RAMIRENT PLC COMPANY ANNOUNCEMENT 12 FEBRUARY 2015 at 9:00
Vantaa, Finland, 2015-02-12 08:00 CET (GLOBE NEWSWIRE) —
Note! Figures in brackets, unless otherwise indicated, refer to the corresponding period a year earlier.
JANUARY–DECEMBER 2014 HIGHLIGHTS
– Net sales EUR 613.5 (647.3) million, down by 5.2%; adjusted for transferred or divested operations, net sales were down by 0.6% at comparable exchange rates
– EBITA EUR 65.8 (92.1) million or 10.7% (14.2%) of net sales
– EBITA excluding non-recurring items1) and adjusted for transferred or divested operations EUR 71.5 (83.6) million or 11.7% (13.1%) of net sales
– The non-recurring items1) include restructuring costs and asset write-downs of EUR −5.7 (8.5) million
– Profit for the period EUR 32.6 (54.0) million and EPS EUR 0.30 (0.50)
– Gross capital expenditure EUR 144.6 (125.8) million
– Cash flow after investments EUR 21.8 (73.4) million
– Net debt EUR 227.1 (206.9) million
– Net debt to EBITDA ratio 1.4x (1.1x)
OCTOBER–DECEMBER 2014 HIGHLIGHTS
– Net sales EUR 160.7 (167.5) million, down by 4.1% or by 1.6% at comparable exchange rates
– EBITA EUR 14.5 (20.9) million or 9.0% (12.5%) of net sales
– EBITA excluding non-recurring items EUR 18.2 (20.9) or 11.4% (12.5%) of net sales
– The non-recurring items 1) include restructuring costs and asset write-downs of EUR −3.7 (0.0) million
– Profit for the period EUR 4.5 (13.9) million and EPS EUR 0.04 (0.13)
– Cash flow after investments EUR 32.6 (25.2) million
1) Non-recurring items include restructuring costs of EUR 1.9 million in the third quarter 2014 and EUR 3.7 million of restructuring costs and asset write-downs in the fourth quarter 2014. 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 EUR 1.5 million restructuring costs in Denmark in the third quarter of 2013.
RAMIRENT OUTLOOK FOR 2015
Ramirent expects the market picture for 2015 to remain mixed, with challenging market conditions in especially 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.
| KEY FIGURES | 10–12/14 | 10–12/13 | Change | 1–12/14 | 1–12/13 | Change |
| (MEUR) | ||||||
| Net sales | 160.7 | 167.5 | −4.1% | 613.5 | 647.3 | −5.2% |
| EBITDA | 40.0 | 46.2 | −13.4% | 167.9 | 195.1 | −13.9% |
| % of net sales | 24.9% | 27.6% | 27.4% | 30.1% | ||
| EBITA excluding non-recurring items | 18.2 | 20.9 | −12.6% | 71.5 | 83.6 | −14.5% |
| % of net sales | 11.4% | 12.5% | 11.7% | 13.1% | ||
| EBITA 1) | 14.5 | 20.9 | −30.5% | 65.8 | 92.1 | −28.5% |
| % of net sales | 9.0% | 12.5% | 10.7% | 14.2% | ||
| EBIT | 12.5 | 19.0 | −34.0% | 58.1 | 82.3 | −29.3% |
| % of net sales | 7.8% | 11.3% | 9.5% | 12.7% | ||
| EBT | 6.4 | 12.8 | −50.0% | 42.5 | 63.9 | −33.5% |
| % of net sales | 4.0% | 7.7% | 6.9% | 9.9% | ||
| Profit for the period attributable to the owners of the parent company | 4.5 | 13.9 | −67.7% | 32.6 | 54.0 | −39.6% |
| Earnings per share (EPS), (basic and diluted), EUR | 0.04 | 0.13 | −67.7% | 0.30 | 0.50 | −39.6% |
| Gross capital expenditure on non-current assets | 19.0 | 33.8 | −44.0% | 144.6 | 125.8 | 14.9% |
| Gross capital expenditure, % of net sales | 11.8% | 20.2% | 23.6% | 19.4% | ||
| Cash flow after investments | 32.6 | 25.2 | 29.2% | 21.8 | 73.4 | −70.2% |
| Invested capital at the end of period | 555.2 | 579.8 | −4.2% | |||
| Return on invested capital (ROI),% 2) | 12.2% | 16.5% | ||||
| Return on equity (ROE),% 2) | 9.4% | 14.7% | ||||
| Net debt | 227.1 | 206.9 | 9.7% | |||
| Net debt to EBITDA ratio | 1.4x | 1.1x | 27.5% | |||
| Gearing,% | 69.9% | 55.8% | ||||
| Equity ratio,% | 43.7% | 48.9% | ||||
| Personnel at end of period 3) | 2,576 | 2,589 | −0.5% |
1) EBITA is operating profit before amortisation and impairment of intangible assets.
2) Rolling 12 months
3) 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:
“Our fourth-quarter net sales declined by 1.6% at comparable exchange rates compared to the previous year. Increased geopolitical uncertainty and slow economic growth in our main markets, combined with the rapid decline in oil price, impacted negatively on net sales. Fourth-quarter EBITA decreased to EUR 14.5 million including EUR 3.7 million of restructuring costs and asset write-downs. In the fourth quarter, cost reduction measures continued and we held back on investments in the rental fleet and delivered a strong free cash flow of EUR 32.6 (25.2) million.
For the full year 2014, net sales decreased by 5.2% to 613.5 million and EBITA decreased to EUR 65.8 (92.1) million or 10.7% (14.2%) of sales. Cash flow after investments was at EUR 21.8 (73.4) million. We maintained a solid financial position with a Net debt to EBITDA ratio of 1.4x at the end of 2014.
Mixed market situation
In 2014, slow economic growth in our main markets and weaker than expected recovery in the Nordic construction sector impacted negatively on the demand for equipment rental. In the Nordic countries, we saw growth in Sweden, while the demand picture remained weak in Finland reflecting the increased geopolitical uncertainty. The rapid decline in oil prices led to cautiousness in new investments in the Norwegian oil and gas sector and wider economy. In Denmark our performance was burdened by internal restructuring measures. In Europe East, our business grew rapidly in the Baltic countries while high political and macroeconomic uncertainty continued in Fortrent markets in Russia and Ukraine. In Europe Central, market activity increased in Poland and demand started to pick up towards the end of the year in the Czech Republic and Slovakia.
Advancing operational excellence
Implementation of the efficiency program continued throughout the year 2014 underpinning the aim of reaching Group EBITA margin target of 17%. The full financial benefits from the program has not yet realised, partly due to more adverse market conditions, even though we have made further progress in improving our operational performance. In 2014, we developed further our common business platform and logic, enhanced our sourcing operations, reorganised our sales force, and developed our supply chain management.
To clarify Ramirent’s ambition to offer a unique customer experience and to differentiate from competitors, we have launched an improvement agenda called NextRamirent. NextRamirent targets the company to become more competent, proactive, conscious, safe and green, as well as more efficient – in all of its operations. We want to grow as a proactive knowledge company that leads the development of the rental business through the people of Ramirent providing customers productivity gains by delivering More Than Machines™.
Our focus remains on developing a platform for sustainable profitable growth
To accelerate the execution of the group strategy and to realise more synergies between the businesses we renewed our Group management structure in January 2015. In the new structure we organise all operating segments under two main market areas, Scandinavia and North Central Europe.
We are committed to achieving sustainable profitable growth by pursuing our objective Customer First through the NextRamirent agenda; by maintaining agility in business through a diversified business portfolio of products, customers, competences and geographies and by building One Company to realise scale benefits and synergies. Our efficiency actions will continue in 2015, although we expect the targeted EBITA margin improvement stemming from these actions to materialise mainly in 2016. Based on our continued solid financial position, we will also continue pursuing outsourcing opportunities and acquisitions.
We expect the market picture in 2015 to remain mixed, with challenging market conditions in especially 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.”
MARKET OUTLOOK 2014
According to a forecast from European Rental Association (ERA) in November 2014, the Finnish equipment rental market is estimated to increase by 2.1% in 2015. However, Ramirent expects market conditions to be challenging in Finland in 2015. According to a forecast published by Euroconstruct in November 2014, the Finnish construction market is expected to grow by 1.5% in 2015. Demand for renovation is estimated to increase due to ageing residential stock and government assistance for renovation projects. Weak market conditions are expected to continue in the new residential construction sector. Demand for equipment rental in the non-residential construction is expected to recover supported by start-ups of certain large commercial and industrial building projects. The Confederation of Finnish Industries (EK) expects industrial investments to increase in the general manufacturing sector as well as in the energy sector in 2015.
According to a forecast published by ERA in November 2014, the Swedish equipment rental market is expected to grow by 1.8% in 2015. The demand for equipment rental is expected to improve in Sweden supported by increasing activity in all construction sectors. According to a forecast published by Euroconstruct in November 2014, the Swedish construction market is expected to grow by 1.3% in 2015. New residential start-ups will remain at a high level due to strong household’s economy and continuous housing shortage especially in larger cities. Non-residential construction is expected to increase supported by growth in office and commercial building. The government’s transport infrastructure plan, approved in 2014, will fuel activity within infrastructure construction especially in the Stockholm and Gothenburg areas. Due to a continuously expanding and ageing building stock, renovation is expected to grow in 2015. Demand for equipment rental in the industrial sector is anticipated to remain fairly stable in Sweden.
According to a forecast published by ERA in November 2014, the Norwegian equipment rental market is expected to grow by 1.1% in 2015. However, Ramirent expects market conditions to be challenging in Norway in 2015 due to increased macroeconomic uncertainty combined with rapid decline in oil prices. According to a forecast published by Euroconstruct in November 2014, the Norwegian construction market is expected to grow by 3.9% in 2015. Infrastructure construction will be the main growth driver fuelled by several road, railway and metro projects. The market situation in the residential sector has stabilised and construction is estimated to remain at the previous year’s level in 2015. New construction and renovation in the non-residential construction sector is expected to increase supported mainly by public sector projects. According to the Norwegian Oil and Gas association, investments in the oil and gas sector are estimated to decline by 11% in 2015.
The Danish equipment rental market is expected to continue its recovery in 2015. According to a forecast published by ERA in November 2014, the Danish equipment rental market is expected to grow by 3.5% in 2015. According to a forecast published by Euroconstruct in November 2014, the Danish construction market is expected to increase by 2.9% in 2015. Renovation is estimated to grow in all construction sectors in 2015. New residential construction is expected to grow backed by good underlying demand in the major cities. Market activity in non-residential construction is expected to improve mainly due to increasing construction of buildings for education and health. Infrastructure construction is forecasted to grow fuelled by several transport infrastructure projects. A major infrastructure project, the Fehnmarnbelt tunnel between Denmark and Germany, is expected to start summer 2015.
The overall demand in the Baltic equipment rental market is expected to remain fairly stable in 2015. According to a forecast published by Euroconstruct in November 2014, the total construction market in the Baltics is expected to decline slightly in 2015. In Estonia the construction market is expected to decline by 4% in 2015. The main construction projects will be located in the capital city region and southern Estonia. The Latvian construction market is also estimated to decline by 4%. Residential construction is expected to recover, but activity in the non-residential sector will slow down in 2015. In Lithuania the construction market is expected to grow by 1% in 2015. Increasing residential construction and high activity in renovation will be the main growth drivers in Lithuania. EU funded projects will support infrastructure construction and renovation projects in the Baltics. The decline in the oil price is expected to have a negative impact on energy sector projects.
Due to the prolonged Ukrainian crisis and rapid decline in oil prices, the demand for equipment rental in Russia is expected to be modest in 2015. Furthermore, the weakening of the rouble and high inflation have increased the macroeconomic uncertainty in Russia. According to a forecast published by Euroconstruct in November 2014, the Russian construction market is expected to decrease by 2% in 2015. Building construction is estimated to remain close to the previous year’s level supported by large ongoing projects but infrastructure construction is expected to decline clearly. In Ukraine, construction activity has slowed down considerably due to the crisis and market conditions are expected to remain challenging in 2015.
PROPOSAL OF THE BOARD ON THE USE OF DISTRIBUTABLE FUNDS
The parent company’s distributable equity on 31 December 2014 amounted to EUR 342,899,079.01 of which the net profit from the financial year 2014 is EUR 9,556,746.93.
The Board of Directors proposes to the Annual General Meeting 2015 that an ordinary dividend of EUR 0.40 (0.37) per share be paid for the financial year 2014. The proposed dividend will be paid to shareholders registered in Ramirent’s shareholder register maintained by Euroclear Finland Ltd on the record date for dividend payment 27 March 2015. The Board of Directors proposes that the dividend be paid on 10 April 2015.
The Board of Directors proposes further that the Annual General Meeting resolves that the Board of Directors be authorised to decide at its discretion on the payment of an additional dividend based on the adopted balance sheet for the financial year ended on 31 December 2014. The authorisation is proposed to be valid until the Annual General Meeting 2016 and the amount of the additional dividend may not exceed EUR 0.60 per share.
The proposed dividend is not reflected in the year 2014 financial statements.
ANNUAL GENERAL MEETING 2015
Ramirent Plc’s Annual General Meeting will be held in Scandic Marina Congress Center, Fennia I, at the address of Katajanokanlaituri 6, 00160 Helsinki, Finland on Wednesday 25 March 2014 at 10.00 a.m. The stock exchange release to convene the AGM 2015 will be published on the Company’s website 12 February 2015. Ramirent Plc’s Annual Report will be published on the Company’s website on 27 February 2015.
CORPORATE GOVERNANCE STATEMENT 2014 AND REMUNERATION STATEMENT 2014
Ramirent complies with the Finnish Corporate Governance Code 2010 approved by the Board of the Securities Market Association. Ramirent has published a Corporate Governance Statement based on the recommendation 54 and a Remuneration Statement based on the recommendation 47 of the Code, which are attached to this release in pdf format and can be reviewed on the website of Ramirent at www.ramirent.com.
ANALYST AND PRESS BRIEFING
A briefing for investment analysts and the press will be arranged 12 February, 2015 at 11:00 a.m. Finnish time at Ramirent Group headquarters, (visiting address: Äyritie 16, 01510 Vantaa).
WEBCAST AND CONFERENCE CALL
You can participate in the analyst briefing on Thursday 12 February 2015 at 11:00 a.m. Finnish time (EET) through a live webcast at www.ramirent.com and conference call. Dial-in number for conference call: +358 9 81710465 (FI), +46 8 51999355 (SE), +44 2031940550 (UK) and +18552692605 (US). A recording of the webcast will be available at www.ramirent.com later the same day.
FINANCIAL CALENDAR UNTIL END OF 2015
Ramirent observes a silent period during 21 days prior to the publication of annual and interim financial results.
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, 12 February 2015
RAMIRENT PLC
Board of Directors
FURTHER INFORMATION
Group President and CEO Magnus Rosén
tel.+358 20 750 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 – MORE THAN MACHINES. We are a leading rental equipment group combining the best equipment, services and know-how into rental solutions that simplify customer 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. Ramirent is the market leader in seven of the ten countries where it operates. In 2014, Ramirent Group sales totalled EUR 614 million. The Group has 2,600 employees in 302 customer centres in 10 countries. Ramirent is listed on the NASDAQ Helsinki Ltd.
Ramirent_Corporate_Governance_Statement_2014_WEB.pdf