RAMIRENT PLC INTERIM REPORT 7 MAY 2015 at 9:00
Vantaa, Finland, 2015-05-07 08:00 CEST (GLOBE NEWSWIRE) —
Note! Figures in brackets, unless otherwise indicated, refer to the corresponding period a year earlier.
PERFORMANCE JANUARY-MARCH 2015
- Net sales EUR 140.6 (137.5) million, up by 2.2% or by 5.4% at comparable exchange rates
- EBITDA EUR 28.6 (31.7) million or 20.3% (23.0%) of net sales
- EBITA EUR 4.1 (7.1) million or 2.9% (5.2%) of net sales
- Result for the period EUR -0.0 (2.6) million and EPS EUR -0.00 (0.02)
- Return on invested capital (ROI) on a rolling 12 months basis was 12.9% (13.9%)
- Gross capital expenditure EUR 18.1 (23.4) million
- Cash flow after investments EUR 0.9 (-5.1) million
- Net debt EUR 226.2 (212.0) million
- Net debt to EBITDA ratio 1.4x (1.2x)
RAMIRENT OUTLOOK FOR FULL YEAR 2015 UNCHANGED
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
| 1-3/15 | 1-3/14 | Change | 1-12/14 | |
| (MEUR) | ||||
| Net sales | 140.6 | 137.5 | 2.2% | 613.5 |
| EBITDA | 28.6 | 31.7 | -9.7% | 167.9 |
| % of net sales | 20.3% | 23.0% | 27.4% | |
| EBITA excluding non-recurring items | 4.1 | 7.1 | -42.0% | 71.5 |
| % of net sales | 2.9% | 5.2% | 11.7% | |
| EBITA1) | 4.1 | 7.1 | -42.0% | 65.8 |
| % of net sales | 2.9% | 5.2% | 10.7% | |
| EBIT | 2.0 | 5.4 | -63.5% | 58.1 |
| % of net sales | 1.4% | 3.9% | 9.5% | |
| EBT | -0.2 | 3.2 | -106.7% | 42.5 |
| % of net sales | -0.2% | 2.3% | 6.9% | |
| Result for the period attributable to the owners of the parent company | -0.0 | 2.6 | -101.0% | 32.6 |
| Earnings per share (EPS), (basic and diluted), EUR | -0.00 | 0.02 | -101.0% | 0.30 |
| Gross capital expenditure on non-current assets | 18.1 | 23.4 | -22.7% | 144.6 |
| Gross capital expenditure, % of net sales | 12.9% | 17.0% | 23.6% | |
| Cash flow after investments | 0.9 | -5.1 | 118.0% | 21.8 |
| Invested capital at the end of period | 520.3 | 545.1 | -4.5% | 555.2 |
| Return on invested capital (ROI),%2) | 12.9% | 13.9% | 12.2% | |
| Return on equity (ROE),%2) | 9.7% | 13.6% | 9.4% | |
| Net debt | 226.2 | 212.0 | 6.7% | 227.1 |
| Net debt to EBITDA ratio2) | 1.4x | 1.2x | 15.7% | 1.4x |
| Gearing,% | 77.7% | 64.2% | 69.9% | |
| Equity ratio,% | 38.6% | 43.8% | 43.7% | |
| Personnel at end of period | 2,608 | 2,529 | 3.1% | 2,576 |
1) EBITA is operating profit before amortisation and impairment of intangible assets.
2) Rolling 12 months
COMMENTS FROM CEO MAGNUS ROSÉN:
“Despite a tough market in two of our key countries, Group net sales increased by 5.4% at comparable exchange rates in the first-quarter. However, first-quarter EBITA decreased to EUR 4.1 (7.1) million or 2.9% (5.2%) of net sales. EBITA margin was affected negatively by a higher share of service sales, start-up costs in large Solutions projects, reorganisation of maintenance and repair operations, as well as price pressure especially in the Finnish and Norwegian equipment rental markets. Increasing service business will be a key to generate sustainable profitable growth. Return on invested capital was 12.9% and return on equity was 9.7% compared to the financial target of 18%. Our full-year outlook for 2015 remains unchanged.
We are not satisfied with the current profitability level. In the first quarter we continued to implement our efficiency programme developing our common operational model and processes for the whole Group. Our efficiency actions will continue during 2015 and the margin improvement stemming from these actions is expected to materialise mainly in 2016 and onwards.
Sales growth was strongest in Sweden supported by demand from residential and infrastructure construction. In Finland, despite slow underlying demand in the construction and industry sectors, net sales grew based on good activity in small and mid-sized projects in Southern Finland, but increased price pressure and increased handling costs burdened profitability. In Norway, slow underlying demand in building construction affected net sales negatively and restructuring of the operations to improve profitability continued. In addition, the decline in oil prices impacted negatively on the demand from the Norwegian oil & gas sector. In Denmark, first-quarter market activity remained stable but a tough competitive environment and an unfavourable sales mix impacted negatively on profitability. In the Baltics, our strong performance continued driven by favourable demand among small and medium sized customers. In Europe Central, EBITA result improved compared to previous year due to favourable demand in Polish industrial projects as well as strong sales growth in the Czech Republic and Slovakian operations. In Fortrent markets in Russia and Ukraine, high political and macroeconomic uncertainty continued.
In the quarter, we continued to develop our offering of solutions and value adding services according to our promise of delivering More Than Machines. During the first quarter, we received a number of new demanding total rental solutions projects in line with our strategy. The largest contract was signed with AMF Fastigheter to provide a total rental solution for machines and related services during the implementation of Urban Escape project which comprises offices, hotels, commercial premises and other facilities in Stockholm. The contract will run until 2018 and the order is worth approximately EUR 40 million for deliveries to AMF Fastigheter as well as to other cooperation partners.
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. Based on our continued solid financial position, we will also continue pursuing outsourcing opportunities and acquisitions.”
MARKET OUTLOOK 2015
Ramirent expects market conditions for equipment rental to be challenging in Finland in 2015. According to a forecast published by Confederation of Finnish Construction Industries (RT) in March 2015, the Finnish construction market is expected to decrease by 0.5% 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 especially outside the capital city region. 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.
Ramirent expects the demand for equipment rental to improve in Sweden in 2015, driven by increasing activity in all construction sectors. According to a forecast published by Swedish Construction Federation (BI) in March 2015, the Swedish construction market is expected to grow by 8.0% in 2015. New residential start-ups will remain at a high level due to 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.
Ramirent expects market conditions for equipment rental to be challenging in Norway in 2015 due to increased macroeconomic uncertainty combined with the decline in oil prices. According to a forecast published by Prognosesenteret in March 2015, the Norwegian construction market is expected to grow by 3.7% in 2015. 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. Infrastructure construction supported by government stimulus measures will be the main growth driver fuelled by several road, railway and metro projects. According to the Norwegian Oil and Gas association, investments in the oil and gas sector are estimated to decline by 11% in 2015.
Ramirent expects market conditions for equipment rental to be balanced in Denmark in 2015. According to a forecast published by Danish Construction Industry (DB) in February 2015, the Danish construction market is expected to decline by 1.9% in 2015. Demand in the renovation market is expected to soften clearly this year.
New residential construction is estimated to remain stable backed by a healthy underlying demand in the major cities. Market activity in non-residential construction is expected to improve slightly mainly due to increasing construction of buildings for education and health. Several transport infrastructure projects are expected to support the market situation.
Ramirent expects the overall demand in the Baltic equipment rental market to remain balanced 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 are expected to fuel infrastructure construction and renovation in the Baltics during the second half of the year. The decline in the oil price is expected to have a negative impact on energy sector projects.
Ramirent expects the demand for equipment rental to be modest in Russia in 2015. The decline in the oil price has a negative impact on the economy and construction activity in Russia. The volatility of the rouble and the Russian financial market hinder economic growth in Russia. The prolongation and expansion of the Ukrainian crisis is still a significant near-term risk. According to the forecast published by Euroconstruct in November 2014, the Russian construction market will 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 improve in 2015. In 2015, the Polish construction market is estimated to grow by 7.1% according to a forecast published by Euroconstruct in November 2014. 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 the 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 by especially construction of industrial buildings. The market situation in renovation is estimated to remain stable. High project activity in the energy sector and other industrial sectors is expected to support the demand for equipment rental. In the Czech Republic and Slovakia, the construction market is expected to grow by 2.5% and by 1.8% respectively in 2015.
ANALYST AND PRESS BRIEFING
A briefing for investment analysts and the press will be arranged 7 May, 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 7 May 2015 at 11:00 a.m. Finnish time (EET) through a live webcast at and conference call. Dial-in numbers are: (FI) +358981710495, (UK) +442031940552, (SE) +46856642702 and (US) +18557161597. 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-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, 7 May 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 – 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 301 customer centres in 10 countries. Ramirent is listed on the NASDAQ Helsinki Ltd.
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