THE SHARING ECONOMY CRAMO GROUP DRIVING THE SHARING ECONOMY - - PowerPoint PPT Presentation

DRIVING THE SHARING ECONOMY

CRAMO GROUP

DRIVING THE SHARING ECONOMY

CRAMO GROUP

Our purpose is to drive the sharing economy

This purpose is closely connected to our vision – Shared Resources Simplified. By making the sharing

• f our rental solutions and value-adding services easy

for our customers, we also drive the development towards a sharing economy across the industry. Digitalisation, sustainability, innovation and focus on

• ur people are at the core of our Shape and Share

growth strategy.

DRIVING THE SHARING ECONOMY

CRAMO GROUP

CRAMO GROUP IN NUMBERS 2018

In addition to strong market position and brand, Cramo’s key strength is extensive rental concept combined with flexible business model and operational efficiency

780

SALES, MEUR

130

COMPARABLE EBITA, MEUR

1988

Listed on the Helsinki Stock Exchange, midcap

300

DEPOT NETWORK

2,753

AVERAGE NUMBER OF EMPLOYEES

230,000

FLEET

14

COUNTRIES

2

BUSINESS DIVISIONS

CRAMO LOCATIONS 2018

Russia Czech Rep. Austria Hungary Ukraine Norway Finland Sweden Lithuania Slovakia Estonia Germany Poland Denmark

#2

in Europe Cramo Fortrent

324

depots

#1

in the Nordics (MS)

14

countries

230,000

rental units

150,000

customers

300

depots

#2

in Europe

CRAMO GROUP TODAY

▪ Cramo is #2 in the equipment rental market in Europe ▪ Cramo Adapteo is #1 in modular space in the Nordic countries ▪ Sales of 780 MEUR and comparable EBITA 130 MEUR in 2018 ▪ We operate in 14 countries in the Nordic and Baltic countries, Germany, Austria, Hungary, the Czech Republic and Slovakia. In Russia and Ukraine as Fortrent (50%

• wned JV).

▪ Cramo's 2,753* employees serve over 150,000 customers

Cramo is a rental solutions provider in machinery, equipment and modular space – with a sustainable business model

A rental solutions provider

* Average number of employees

OUR BUSINESSES

▪ Our business divisions are Equipment Rental and Modular Space ▪ Equipment Rental offers tools, trading and rental related services, access equipment, site huts and construction equipment ▪ Modular Space offers rental and rental related services of modules. Demerger of Modular Spaces business, Cramo Adapteo, ongoing. Spin-off expected in Q3 2019.

Two business divisions

Modular Space Equipment Rental

2018 A year of good performance

CRAMO GROUP

YEAR IN BRIEF

2018 – A year of continued good performance

▪ Solid growth in sales and EBITA ▪ Acquisitions in both businesses ▪ Successful performance improvement in Modular Space business ▪ Focus on digitalisation, innovation, sustainability and people development bolstered good performance

6.1%

ORGANIC SALES GROWTH

15.7%

COMPARABLE ROE

16.7%

COMPARABLE EBITA MARGIN

9.5

LTIR* * LTIR (Lost time injury rate) = Number of work-related accidents with at least one full day absence/million working hours

STRONG HISTORY OF GROWTH AND PROFITABILITY

657 652 668 712 729 780

10.0% 11.2% 13.0% 15.6% 16.5% 16.7%

0% 2% 4% 6% 8% 10% 12% 14% 16% 18%

550 600 650 700 750 800 2013 2014 2015 2016 2017 2018

Sales Comparable EBITA margin

Sales (MEUR) Comparable EBITA margin

Key events

• f 2018

▪ Acquisition of KBS Infra GmbH, German construction site logistics company, strengthened Cramo’s Equipment Rental business position in Central Europe with extensive construction site planning and logistics ▪ Acquisition of Nordic Modular Group Holding AB, Swedish-based modular space company, strengthened Cramo’s Modular Space business position on the Nordic market by providing in-house development and production capabilities ▪ Cramo was awarded the European Rental Association’s (ERA) Sustainability Committee Award 2018 and European CEO’s Best CEO in the Sustainable Rental Equipment Industry 2018 ▪ Cramo launched a Building information modelling (BIM) service as of the first players in the rental business

CRAMO GROUP

Year 2 of Shape and Share strategy

CRAMO GROUP

OUR STRATEGY

Creating value by simplifying the sharing

• f resources

Align

• Implementing Group-wide processes and tools
• Living the Cramo Story
• Establishing the renewed Cramo Care

Growth

• Building a new footprint in chosen markets
• Targeting organic and inorganic growth
• Continuously evaluating potential acquisiti-
• n target companies and striving for a leading

position in chosen markets

Optimise

• Shaping the business structure and model
• Enhancing the performance culture
• Creating a new digital concept
• Striving for zero accidents

STRATEGIC STEPS 2017-2020

CRAMO GROUP

CRAMO CRAMO

SEIZING OPPORTUNITIES IN A CHANGING WORLD

Sharing Digitalisation Migration Urbanisation Demographic changes Scarcity of resources

MEGATRENDS DRIVERS

Sustainable development economy Sharing economy

DRIVING INNOVATION

Game-changing offerings Equipment rental

▪ Digital rental platform ▪ BIM service ▪ Digital fleet management ▪ Dry chain rental service ▪ Maintenance break cycle management tool ▪ Product Viewer digital app for data and documents ▪ MyEquip mobile app to manage rental fleet ▪ IoT for rental equipment management

Modular space

▪ Pilots with solar panels as energy source for rental modules ▪ Smart Energy solution to save energy in heating and lightning

• f modular space

Digitalisation has

• pened up new ways

for us to further simplify professional sharing and to develop innovative, game- changing solutions and services

CRAMO PROVIDES 3 GREAT DIGITAL TOOLS

E-commerce and customer portal

RENT, MANAGE AND RETURN EQUIPMENT ONLINE

Product viewer

FOR PRODUCT DATA AND DOCUMENTS

MyEquip

DESIGNED FOR ON-SITE RENTAL MANAGEMENT ▪ Optimised for desktop mobile and tablet ▪ Search equipment and product data ▪ Check product availability ▪ Rent for selected jobsite ▪ Choose between transport and pick-up ▪ Manage rentals and view rental details at each jobsite ▪ Order return transportation ▪ Check invoices ▪ View rental dashboards and export data ▪ Manage equipment and material on rent, not only products from Cramo ▪ Get information if equipment is returned ▪ Easily communicate picklists with colleagues or with Cramo when a return is needed ▪ Operate with Cramo after office hours ▪ Scan the product number on the machine or input it

• manually. The app shows data for each unique machine

▪ Examine vital product info such as measurements, power supply, noise, vibration etc. ▪ Access user manuals ▪ View all PSI-documents gathered in one place

DIGITAL CHANGE LEADERS

Changing the way our industry interacts

Digitalisation is one of the single most important enablers of more effi- cient and easily accessible sharing ▪ 24/7 access to Equipment Rental services and solutions ▪ Fleet management tool ▪ Browse, compare, order and return ▪ Safety and user manuals ▪ MyEquip -app ▪ Product Viewer –app

WE ARE SHAPERS OUR NEW PEOPLE STRATEGY

WE ARE SHAPERS Our new people strategy

CRAMO GROUP

WE ARE SHAPERS

Shaping our industry, our business and our own future

We are shaping our industry

We have the ambition to take our company and our industry to the next

• level. We find new ways to exceed our

customers’ expectations.

Focus on people

We are on a journey of

• growth. To reach our full

potential we focus on developing our people.

Passion for improvement

We have an open atmosphere. Everyone can influence the future of Cramo and can contribute with new ideas.

www.cramogroup.com/career

“For me, it’s important that Cramo is an attractive employer, both for you who already work here and for you who might join us in the future. I strongly believe that we need to continue to focus on developing our people – to have high engagement and reach our company goals.” Petra Schedin Stergel, SVP HRD

Financial and non-financial targets and outcomes

CRAMO GROUP

SOLID GROWTH CONTINUED

Organic sales growth 6.1% in 2018 vs 2017 Comparable EBITA improved to EUR 130.1 million (EUR 120.0) Comparable EBITA margin was 16.7% (16.5%) Comparable EPS grew to EUR 2.05 (1.87) Comparable ROE increased to 15.7% (15.4%)

ALL GROUP LEVEL FINANCIAL TARGETS ACHIEVED

>15%

Target

15.7%

Outcome

<3

Target

2.88

Outcome

Comparable return on equity [ROE] Net debt / EBITDA

CRAMO GROUP

>Market1

Target

5.4%

Outcome

>14.5%

Target

>14.4%

Outcome

Organic sales growth2 Comparable ROCE4

EQUIPMENT RENTAL BUSINESS DIVISION

Double digit

Target

14.6%

Outcome

>12.5%

Target

8.8%

Outcome

Organic rental sales growth3 Comparable ROCE4

MODULAR SPACE BUSINESS DIVISION

Financial targets 2017 – 2020 and outcomes 2018 (2017)

1 According to ERA, in the markets where Cramo is present 2 Organic sales growth excludes the impact of acquisitions, divestments and exchange rate changes 3 Organic rental sales growth excludes the impact of acquisitions, divestments and exchange rates 4 Cramo changed the calculation method of ROCE’s capital employed component into 12 months average in 2018 reporting period

NON-FINANCIAL TARGET FOR CUSTOMER SATISFACTION ACHIEVED

Non-financial targets 2017 – 2020 and outcomes 2018 (2017)

>70

Target

75

Outcome

≤5

Target

9.5

Outcome

Customer satisfaction index LTIR1

CUSTOMER CARE

Target

1

Outcome

• 20%

Target

15.6

Outcome

Legal proceedings2 CO2e emissions, scope 1 and 2, relative to sales, tonnes/MEUR

SOCIAL CARE EMPLOYEE CARE ENVIRONMENTAL CARE

1 LTIR (Lost time injury rate) = Number of work-related accidents with at least one full day absence/million working hours 2 Number of legal proceedings regarding human rights and corruption

EQUIPMENT RENTAL

In 2018, demand developed favourable and sales grew

MODULAR SPACE

Modular Space 2018 (2017)

• Sales MEUR 151.5 (126.5)
• Comparable EBITA MEUR 36.8

(28.8)

• Comparable ROCE 8.8% (9.1%)
• Operations in Finland, Sweden,

Norway, Denmark, Estonia, Lithuania and Germany. Performance improvement actions produced strong results

Norway Sweden Finland Estonia Lithuania Germany Denmark

DIVIDEND DEVELOPMENT

Target: stable profit distribution policy with about 40% of earnings per share paid as a dividend

Shaping from inside

• ut

EQUIPMENT RENTAL

EQUIPMENT RENTAL

Shaping from inside out

Equipment and solutions We offer any type of construction equipment for any type of construction project. Construction productivity We offer services that improve productivity, such as on-site logistic solutions and concepts for optimizing work productivity. Construction safety We offer services to improve safety, such as online instructions, monitoring, training and concepts for working in dusty environment and carbon-free work-sites. Construction sustainability We offer services that provide improved sustainability, such as smart concepts for saving energy on construction sites.

EQUIPMENT RENTAL

Stable market growth The estimated rental market size in the countries where the Equipment Rental division operates totalled about EUR 8.8 billion in 2017. Based

• n market studies the market is

expected to grow annually by approximately 4% during 2017– 2020.

Market size estimate 2018 BEUR1 Market position estimate 20181 Market CAGR 2017 – 2023, %1

Finland 0.5 #2 4.4 Sweden 1.7 #1 2.4 Norway 0.8 #4 3.7 Central Europe2 5.0 #4, #24 3.8 Eastern Europe3 0.8 #1, #35 5.6

Market overview and our position

1 Management estimate based on ERA European Rental Industry 2018 Market Report and Forecon estimates, January 2019 2 Germany, Austria, Czech Republic and Slovakia 3 Estonia, Lithuania and Poland 4 #4 total rental provider in Germany, #2 in Austria and one of the leading rental companies in Czech Republic and Slovakia 5 #1 in the Baltics and #3 in Poland

EQUIPMENT RENTAL

KBS Infra acquisition expands service offering in Central Europe

▪ Cramo acquired a high-quality construction site logistics company in January 2018 ▪ Four new sites in Germany with some 180 employees ▪ Sales in 2017 some EUR 32 million ▪ Answer demand of offering logistics solutions up front to construction customers in densely built city centres ▪ Positive contribution to Central Europe profit and profitability

EQUIPMENT RENTAL

Demand for rental equipment is affected by construction and renovation volumes

▪ We offer fleet management tools that help construction customers save costs while optimising availability of appropriate machinery and services right when they are needed

Sharing machines Easy 24/7 rental

Customer case: Managing fleet and saving time easily Continuous evolution of digital services

Aiming higher after a successful uplift

MODULAR SPACE

MODULAR SPACE

Aiming higher after a successful uplift

In-house R&D for continuous development of customer-centered solutions. Manufacturing of modules for renting and for sale partly in our

• wn production unit.

Analysing customer needs and designing the optimal solutions together. Transport of modules and assembly

• f temporary space solutions rented
• r bought by the customer.

Solutions for short-term and long-term rental periods, maintenance and other services available during renting. Disassembly of the temporary space solution, site restoration and off-site transport.

MODULAR SPACE

Performance improvement actions produced strong results The rental modular space market size in the countries Cramo Adapteo

• perates in totalled about EUR 1.4

billion in 2018. Market is forecasted to grow about 9% p.a. reaching EUR 2.2 billion in 2023. In 2018, strong market growth continued in the public sector, especially in school and daycare segments.

Market size estimate 2018 MEUR1 Market position estimate 20181 Market CAGR 2017 – 2023, %1

Finland ~145 #2 ≥ 10 Sweden ~290 #1 5 – 10 Norway ~110 #3 5 – 10 Denmark ~125 #2 ≥ 10 Germany ~750 #12 5 – 10

Market overview and our position

1 Market studies

MODULAR SPACE

Nordic Modular Group acquisition strengthens Cramo’s market position

▪ Cramo acquired in-house development and production of modular buildings in October 2018 ▪ Strengthens position in Sweden, Norway, Denmark and Finland ▪ Fleet consist of some 6,500 modules ▪ Expands Cramo’s offering to customised modular buildings for long-term rental needs, meaning rental periods of five years or more, and permanent modular buildings for sale ▪ Enables growth in Central Europe, both

• rganically and through acquisitions

MODULAR SPACE

Demerger of Cramo’s Modular Space business, Adapteo

The Board of Directors of Cramo has decided to pursue a spin-off of the company’s Modular Space business to Cramo’s existing shareholders The separate listing (Nasdaq Stockholm)

• f Adapteo is expected to take place latest

in the third quarter of 2019 Cramo will continue as a listed entity on Nasdaq Helsinki and each Cramo shareholder will receive one (1) Adapteo share for each Cramo share they hold Adapteo will be domiciled in Finland, will be a Finnish company and report in EUR

Creating two stand-alone companies that can grow stronger separately Growth ▪ Increase opportunity to optimize

• perational efficiency and create

value Competitive strength ▪ Increase competitiveness through specialization ▪ More focused management for separate companies Financial clarity ▪ Two clear investment options with different risk and growth profiles

MODULAR SPACE

Drivers affecting demand

▪ Market megatrend drivers for next 4 years: ▪ Renovation needs ▪ A sudden drop in space ▪ Demographic changes and migration ▪ Modular space rental concept penetration ▪ Increasing new building volumes

Modular spaces for demanding end uses

Customer case: Modular space building, perfect for a school

Modules move from one building to another

Our strategic approach to sustainability

CRAMO CARE

CRAMO CARE

Our strategy for integrating sustainability into all parts of our business

Cramo Care is our strategy for integrating sustainability, step by step, into all parts of our business and is based on Cramo’s values Credibility, Creativity and Commitment. Our ambition is to lead the way in advancing sustainability in the rental industry and to meet the requirements of our stakeholders and of internationally agreed standards.

Sustainability Growth Risk management Return on capital Customer care Customer satisfaction Health and safety Resource efficiency Business ethics Responsible suppliers Environmental care Resource efficiency Reduced environmental footprint Increased circularity Employee care Employee satisfaction Health and safety Skills development Diversity and equality Social care Local engagement Business ethics

CUSTOMER CARE

Strategic target: Most satisfied customers in the industry

Strategic target Target Outcome 2018 Outcome 2017 Outcome 2016 Status Most satisfied customers in the industry CSI* steady

• ver 70

75 73 72 Excellent progress / Target achieved

*CSI, Customer Satisfaction Index, all units, weighted average.

Priority will be given at all times to our customers’ key concerns – safety at construction sites, resource efficiency and strong business ethics. Cramo contributes to our customers’ success by enabling them to provide safe working environments, reduce their energy usage, limit their climate impact and minimise waste. An active dialogue and collaboration with our customers and other stakeholders are key to the further development of sustainable rental solutions.

EMPLOYEE CARE

Cramo offers safe, stimulating workplaces for all our employees, where men and women of different ages and backgrounds have the same opportunities for development. We aspire to provide a stimulating environment for professional and personal development. A systematic and preventative approach to safety should always be the highest priority. Strategic target: Zero accidents

Strategic target Target Outcome 2018 Outcome 2017 Outcome 2016 Status Zero accidents <5 LTIR* by 2020 9.5 9.9 13.7 On-going – on track

*Number of work-related accidents with at least one full day absence/million working hours.

ENVIRONMENTAL CARE

Strategic target: Zero emissions Cramo is focused on being the most climate- and resource-efficient rental solutions company. We will work continuously to mitigate our climate impact by reducing energy use and emissions, switching to fossil-free energy sources, reducing and recycling materials, reducing waste and handling hazardous waste properly. We take a precautionary approach to environmental considerations in procurement decisions and the selection of suppliers as well as in our customer dialogues.

Strategic target Target Outcome 2018 Outcome 2017 Outcome 2016 Status Zero emissions* <15 tonnes*/MEUR by 2020 (equals >20% decrease vs 2016) 15.6 tonnes/MEUR 17.5 tonnes/MEUR 18.4 tonnes/MEUR On-going –

• n track

*CO2e emissions, scope 1 and 2 (relative to sales). A market-based method is used to calculate CO2e emissions from electricity.

SOCIAL CARE

Strategic target: Top ranking in business ethics Cramo aims to be a responsible corporate citizen, contributing to a sustainable future and generating value for all our stakeholders and for society. We endeavour to take an active role in the communities we operate in and encourage

• ur employees to contribute to local charity projects.

Strategic target Target Outcome 2018 Outcome 2017 Outcome 2016 Status Top ranking in business ethics 0 legal proceedings (human rights, corruption, environment) 1 On-going – not on track

Why invest in Cramo?

CRAMO GROUP

Modular Space demerger: The Board

• f Directors has decided

to pursue a spin-off of the company’s Modular Space business to Cramo’s existing share- holders.

Why invest in Cramo?

Strong brand and market position Shape and Share strategy for sustainable growth and profitability Stable dividend payer Growing markets driven by megatrends Leading the digital revolution in equipment rental Focus on people and

• n enabling them to

perform

OUTLOOK FOR 2019

Shape and Share

Equipment Rental 2019 rental market outlook remains still positive despite increased economic uncertainties ▪ In Sweden and Finland, the rental market still shows growth due to growth outside new residential building construction ▪ In the Eastern European countries market growth is expected to remain strong. Modular Space outlook for the rental market development is positive for 2019; ▪ +10% growth is expected for Finland and Denmark ▪ 5-10% for Sweden, Norway and Germany

Cramo online

www.cramo.com www.cramogroup.com

Cramo social media

www.facebook.com/cramogroup www.twitter.com/cramogroup www.linkedin.com/company/cramo-group www.youtube.com/cramogroup www.instagram.com/cramogroup

Media Gunilla Hellström gunilla.hellstrom@cramo.com

Contacts

CRAMO GROUP MANAGEMENT TEAM

Management team in order of appearance from top left: Aku Rumpunen, CFO Mika Kouhi, SVP M&A and Corporate Development Martin Holmgren, SVP Fleet Management Philip Isell Lind af Hageby, EVP Modular Space Petra Schedin Stergel, SVP Human Resource Development Hartwig Finger, EVP Central Europe Tatu Hauhio, EVP Finland and Eastern Europe Sohana Josefsson, SVP Communications and Marketing

Leif Gustafsson President and CEO