CRAMO Q3 2019 PRESENTATION 31 st October 2019 Leif Gustafsson, CEO - - PowerPoint PPT Presentation

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CRAMO Q3 2019 PRESENTATION 31 st October 2019 Leif Gustafsson, CEO - - PowerPoint PPT Presentation

May 11, 2023 448 likes •633 views

CRAMO Q3 2019 PRESENTATION 31 st October 2019 Leif Gustafsson, CEO Aku Rumpunen, CFO Q3/2019 KEY FIGURES HIGHLIGHTS Net sales : 154.4 (159.6) MEUR The new strategy, Cramo NXT, was launched on 12 September 2019 at the Capital Markets

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SLIDE 1

31st October 2019

CRAMO

Q3 2019 PRESENTATION

Leif Gustafsson, CEO Aku Rumpunen, CFO

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SLIDE 2

2

▪ Net sales: 154.4 (159.6) MEUR

▪ -3.2% in reported currencies ▪ -1.9% in local currencies ▪ -1.9% organic sales growth

▪ Comparable EBITA: 26.5 (31.7*) MEUR or 17.2% (19.9%*) of sales ▪ Gross capex: 21.7 (40.5) MEUR ▪ Operative cash flow: 58.5 (41.6) MEUR ▪ Cash flow after investments: 39.2 (-8.6) MEUR

Q3/2019

KEY FIGURES

*including IFRS 16 impact

HIGHLIGHTS

▪ The new strategy, Cramo NXT, was launched on 12 September 2019 at the Capital Markets Day. ▪ The new financial targets for 2019-2023, and guidance for 2020 (Comparable EBITA > EUR 75 million) were released. ▪ Cost program initiated during Q3 proceeding according to plans, and is fully executed by the end

  • f 2019. The targeted run-rate cost savings of EUR

10-12 million visible gradually from the fourth quarter

  • f 2019 onwards, and in full effect for 2020
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SLIDE 3

2019E 2020E Sweden

  • 3.2 %
  • 2.9 %

Finland

  • 1.9 %
  • 2.6 %

Norway 4.7 % 1.9 % Central Europe 0.6 %

  • 0.3 %

Eastern Europe 7.8 % 3.9 %

90 95 100 105 110 115 120 125 130 135 140 2015 2016 2017 2018 2019 2020 2021 Index, 2015=100

Construction output outlook

Sweden Finland Norway Central Europe Eastern Europe

CONSTRUCTION MARKET

MARKET IS EXPECTED TO STILL GROW IN NORWAY AND EASTERN EUROPE

Sources: Euroconstruct and Forecon

▪ According to Euroconstruct estimates the construction market growth is seen to be levelling out in Sweden, Finland and Germany ▪ Growth in Norway is still seen to be strong – main driver civil engineering ▪ Growth in Eastern Europe is expected to continue but at the slower pace

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143.8 156.1 159.6 172.4 148.4 153.1 154.4 4.4 % 3.0 % 3.1 % 6.5 % 3.2 %

  • 1.9 %
  • 3.2 %

120 130 140 150 160 170 180 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2018 2019 Total sales Sales growth q-o-q 14.9 22.4 31.7 25.8 11.8 15.3 26.5 10.4 % 14.3 % 19.9 % 15.0 % 8.0 % 10.0 % 17.2 % 0% 5% 10% 15% 20% 25% 5 10 15 20 25 30 35 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2018 2019 Comparable EBITA* Comparable EBITA* margin-% EUR million EUR million

Q3 SALES AND COMPARABLE EBITA

COMPARABLE EBITA* BELOW LAST YEAR

4

  • 1.9%

* Excluding IACs with IFRS16 impact ** in local currencies

  • 20.4%
  • 31.5%
  • 16.3%

Compared to same period previous year

  • 0.4%

+5.8%

Compared to same period previous year**

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SLIDE 5

BUSINESS SEGMENTS

5

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SLIDE 6

92.2 91.2 86.9 100.1 89.4 84.1 79.6 20 40 60 80 100 120 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2018 2019 Sales EUR million 17.1 17.4 19.4 20.9 15.4 12.0 16.1 22.5 % 22.9 % 22.8 % 22.2 % 21.6 % 20.0 % 19.5 % 14% 16% 18% 20% 22% 24% 5 10 15 20 25 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2018 2019 Comparable EBITA Comparable operative ROCE EUR million

  • Decreasing sales in Sweden due to large industrial projects

ending and new projects being postponed into late Autumn. Sales development good in Norway led by service sales.

  • Driven by the lower topline in Sweden, the segments

comparable EBITA decreased by 16.6%. Ongoing cost savings program is proceeding according to plans.

  • In Sweden underlying market is still active and growth can be

seen in selected regions and customer segments. Two large industrial projects were signed in Q2 and will start contributing positively from the fourth quarter of 2019.

  • In Norway market growth is expected to continue driven by

growth in civil engineering.

  • According to Forecon, equipment rental market is expected to

decrease by 1% in Sweden and increase by 4% in Norway in 2020.

SCANDINAVIA

POSTPONED NEW INDUSTRIAL PROJECTS IN SWEDEN AFFECTED NEGATIVELY ON PROFITABILITY, SOLID PERFORMANCE CONTINUED IN NORWAY

Scandinavia has operations in Sweden and Norway with operative capital employed of MEUR 306 at the end of Q3 2019. All figures exclude IACs and include IFRS16 impact Organic growth reported in local currencies

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  • 6.1% organic
  • 8.4% reported
  • 16.6%
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32.7 35.6 38.9 39.8 33.5 35.7 38.3 10 20 30 40 50 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2018 2019 Sales EUR million 2.7 4.7 8.7 7.5 2.0 4.2 8.1 15.3 % 14.5 % 13.0 % 12.9 % 12.4 % 12.1 % 11.8 % 0% 4% 8% 12% 16% 20% 2 4 6 8 10 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2018 2019 Comparable EBITA Comparable operative ROCE EUR million

  • Q3 sales decreased by 1.6% driven by all countries except
  • Lithuania. The market is stabilising in all countries, which is

effecting on sales growth. Sales growth in Poland and Estonia levelled out and remained flat in Finland.

  • Q3 comparable EBITA amounted to 8.1 (8.7) MEUR.

Decrease was mainly due to lower sales performance and different sales mix. In order to ensure future profitability, the cost savings program kicked off in all countries.

  • According to Forecon, the equipment rental market is

expected to grow by 2% in Finland in 2020. Growth is expected to come outside new residential construction.

  • In Estonia, market conditions are still solid, but growth is

levelling out. In Lithuania the market is expected to grow, but at a lower pace. In Poland the equipment rental market is stabilising.

FINLAND AND EASTERN EUROPE

MARKET STABILISATION IMPACTING ON SALES AND PROFITABILITY

Finland and Eastern Europe has operations in four countries with

  • perative capital employed of MEUR 180 at the end of Q3 2019.

All figures exclude IACs and include IFRS16 impact Organic growth reported in local currencies

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  • 1.6% organic
  • 1.6% reported
  • 4.9%
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18.8 29.3 33.7 32.5 25.5 33.4 36.5 10 20 30 40 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2018 2019 Sales EUR million

  • 1.7

2.8 5.7 2.6

  • 2.1

1.9 4.3 4.8 % 4.8 % 6.1 % 6.4 % 5.9 % 5.1 % 4.0 % 0% 2% 4% 6% 8%

  • 3

3 6 9 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2018 2019 Comparable EBITA Comparable operative ROCE EUR million

  • The third quarter sales growth was highly driven by KBS Infra
  • Q3 comparable EBITA was EUR 4.3 (5.7) million with a

11.7% (17.0%) margin. Main drivers for the lower profitability level were sales mix as well as increased indirect costs and depreciations in KBS due to growth investments.

  • The underlying performance in Germany has not reached our
  • targets. Various focused performance improvement actions

such as cost base optimisation, fleet and operational efficiency measures and sales actions are ongoing to increase the profitability of business.

  • German construction market growth has been slowing down.

The market for KBS Infra remains strong and project pipeline looks promising. In Czech Republic and Slovakia market conditions are more competitive and growth is levelling out. In Austria and Hungary market outlook has remained good.

CENTRAL EUROPE

STRONG SALES GROWTH DRIVEN BY KBS INFRA

Central Europe has operations in five countries with operative capital employed of MEUR 171 at the end of Q3 2019. All figures exclude IACs and include IFRS16 impact Organic growth reported in local currencies

8

+8.3% organic +8.3% reported

  • 25.3%
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GROUP PERFORMANCE Q3 2019

9

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159.6 154.4

  • 3.0
  • 2.2

50 100 150 200 Q3/2018 Acquisitions Organic growth FX impact Q3/2019 Group Sales drivers Group

Q3

6.3

  • 1.8
  • 8.0

459.5 455.9 100 200 300 400 500 Q1-Q3/2018 Acquisitions Organic growth FX impact Q1-Q3/2019 Group Sales drivers Group

Q1-Q3

EUR million EUR million

GROUP Q3 AND Q1-Q3 SALES GROWTH VS LY

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  • 3.2% reported
  • 1.9% local currencies
  • 1.9% organic growth
  • 0.8% reported

+1.0% local currencies

  • 0.4% organic growth
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31.7 26.5

  • 3.2
  • 0.6
  • 1.4

0.1 22 24 26 28 30 32 34 Q3 2018 Scandinavia Finland and Eastern Europe Central Non-allocated and elim Q3 2019 Group Business segments Group Comparable EBITA EUR million

COMPARABLE EBITA Q3 VS LY

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All figures exclude IACs and include IFRS16 impact * % change compared to same period previous year

  • 16.3%
  • 16.6%*
  • 6.7%*
  • 25.3%*
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SLIDE 12

DIRECT COST 1 INDIRECT COST 2

All figures exclude IACs and include IFRS16 impact 1 Direct cost refers to income statement line ”Materials and services” 2 Indirect cost refers to income statement lines ”Employee benefit expenses” and ”Other operating expenses”

DEPRECIATIONS

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89.6 97.8 30.3 32.3 19.5 % 21.4 % 19.0 % 20.9 % 50 100 150 200 250 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 2018 2019 2018 2019 Jan-Sep Q3

Depreciations (right axis) Depreciation of sales (left axis)

167.3 168.5 52.7 50.3 36.4 % 37.0 % 33.0 % 32.6 % 50 100 150 200 250 300 0% 5% 10% 15% 20% 25% 30% 35% 40% 2018 2019 2018 2019 Jan-Sep Q3

Indirect costs (right axis) Indirect cost ratio (left axis) EUR million

146.8 148.6 48.9 50.0 32.0 % 32.6 % 30.6 % 32.4 % 20 40 60 80 100 120 140 160 180 200 2018 2019 2018 2019 Jan-Sep Q3 0% 5% 10% 15% 20% 25% 30% 35% 40%

Direct costs (right axis) Direct cost ratio (left axis) EUR million EUR million

COST BASE DEVELOPMENT

COST PROGRAM PROCEEDING ACCORDING TO PLAN. NO MATERIAL EFFECTS YET VISIBLE IN Q3

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0.20 0.33 0.54 0.32 0.13 0.20 0.37 0.00 0.10 0.20 0.30 0.40 0.50 0.60 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2018 2019

COMPARABLE EPS DEVELOPMENT

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EUR

  • 31.7%

Figures exclude IACs and include IFRS16 impact

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417.8 443.8 447.4 428.5 418.8 458.1 399.9

1.92 2.05 2.08 1.99 1.92 2.15 1.92

1.70 1.80 1.90 2.00 2.10 2.20 350 375 400 425 450 475 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2018 2019 Net debt / EBITDA Net debt (EUR million) Net debt Net debt / EBITDA 15.2 % 15.0 % 14.4 % 13.9 % 13.3 % 12.2 % 11.6 % 10% 12% 14% 16% Q1 Q2 Q3 Q4 Q1 Q2 Q3 2018 2019 Comparable operative ROCE%

LEVERAGE AND COMPARABLE OPERATIVE ROCE %

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Historical net debt / EBITDA Q1-Q4/2018 illustrative for continuing operations Comparable operative ROCE % is calculated based on EBITA (rolling 12 months) divided by operative capital employed (12 month average). Operative capital employed is calculated by deducting goodwill and other intangible assets from the capital employed.

LEVERAGE COMPARABLE OPERATIVE ROCE %

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8.8 37.8 41.6 18.9 36.0 58.5

  • 38.7
  • 29.4
  • 50.2
  • 12.7
  • 9.8
  • 19.3
  • 60
  • 40
  • 20

20 40 60 80 Q1 Q2 Q3 Q1 Q2 Q3 2018 2019 Cash flow from operations Cash flow from investing activities Cash flow after investments EUR million

QUARTERLY CASH FLOW

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* *

  • 29.8
  • 8.6

6.1 39.2

Cash flow from continuing operations (2018 excluding IFRS16 impact)

CASH FLOW AFTER INVESTMENTS CLEARLY AHEAD OF LAST YEAR

8.3 26.3

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CONCLUSION AND OUTLOOK 2019

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MARKET OUTLOOK

Scandinavia

  • Forecon estimates that the rental market in 2020 will

decrease 1% in Sweden and grow 4% in Norway

  • The construction market in 2020 is estimated to decrease by

3% in Sweden and increase by 2% in Norway.

Finland and Eastern Europe

  • The rental market in Finland and Lithuania is estimated to

increase by 2% in 2020 while a 2% decrease is expected in Estonia

  • The construction market in 2020 is estimated to decrease by

3% in Finland

Central Europe

  • In Germany construction market has been slowing down. In

Czech Republic and Slovakia market growth is stabilising. The market growth has remained good in Austria and Hungary. 17

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CONCLUSIONS

  • Q3 performance was largely as expected
  • Cash flow generation was very strong during the quarter

and net debt reduced by 58 MEUR during Q3

  • Cost program initiated during Q3 is proceeding according

to plans, fully executed by the end of 2019. The targeted run-rate cost savings of EUR 10-12 million visible gradually from the fourth quarter of 2019 onwards, and in full effect for 2020

  • Market environment is levelling out in many countries,

however many growth opportunities seen

  • The new strategy and financial targets for 2019-2023 were

presented in CMD on 12th September

  • Guidance for 2020: Comparable EBITA for 2020 will be

above EUR 75 million 18