Q1 2018 PRESENTATION 25 th April 2018 Leif Gustafsson, CEO Aku - - PowerPoint PPT Presentation

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Q1 2018 PRESENTATION 25 th April 2018 Leif Gustafsson, CEO Aku - - PowerPoint PPT Presentation

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Q1 2018 PRESENTATION 25 th April 2018 Leif Gustafsson, CEO Aku Rumpunen, CFO Q1 2018 Highlights Organic sales growth of 10.4% was supported by both business divisions Comparable EBITA improved by 17.3% to EUR 23.1 million (19.7)

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SLIDE 1

25th April 2018

Q1 2018 PRESENTATION

Leif Gustafsson, CEO Aku Rumpunen, CFO

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SLIDE 2

Q1 2018 Highlights

  • Organic sales growth of 10.4% was supported

by both business divisions

  • Comparable EBITA improved by 17.3% to EUR

23.1 million (19.7) with margin of 13.2% (12.1%) supported by both business divisions

  • Modular Space organic rental sales growth

14.2% and EBITA improvement by 35.2%

  • Acquisition of KBS Infra supporting ER Central

Europe

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SLIDE 3

FINANCIAL TARGET REALISATION

EQUIPMENT RENTAL MODULAR SPACE

* Target to grow faster than market. Market growth according to ERA (European Rental Association) in the markets where Cramo is present ** Organic sales growth excludes the impact of acquisitions, divestments and exchange rate changes and IFRS changes

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9.2 % 14.8 % 15.2 % 14.5 % 0% 5% 10% 15% 20% Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18

Comparable ROCE

Comparable ROCE Target 2017-20 12.9 % 10.5 % 9.8 % 12.5 % 0% 5% 10% 15% Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18

Comparable ROCE

Comparable ROCE Target 2017-20 7.0 % 4.0 % 10.2 % 3.7 % 0% 5% 10% 15% Q1/17 Q2/17 Q3/17 Q4/17 Q1/18

Organic** sales growth (y-o-y)*

Organic sales growth (YTD) Market* 8.9 % 7.0 % 9.5 % 9.3 % 14.2 % 10.0 % 0% 5% 10% 15% Q1/17 Q2/17 Q3/17 Q4/17 Q1/18

Organic** rental sales growth (y-o-y)

Organic rental sales growth (YTD) Target 2017-20

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SLIDE 4

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BUSINESS SEGMENTS

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85.7 92.2 92.2 20 40 60 80 100 120 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18

Sales (EUR million)

Sales

10.8 15.7 16.7 12.0 % 17.7 % 19.3 % 10% 12% 14% 16% 18% 20% 22% 24% 5 10 15 20 25 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18

ROCE EBITA (EUR million)

EBITA and ROCE

EBITA ROCE

  • In Sweden, sales grew by 9.9% in local currency supported

by large projects and high market activity

  • In Norway, sales developed positively driven by good

demand and high utilisation rates

  • Profitability improved followed by organic sales growth
  • 2018 construction growth estimate for Sweden is +2%

according to Sveriges Byggindustrier

EQUIPMENT RENTAL: SCANDINAVIA

STRONG START TO THE YEAR – ORGANIC SALES GREW AND PROFITABILITY IMPROVED

+6% Organic growth +11.1%* vs LY

ER Scandinavia has operations in Sweden and Norway with capital employed of MEUR 366 at the end of Q1 2018.

+0%

All figures exclude IACs and are presented as comparable key figures * Organic growth reported in local currencies

92.2 92.2 0.0

  • 4.8

9.2

  • 4.4

0.0 20 40 60 80 100 120

Q1/17 Acquisitions Divestments Organic growth FX-changes IFRS 15 impact Q1/18

EUR million

Sales Q1/17 vs Q1/18

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28.1 30.7 32.3 5 10 15 20 25 30 35 40 45 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18

Sales (EUR million)

Sales

  • 0.5

2.2 2.4 8.2 % 13.4 % 13.4 % 0% 5% 10% 15% 20%

  • 2

2 4 6 8 10 12 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18

ROCE EBITA (EUR million)

EBITA and ROCE

EBITA ROCE

EQUIPMENT RENTAL: FINLAND AND EASTERN EUROPE

GOOD PERFORMANCE CONTINUED AS SALES GREW AND PROFITABILITY IMPROVED

+12% Organic growth +8.9%* vs LY +5.5%

  • Organic sales growth of 8.9% driven by accelerated

sales in Poland, Estonia and Lithuania. In Finland, sales grew by 3.9%.

  • Profitability improved as a result of good development in

sales.

  • Positive market development continued in Finland

especially in large cities. Market has been favourable also in other countries.

ER Finland and Eastern Europe has operations in four countries with capital employed of MEUR 185 at the end of Q1 2018. All figures exclude IACs and are presented as comparable key figures * Organic growth reported in local currencies

30.7 32.3 0.0

  • 1.0

2.6 0.1 0.0 5 10 15 20 25 30 35

Q1/17 Acquisitions Divestments Organic growth FX-changes IFRS 15 impact Q1/18

EUR million

Sales Q1/17 vs Q1/18

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13.8 14.5 18.7 5 10 15 20 25 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18

Sales (EUR million)

Sales

  • 3.4
  • 2.5
  • 1.8
  • 1.5 %

5.1 % 4.4 %

  • 3%
  • 1%

1% 3% 5% 7%

  • 4
  • 3
  • 2
  • 1

1 2 3 4 5 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18

ROCE EBITA (EUR million)

EBITA and ROCE

EBITA ROCE

EQUIPMENT RENTAL: CENTRAL EUROPE

IMPROVING PERFORMANCE SUPPORTED BY KBS INFRA ACQUISITION

Organic growth +7.5%* vs LY

ER Central Europe has operations in five countries with capital employed of MEUR 136 at the end of Q1 2018.

  • Strong sales growth supported by KBS Infra acquisition

(EUR 3.0 million impact)

  • Organic sales growth of 7.5% driven by Czech and

Slovakia with a very positive start to the year

  • Comparable EBITA improved by EUR 0.7 million

supported by KBS Infra acquisition

All figures exclude IACs and are presented as comparable key figures * Organic growth reported in local currencies

14.5 18.7 3.0 0.0 1.1 0.1 0.0 2 4 6 8 10 12 14 16 18 20

Q1/17 Acquisitions Divestments Organic growth FX-changes IFRS 15 impact Q1/18

EUR million

Sales Q1/17 vs Q1/18

+0.7m€ +29%

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7.9 6.3 8.5 12.9 % 10.5 % 9.8 % 5% 7% 9% 11% 13% 15% 17% 19% 1 2 3 4 5 6 7 8 9 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18

ROCE EBITA (EUR million)

EBITA and ROCE

EBITA ROCE 18.4 20.0 22.6 9.6 5.7 9.5 28.0 25.7 32.1 5 10 15 20 25 30 35 40 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18

Sales (EUR million)

Sales

Other sales Rental sales Sales

  • Good project sales performance during Q4/2017 supported

increase in rental sales

  • Profitability increased mainly due to higher rental sales as

well as performance improvement actions carried out in 2017

  • The outlook for rental market is seen unchanged; >10%

growth for Sweden and Finland and 5-10% growth for Denmark and Germany

MODULAR SPACE

STRONG PROFITABILITY GROWTH SUPPORTED BY PERFORMANCE IMPROVEMENT ACTIONS

Modular Space has operations in seven countries with capital employed over MEUR 333 at the end of Q1 2018.

+35% Organic growth +11.2%** vs LY +14.2%* +25%

All figures exclude IACs and are presented as comparable key figures * Organic rental sales growth (y-o-y) in local currencies ** Organic growth reported in local currencies

+25%

25.7 32.1 0.6

  • 0.1

2.8

  • 0.7

3.8 5 10 15 20 25 30 35

Q1/17 Acquisitions Divestments Organic growth FX-changes IFRS 15 impact Q1/18

EUR million

Sales Q1/17 vs Q1/18

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ACQUISITION OF KBS INFRA IN GERMANY

EXPANSION OF BUSINESS MODEL TO VALUE ADDING SERVICES

  • A leading, high-quality construction site logistics

company in Germany

  • Sales of EUR 32 million in 2017
  • The company is headquartered in Mainz
  • Operates nationwide through its 4 sites in

Germany

  • The company has 180 employees
  • Is consolidated from 1 March 2018 as part of

Cramo’s Equipment Rental Central Europe segment

  • KBS Infra’s service offering is built around the

extensive construction site planning and logistics expertise of its employees

  • Fleet consists of approximately 6000 containers,

extensive amount of on-site electricity equipment and other equipment related to construction site usage

  • Cramo sees significant cross-selling potential for

its current equipment rental offering by being able to gain early access to construction sites

  • Acquisition is expected to be EPS accretive in

2018 9

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NEW MODULAR SPACE PROJECTS IN Q1/18

BOLIV Temporary Care Center Gladsaxe, Denmark

▪ Customer: Gladsaxe Municipality ▪ Rental period: 36 months ▪ Solution: Elderly Care Center ▪ Number of modules: 64 of the C90 system ▪ Area: 2,436 sqm in two floors

Franckeschule School Frankfurt, Germany

▪ Customer: City of Frankfurt ▪ Rental period: 24 months ▪ Solution: School ▪ Number of modules: 246 units of the F50 system ▪ Area: Over 3,700 sqm in three floors

Denmark Germany Slovakia Lithuania Estonia Norway Sweden Finland

1

1

2

2 Cramo Adapteo is a leading modular space solution provider with a well established presence in seven countries serving customers in both the public and private sector with school, daycare, office, event and accommodation solutions.

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GROUP PERFORMANCE Q1 2018

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147 161 172 187 155 179 185 193 163 178 192 197 175

  • 2%

0% 2% 4% 6% 8% 10% 12% 50 100 150 200 250 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18

Sales growth (%, y-o-y) Sales (EUR million)

659 660 661 668 676 694 707 712 720 719 726 730 742

0% 1% 2% 3% 4% 5% 6% 7% 8% 600 620 640 660 680 700 720 740 760 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18

R12M sales growth (%, y-o-y) R12M sales (EUR million)

SALES DEVELOPMENT

ORGANIC SALES GROWTH 10.4% IN Q1 AGAINST LAST YEAR

* in local currencies ** organic sales growth in local currencies

Quarters Rolling 12 months

R12M Q1/18 vs. R12M Q1/17: +3.1% Q1/18 vs. Q1/17: +7.6% (+11.0%*) (+10.4%**)

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162.9 175.3 3.7

  • 5.9

15.8

  • 4.9

3.8 20 40 60 80 100 120 140 160 180 200

Q1/17 Acquisitions Divestments Organic growth FX-changes IFRS 15 impact Q1/18

EUR million

Sales Q1/17 vs Q1/18

GROUP Q1 ORGANIC SALES GROWTH VS LY

Organic sales growth +10.4% vs LY

▪ Equipment Rental +10.2%

▪ Scandinavia +11.1% ▪ Finland and Eastern Europe +8.9% ▪ Central Europe +7.5%

▪ Modular Space +11.2%

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IFRS 15 CHANGE AS OF 1 JANUARY 2018

IFRS15 CHANGES THE TIMING OF REVENUE RECOGNITION IN MODULAR SPACE

  • Cramo Group has adopted IFRS15 standard as of 1

January 2018. The comparison figures 2017 have not been restated.

  • IFRS15 impacts the timing of revenue recognition in

Cramo’s Modular Space business.

  • Under IFRS15, revenue and costs are recognised over

the assembly and disassembly phase. Prior to IFRS15, revenue and costs were recognised at the handover to customer.

  • During Q1/2018 Modular Space recognised EUR 3.8

million revenue for projects, which were not yet handed

  • ver to customer at the end of Q1/2018. In 2017, such

projects were not recognised as revenue, but cost for the projects were in balance sheet as prepaid expenses. Cumulative sales

Costs Profit Prepaid expenses

Until 2017 – MS assembly/disassembly phase

Handover to customer

Cumulative sales

Costs

IFRS15 – MS assembly/disassembly phase

Handover to customer

Weeks - months Weeks - months

Profit

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10.1 18.4 31.4 27.0 13.0 26.6 38.9 32.6 19.7 27.8 40.2 32.4 23.1 6.9 % 8.3 % 12.1 % 13.2 %

5% 7% 9% 11% 13% 15% 17% 19% 21% 23% 5 10 15 20 25 30 35 40 45 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18

EBITA margin (%, line graph) EBITA (EUR million)

79 85 86 87 90 98 105 111 118 119 120 120 123 12.0 % 13.3 % 16.4 % 16.6 %

5% 7% 9% 11% 13% 15% 17% 19% 20 40 60 80 100 120 140 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18

R12M EBITA margin (%, line graph) R12M EBITA (EUR million)

COMPARABLE EBITA DEVELOPMENT

IMPROVEMENT SUPPORTED BY BOTH BUSINESS DIVISIONS

Quarters Rolling 12 months

Q1/18 vs. Q1/17: 17.3% R12M Q1/18 vs. R12M Q1/17: +4.8%

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239.4 240.4 65.5 67.9 59.8 64.2 59.3 56.9 54.8 51.4 59.1 33.6 % 33.0 % 34.0 % 34.5 % 32.3 % 33.5 % 33.1 % 31.9 % 35.3 % 31.5 % 33.7 % 50 100 150 200 250 300 0.0 % 5.0 % 10.0 % 15.0 % 20.0 % 25.0 % 30.0 % 35.0 % 40.0 % 2016 2017 2018 2016 2017 2018 2016 2017 2018 2016 2017 2018 2016 2017 2018 Jan-Dec Q4 Q3 Q2 Q1

Direct cost (EUR million) Direct cost ratio

Direct costs (right axis) Direct cost ratio (left axis) 272.9 276.3 73.8 72.8 63.6 63.6 70.4 70.7 65.1 69.2 69.3 38.3 % 37.9 % 38.2 % 37.0 % 34.4 % 33.1 % 39.3 % 39.7 % 41.9 % 42.5 % 39.5 % 50 100 150 200 250 300 350 400 0.0 % 5.0 % 10.0 % 15.0 % 20.0 % 25.0 % 30.0 % 35.0 % 40.0 % 45.0 % 50.0 % 2016 2017 2018 2016 2017 2018 2016 2017 2018 2016 2017 2018 2016 2017 2018 Jan-Dec Q4 Q3 Q2 Q1

Indirect cost (EUR million) Indirect cost ratio

Indirect costs (right axis) Indirect cost ratio (left axis) * Comparison before IACs 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”

QUARTERLY INDIRECT COST 2 QUARTERLY DIRECT COST 1

DEVELOPMENT IN COST BASE*

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Direct costs ratio was mainly impacted by sales mix and IFRS15 transition Indirect cost ratio improved driven by sales growth.

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19.7 23.1 19.7 1.0 0.3 0.7 2.2

  • 0.8

1.9 2.2

  • 0.7

5 10 15 20 25 30 Q1/2017 ER Scandinavia ER Eastern Europe ER Central Europe MS Non-allocated Q1/2018 ER MS Non-allocated Q1/2017 Development against LY Development against LY

Comparable EBITA (EUR million)

COMPARABLE EBITA BRIDGE Y-O-Y

12.1% of sales 13.2% of sales 12.1% of sales

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Organic sales growth driving EBITA growth KBS acquisition supports Higher rental sales and performance improvement actions

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0.09 0.23 0.45 0.39 0.16 0.40 0.64 0.51 0.28 0.42 0.66 0.51 0.35 0.00 0.50 1.00 1.50 2.00 2.50 0.00 0.20 0.40 0.60 0.80 1.00 1.20 1.40 1.60 1.80 2.00 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18

EPS R12M (EUR, line graph) Quarterly EPS (EUR, bar graph)

COMPARABLE EPS PERFORMANCE

1.83 1.94 1.23 18

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3.5 44.9 53.0 73.5 23.6 39.3 51.2 58.2 42.3 27.1 47.5 69.7 20.8

  • 40
  • 20

20 40 60 80

  • 40
  • 20

20 40 60 80 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18

Cash flow after investments(EUR million, line graph) Operating cash flow (EUR million, bar graph)

OPERATING CASH FLOW AND CASH FLOW AFTER INVESTMENTS

5.4

  • 4.3
  • 30.5

Acquisition of shares

  • f KBS Infra €17.8m

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Periodic fluctuation of NWC (-€12.3m) and timing of interest payments of bond (-€3.7m) Periodic release of NWC (€+5.4m)

  • 27.8
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23.6 42.3 20.8

5 10 15 20 25 30 35 40 45 50

Q1/16

  • perating

cash flow Q1/17

  • perating

cash flow CF before NWC, finance and tax Change in NWC Financial items Income taxes Q1/18

  • perating

cash flow EUR million

OPERATING CASH FLOW AFFECTED BY PERIODIC NWC CHANGE

20

4.2

  • 17.8
  • 6.5
  • 1.4

▪ Operating cash flow was EUR 21.5m lower than last year due to:

▪ Periodic fluctuation of NWC:

▪ Q1/17 NWC release of EUR +5.4 million ▪ Q1/18 NWC tied EUR -12.3 million

▪ Financial items due to timing of interest payments of bond EUR 3.7m ▪ Income taxes due to higher taxable income ▪ Cash flow before NWC, financing and tax improved EUR 4.2m against last year

▪ First quarter is typically lowest

  • perating cash flow due to

seasonal fluctuation.

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COMPARABLE ROE AND NET DEBT TO EBITDA

12,0 % 16,8 % 16,9 % 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18

Comparable ROE%

Comparable ROE Target >15.0% 2017-20 1,96 1,68 1,83 0,00 0,50 1,00 1,50 2,00 2,50 3,00 3,50 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18

Net debt / EBITDA

Net debt / EBITDA Target < 3.00 2017-20

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CONCLUSION AND OUTLOOK 2018

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CONCLUSION & OUTLOOK 2018

SHAPE AND SHARE

Q1 2018

  • Organic sales growth 10.4% against last year

supported by both business divisions

  • EBITA growth 17.3% against last year supported by

both business divisions

  • Perfomance improvement actions in Modular Space

bearing fruit as EBITA grew 35% against last year

  • KBS Infra acquisition consolidated since March

Outlook

  • Rental market is expected to grow also in 2018, but

at a slower pace than in 2017

  • In Modular Space division positive effects of the
  • rganisational restructuring and improved project

management are expected to follow in 2018

  • We constantly monitor our investment levels in order

to adapt to changes in demand

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