RAMIRENT PLC INTERIM REPORT 6 AUGUST 2015 at 9:00
Vantaa, Finland, 2015-08-06 08:00 CEST (GLOBE NEWSWIRE) —
Note! Figures in brackets, unless otherwise indicated, refer to the corresponding period a year earlier.
PERFORMANCE APRIL–JUNE 2015
• Net sales EUR 159.4 (151.8) million, up by 5.0% or by 6.9% at comparable exchange rates
• EBITDA EUR 46.0 (42.2) million or 28.9% (27.8%) of net sales
• EBITA EUR 21.0 (16.2) million or 13.2% (10.7%) of net sales
• EBITA excluding non-recurring items1) EUR 17.2 (16.2) million or 10.8% (10.7%) of net sales
• Profit for the period EUR 13.2 (7.1) million and EPS EUR 0.12 (0.07)
1) Non-recurring items includes a non-recurring income of 3.8 MEUR recognised from the settlement of earn-out in the weather shelter and scaffolding company DCC acquired in 2014.
PERFORMANCE JANUARY–JUNE 2015
• Net sales EUR 300.0 (289.3) million, up by 3.7% or by 6.2% at comparable exchange rates
• EBITDA EUR 74.6 (73.9) million or 24.9% (25.5%) of net sales
• EBITA EUR 25.2 (23.3) million or 8.4% (8.0%) of net sales
• EBITA excluding non-recurring items EUR 21.3 (23.3) million or 7.1% (8.0%) of net sales
• Profit for the period EUR 13.1 (9.7) million and EPS EUR 0.12 (0.09)
• Return on invested capital (ROI) on a rolling 12 months basis improved to 12.3% (11.9%)
• Return on equity (ROE) on a rolling 12 months basis was 11.5% (12.1%)
• Gross capital expenditure EUR 65.0 (101.8) million
• Cash flow after investments EUR −21.4 (−24.5) million
• Net debt EUR 297.1 (273.4) million and net debt to EBITDA was 1.8x (1.6x)
RAMIRENT OUTLOOK FOR FULL YEAR 2015 UNCHANGED
Ramirent expects the market picture for 2015 to remain mixed, with challenging market conditions especially 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.
| KEY FIGURES | 4–6/15 | 4–6/14 | Change | 1–6/15 | 1–6/14 | Change | 1–12/14 |
| (MEUR) | |||||||
| Net sales | 159.4 | 151.8 | 5.0% | 300.0 | 289.3 | 3.7% | 613.5 |
| EBITDA | 46.0 | 42.2 | 9.0% | 74.6 | 73.9 | 1.0% | 167.9 |
| % of net sales | 28.9% | 27.8% | 24.9% | 25.5% | 27.4% | ||
| EBITA excluding non-recurring items | 17.2 | 16.2 | 6.4% | 21.3 | 23.3 | −8.4% | 71.5 |
| % of net sales | 10.8% | 10.7% | 7.1% | 8.0% | 11.7% | ||
| EBITA | 21.0 | 16.2 | 30.2% | 25.2 | 23.3 | 8.1% | 65.8 |
| % of net sales | 13.2% | 10.7% | 8.4% | 8.0% | 10.7% | ||
| EBIT | 18.8 | 14.2 | 31.9% | 20.7 | 19.6 | 5.7% | 58.1 |
| % of net sales | 11.8% | 9.4% | 6.9% | 6.8% | 9.5% | ||
| EBT | 16.7 | 9.1 | 82.1% | 16.4 | 12.4 | 32.9% | 42.5 |
| % of net sales | 10.4% | 6.0% | 5.5% | 4.3% | 6.9% | ||
| Result for the period attributable to the owners of the parent company | 13.2 | 7.1 | 84.2% | 13.1 | 9.7 | 35.4% | 32.6 |
| Earnings per share (EPS), (basic and diluted), EUR | 0.12 | 0.07 | 84.2% | 0.12 | 0.09 | 35.3% | 0.30 |
| Gross capital expenditure on non-current assets | 46.8 | 78.3 | −40.2% | 65.0 | 101.8 | −36.2% | 144.6 |
| Gross capital expenditure, % of net sales | 29.4% | 51.6% | 21.7% | 35.2% | 23.6% | ||
| Cash flow after investments | −22.3 | −19.4 | −15.0% | −21.4 | −24.5 | 12.6% | 21.8 |
| Invested capital at the end of period | 602.4 | 610.5 | −1.3% | 555.2 | |||
| Return on invested capital (ROI),%1) | 12.3% | 11.9% | 12.2% | ||||
| Return on equity (ROE),%1) | 11.5% | 12.1% | 9.4% | ||||
| Net debt | 297.1 | 273.4 | 8.7% | 227.1 | |||
| Net debt to EBITDA ratio1) | 1.8x | 1.6x | 11.0% | 1.4x | |||
| Gearing,% | 97.9% | 84.2% | 69.9% | ||||
| Equity ratio,% | 39.0% | 40.3% | 43.7% | ||||
| Personnel at end of period (FTE) | 2,682 | 2,651 | 1.2% | 2,576 |
1) Rolling 12 months
COMMENTS FROM CEO MAGNUS ROSÉN:
“Overall the second quarter developed according to our expectations. Ramirent’s second-quarter net sales grew by 5.0% to EUR 159.4 million or 6.9% at comparable exchange rates. Second-quarter sales grew in all segments except for Norway. Demand improved topline especially towards the end of the quarter. After a weaker first quarter, our Group EBITA excluding non-recurring items improved somewhat to EUR 17.2 (16.2) million. The EBITA–margin was 10.8% (10.7%) for the second quarter and 7.1% (8.0%) for the first half. EBITA was supported by an increase in Customer Centre sales, progress in Solutions projects as well as good fixed cost control in the operations. We continue to focus on improving the profitability level.
Our efficiency programme and work on the improvement agenda NextRamirent proceeded in the second quarter. We continued to develop our offering of solutions and value added services to sharpen differentiation. Among other things, we signed a letter of intent with NCC Roads to start exploring possibilities for closer cooperation in road and traffic safety. Our determined work on developing the common business platform targeted to drive efficiency and harmonise our operational model continued. We are seeing performance improving from implemented efficiency actions in particular the centralising of maintenance and repair operations, reduction of non-productive fleet and from establishing a shared service centre for financial services. In the quarter, we also continued enhancing pricing management procedures and improving fleet utilisation by developing the productivity of our supply chain management. As communicated earlier, the margin improvement stemming from these actions is expected to materialise mainly in 2016 and onwards.
Sales growth accelerated in Sweden supported by high overall construction activity and our profitability improved as the large solution projects advanced. In Denmark, our activity levels picked up and cost reduction measures started to show results. Also in Europe Central, net sales picked up owing to an increase in construction of roads, industrial buildings and especially in Poland power plants. In Baltics, we saw continued strong performance supported by a healthy construction activity.
In Norway, on the other hand, our performance weakened compared to the previous year due to lower demand in residential construction as well as softness in the oil and gas sector. Demand in the Finnish market continued to be sluggish, except for Southern Finland where growth was supported by ongoing construction projects.
As demand started to accelerate towards the end of the quarter, we expect overall demand to continue improving in the second half of the year in Sweden, Denmark, Europe East and Europe Central, whilst we expect challenging market conditions to prevail in Finland and Norway.
Ramirent is on a journey of change moving from a product based company to a solutions and knowledge based company with the ambition to offer a unique customer experience. We will achieve this by continuing our determined work to achieve sustainable profitable growth, improve our differentiation developing complementary services for our customers and enhance our operational productivity creating a solid foundation for competitive operations also in the future.”
MARKET OUTLOOK 2015
Ramirent expects market conditions for equipment rental to remain challenging in Finland in the second half of the 2015. According to a forecast published by Euroconstruct in June 2015, the Finnish construction market is expected to be flat 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 especially outside the capital city region. Demand for equipment rental in non-residential construction is supported by start-ups of certain large commercial and industrial building projects. The new government is planning to increase infrastructure spending in order to stimulate the stagnant economy in the second half of 2015. The Confederation of Finnish Industries (EK) expects full-year industrial investments in the general manufacturing sector as well as in the energy sector to increase in 2015.
Ramirent expects the demand for equipment rental to remain favourable in Sweden in 2015, driven by high activity in all construction sectors. According to a forecast published by Euroconstruct in June 2015, the Swedish construction market is expected to grow by 5.0% in 2015. The market conditions are strong especially in many of Sweden’s major cities. New residential start-ups will remain at a high level due to continuous housing shortage in the market. Non-residential construction is expected to increase supported by growth in office and commercial building projects. The government’s transport infrastructure plan, approved in 2014, will fuel activity within infrastructure construction especially in the Stockholm and Gothenburg areas also in the second half of the year. 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.
Ramirent expects market conditions for equipment rental to remain challenging in Norway in the second half of 2015 due to macroeconomic uncertainty connected to the low oil price. According to a forecast published by Euroconstruct in June 2015, the Norwegian construction market is expected to grow by 2.6% in 2015. Infrastructure construction supported by government stimulus measures will be the main growth driver fuelled by several road, railway and metro projects. Residential construction is estimated to remain at the previous year’s level in 2015. Non-residential construction sector is expected to increase supported by public sector projects. Renovation construction is expected to increase in 2015. According to an estimate by Statistics Norway, investments in the oil and gas sector are estimated to decline clearly in 2015.
Ramirent expects market conditions for equipment rental to be balanced in Denmark in the second half of 2015. According to a forecast published by Euroconstruct in June 2015, the Danish construction market is expected to increase by 1.2% in 2015. Demand in the renovation market is expected to soften clearly while new residential construction is estimated to remain stable backed by a healthy underlying demand in the major cities. In the second half of 2015, public investments are expected to increase infrastructure construction and building activity in the health and education sector. Activity in the industrial sector is expected to support the demand for equipment rental in the second half of the year.
Ramirent expects the overall demand in the Baltic equipment rental market to remain balanced in the second half of 2015. According to a forecast published by Euroconstruct in June 2015, the total construction market in the Baltics is expected to decrease by 2.5% 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 parts of Estonia. The Latvian construction market is estimated to decline by 6% in 2015. Residential construction is expected to remain stable, but construction activity in the non-residential sector will slow down due to the continued economic uncertainty caused by the Ukrainian crisis. 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 the Lithuanian market. Several EU funded projects are expected to start in the second half of 2015, supporting especially infrastructure and renovation construction in the Baltics.
Ramirent expects the demand for equipment rental to be modest in Russia in 2015. The low oil price is impacting negatively on the economy and construction markets. The volatility of the rouble and the Russian financial market hinder economic growth in Russia. EU and US economic sanctions against Russia due to the Ukrainian crisis remain in place, creating further uncertainty over the development of the Russian economy. According to the forecast published by Euroconstruct in June 2015, the Russian construction market is estimated to decrease by approximately 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 and market conditions are expected to remain challenging throughout the 2015.
Ramirent expects the overall demand in Europe Central equipment rental markets to remain favourable in the second half of 2015. According to a forecast published by Euroconstruct in June 2015, the Polish construction market is estimated to grow by 9.7% in 2015. Infrastructure construction projects, funded largely by EU, will be the primary driver of growth in the construction sector. Market conditions are expected to be favourable in residential construction as new start-ups are forecasted to increase clearly. Construction activity is expected to continue to pick up in the non-residential sector supported especially by construction of industrial buildings. Increasing renovation as well as high project activity in the power plant and wind power sector is estimated to support the equipment rental market. In the Czech Republic and Slovakia, the construction market is expected to grow by 4.3% and by 2.1% respectively in 2015. Demand for equipment rental is expected to remain strong especially in the construction sector.
ANALYST AND PRESS BRIEFING
A briefing for investment analysts and the press will be arranged 6 August, 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 6 August 2015 at 11:00 a.m. Finnish time (EET) through a live webcast at and conference call. Dial−in numbers are: +358 9 8171 0495 (FI), +46 8 5664 2702 (SE), +44 203 194 0552 (UK) and +1 8 557 161 597 (US). Recording of the webcast will be available at 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.
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 August 2015
RAMIRENT PLC
Board of Directors
FURTHER INFORMATION
CEO Magnus Rosén
tel. +358 20750 2845,
CFO and EVP, Corporate Functions Jonas Söderkvist
tel. +358 20 750 3248,
SVP, Marketing, Communications and IR Franciska Janzon
tel. +358 20 750 2859,
DISTRIBUTION
NASDAQ OMX Helsinki
Main news media
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 2,682 employees in 295 customer centres in 10 countries. Ramirent is listed on the NASDAQ Helsinki (RMR1V). Ramirent – More Than Machines™.