broad range of customer sectors including construction, industry, services, the public sector and households. Ramirent focuses on the Baltic Rim with operations in the Nordic countries and in Central and Eastern Europe. In 2014, Ramirent Group sales totalled EUR 614 million. The Group has 2,658 employees in 295 customer centres in 10 countries. Ramirent is listed on the NASDAQ Helsinki (RMR1V). Ramirent – More Than MachinesTM.
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