CAPITAL MARKETS DAY 12 September 2019
DISCLAIMER This presentation includes forward- looking statements. The words “believe”, “expect”, “anticipate”, “intend”, “may”, “plan”, “estimate”, “will”, “should”, “could”, “aim”, “target”, “might”, or, in each case, their negative, or any similar expressions identify certain of these forward-looking statements. Others can be identified from the context in which the statements are made. By their nature, forward-looking statements are subject to assumptions, risks and uncertainties. Although Cramo believes that the expectations reflected in these forward-looking statements are reasonable, actual results may differ, even materially, from those expressed or implied by these forward-looking statements. Cramo expects presentation participants and readers of this presentation not to place undue reliance on such statements. The information and views contained in this presentation are provided as at the date of this presentation and are subject to change without notice. Cramo does not undertake any obligation to publicly update or revise forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent legally required. Viewers are expected to understand that this presentation does not constitute, and should not be construed as, an offer or recommendation to buy, sell or subscribe for Cramo’s securities anywhere in the world or an inducement to enter into any investment activity relating to the same. No part of this presentation should form the basis of, or be relied on in connection with, any contract or commitment or decision to invest in Cramo securities whatsoever. Potential investors are instructed to acquaint themselves with Cramo’s annual accounts , interim reports and stock exchange releases as well as other information published by Cramo to form a comprehensive picture of the company and its securities. Cramo publishes inside information according to Market Abuse Regulation (MAR) and the rules of Nasdaq Helsinki. 2
TODAY’S SPEAKERS Leif Gustafsson Aku Rumpunen Martin Holmgren President & CEO CFO Senior Vice President, Fleet Management 3
AGENDA 12:30 – 13:00 Introduction and Cramo in brief Leif Gustafsson, President and CEO Cramo strategy 13:00 – 14:15 Leif Gustafsson, President and CEO Martin Holmgren, SVP Fleet Management 14:15 – 14:30 Q&A Leif Gustafsson, President and CEO Martin Holmgren, SVP Fleet Management 14:30 – 14:45 Break Financials 14:45 – 15:15 Aku Rumpunen, CFO 15:15 – 15:40 Key investment highlights Leif Gustafsson, President and CEO 15:40 – 15:55 Q&A Leif Gustafsson, President and CEO Aku Rumpunen, CFO Wrap-up 15:55 – 16:00 Leif Gustafsson, President and CEO 4
Business partner, Your productivity digital innovator and frontrunner. partner in rental Through reliable products, services and innovative digital solutions, Cramo is a business partner and beyond increasing the productivity and work safety of our customers. We are a frontrunner in our industry. CRAMO GROUP Sustainability, digitalisation and focus on our people are at the core of our strategy. 5
CRAMO AT A GLANCE Company numbers Offering Market Market growth drivers ~ 2,700 ~ 300 1. New build construction and renovation need 2. Increasing penetration employees depots 3. Infrastructure and development projects 4. Demand of add-on services Tools Construction Access Building site equipment equipment facilities 5. Demand from industrial customers ~ 150,000 # 3. ~217,000 rental units European market position ~11,000 digitally connected units customers 2.4% market share in Europe (1) Other (4) Central Europe 6% Services (3) 20% 22% 4.2% Scandinavia 2.8% 57% € 634m € 634m Finland and Equipment Eastern Europe rental 23% 72% 2014-2019E 2019E-2020E 2019 LTM sales in 11 countries Revenue by segment Expected rental market growth p.a. (2) Notes: (1) Based on latest available market data and 2019 LTM revenue. (2) Data based on ERA and Forecon, weighted by Cramo’s sales in respective country. 6 (3) Includes assembly, maintenance and repair, logistics. (4) Includes primarily sale of merchandise and new machinery.
CRAMO CARE IS OUR STRATEGY FOR INTEGRATING SUSTAINABILITY INTO OUR BUSINESS Cramo Care focuses on 4 key areas (customer, employee, environmental and social care) with ambitious targets set within each 75 18.4 73 17.5 72 13.7 15.6 Target Target >70 <15t/ € m 9.9 9.5 by 2020 Target <5 by 2020 1 0 0 Target 0 2016 2017 2018 2016 2017 2018 2016 2017 2018 2016 2017 2018 Customer Care Employee Care Environmental Care Social Care Most satisfied customers in the industry Zero accidents Zero emissions Top ranking in business ethics Emissions (2) (t/ € m revenue) LTIR (1) Customer Satisfaction Index Legal proceedings Notes: (1) Number of work-related accidents with at least one full day absence / million working hours. 7 (2) CO 2 e emissions, scope 1 and 2 (relative to sales). A market-based method is used to calculate CO 2 e emissions from electricity.
VALUE-ADDING BUSINESS MODEL Customer NEW BUILD RENOVATION MAINTENANCE OPERATORS needs Cramo Source Ensure Distribute Maintain Provide operations equipment (OEMs) availability & collect & repair add-on services Revenue Rental Services Accessories / Resale streams revenue revenue Merchandise of assets Competitive advantages ~2,700 employees ~217,000 rental units Effective solutions ~11,000 digitally Multi-channel Sustainable solutions serve over available in and innovations connected units with business model to enabling and driving 150,000 customers in ~300 depots based on data driven insights ensure customer the sharing economy 11 countries customer needs experience 8
DIVERSE GROUP OF CUSTOMER NEEDS DRIVING DEMAND Customer needs Customer mix (1) Other 20% New build Renovation Residential, non-residential, Construction, industrial, industrial, others public, households Demand volatiIity: Cyclical Demand volatiIity: Moderate € 632m (2018) Maintenance Operators Industrials 23% Repair, maintain, extend Power, heat & cool, light, dry Construction industry 57% Demand volatiIity: Stable Demand volatiIity: Stable 9 Note: (1) Other consists of public sector, households and other.
WIDE RANGE OF PRODUCTS AND SERVICES OFFERED TO MEET CLIENTS’ DEMAND 10
EUROPEAN PLATFORM WITH 2019 LTM DENSE DEPOT FOOTPRINT Scandinavia 18.8% 20.0% EBITA MARGIN ROCE (1) 2 118 = Depot COUNTRIES DEPOTS = Hub Finland & Eastern Europe + 15.1% 11.7% 6 ROCE (1) 5 EBITA MARGIN 16 2 6 4 111 COUNTRIES DEPOTS 2 Central Europe 2 3 6.5% 4.9% 3 4 EBITA MARGIN ROCE (1) 2 2 Example of hub-and-spoke 2 5 structure in Stockholm 5 73 2 2 COUNTRIES DEPOTS 11 Note: (1) Operative ROCE defined as comparable EBITA to average of tangible assets and net working capital.
ECONOMIC VALUE-ADD OF RENTAL MODEL Illustrative example for Customer benefits Owning vs. renting Access equipment Illustrative example for Access equipment INVESTMENT PERSPECTIVE 250 Customer Cramo Frees up capital and lowers financial risk > • No capex 200 • Purchase Lowered financial risk 100 80 price: • Improves cost-effectiveness 150 Net cash flow Resale 100 OPERATING PERSPECTIVE 6 12 value after Allows greater focus on the core business 10 years: > • Outsources maintenance 50 Cramo break-even Customer break-even after ~3 years after ~9.5 years • Increases flexibility • Frees up resources Annual 5 4 0 R&M cost: (50) AWARENESS PERSPECTIVE Ensures alignment with CSR policies Time 30% 60% (100) • CO 2 emissions significantly reduced utilisation: > 0 1 2 3 4 5 6 7 8 9 10 • Local regulations fulfilled Year • Safety benefits with modern, well-serviced • equipment We aggregate and match demand and Cramo economics Customer economics supply, driving higher fleet utilisation 12 Note: Illustrative example.
THE JOURNEY TO CREATING TWO INDEPENDENT AND FOCUSED LISTED COMPANIES Demerger of Adapteo concludes a joint journey… …and now we are right - sizing Cramo to meet tomorrow’s demand We have developed Cramo and Adapteo to become two Actions taken to right-size our indirect cost base which will be fully independent and focused businesses in their respective executed during 2019 with full run-rate impact from 1 January 2020 segments During this journey, we have made significant investments in The actions primarily impact Group support functions as well as building strong management teams and organisational operations and support functions in countries where Cramo and capabilities in both companies Adapteo have had overlapping cost structures Employee benefit expenses € 3-4m Targeted run- rate savings Other € 10-12m operating expenses € 7-8m 13
DEMERGER AND ONGOING RIGHT-SIZING OF CRAMO PROVIDES FURTHER CLARITY AND EFFICIENCY GAINS Reduced complexity Strengthened and focused management More efficient and streamlined Cramo Clearer investment profile Increased capacity to grow and secure shareholder value 14
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