Cramo's Business Review for January-September 2019

Cramo Plc    Business Review 31 October 2019, at 9.00 am (EET)

Cramo's Business Review for January-September 2019

New strategy for equipment rental launched and execution proceeding 



* Organic (rental) sales growth excludes the impact of acquisitions, divestments, exchange rate changes and changes in IFRS standards. KBS Infra, acquired on 28 February 2018, is included in organic sales from the second quarter of 2019 onwards.



with illustrative IFRS 16 impact*Reported
with illustrative IFRS 16 impact*
7-9/197-9/18Change %1-9/191-9/18Change %2018
Comparable EBITA 1)26.531.7-16.3%53.769.0-22.1%94.8
% of sales17.2%19.9% 11.8%15.0% 15.0%
% of sales16.1%19.9% 11.5%14.8% 14.9%
Comparable profit for the period 1)16.524.2-31.7%31.147.8-34.9%61.9
Profit for the period15.324.2-36.7%29.946.9-36.2%61.3
Comparable earnings per share (EPS), EUR 1)0.370.54-31.9%0.701.07-35.0%1.39
Earnings per share (EPS), EUR0.340.54-36.8%0.671.05-36.3%1.38
Comparable operative ROCE, % 1), 2), 3)   11.6%14.4% 13.9%
Operative ROCE, % 2), 3)   11.4%14.4% 13.8%
Comparable ROCE, % 1), 2)   8.7%  10.5%
ROCE, % 2)   8.6%  10.4%
Comparable ROE, % 1), 4)   11.7%  15.3%
ROE, % 4)   11.5%  15.2%
Net debt / EBITDA   1.922.08 1.99
Net interest-bearing liabilities   399.9447.4-10.6%428.5
Gross capital expenditure (incl. acquisitions) 5)21.740.5-46.5%68.3159.1-57.0%185.1
of which acquisitions/business combinations    43.2 43.6
Cash flow after investments39.2-8.6 71.6-30.2 -8.5
Operative capital employed 3)   653.1691.8-5.6%692.9
Capital employed   832.8877.5-5.1%876.9
Total assets   965.81,030.7-6.3%1,021.7

* Presented 2018 figures with IFRS 16 impact are based on illustrative non-IFRS calculations from reported financial notes to form a comparison basis for IFRS 16 figures in 2019. These calculations have been implemented from the opening balance of 2017. Figures are non-IFRS additional financial information and are not to be considered as reported IFRS figures.
The impact of applying IFRS 16 lessee accounting is significant for the Group’s figures, especially on the balance sheet where right-of-use assets and lease liabilities were recognised since the opening balance sheet. Together with material changes between lines of income statement and impact on net profit in a single period, the impact on the Group’s KPIs such as ROCE and net debt / EBITDA was significant.

1) Excluding items affecting comparability, more information on IACs is presented on pages 15–16.

2) Cramo changed the calculation method of (operative) ROCE’s capital employed component into 12-month average in Q4/2018. The change has been applied to comparison figures. 12-month average better reflects the long-term development of capital employed compared to the previous 2-point average calculation.

3) Operative ROCE% is calculated based on EBITA (rolling 12 months) divided by the operative capital employed (12-month average). Operative capital employed is calculated by deducting goodwill and other intangible assets from the capital employed. Operative ROCE% replaces the previously presented ROCE% to better reflect the operative performance on a segment level providing a more meaningful basis for comparison.  

4) ROE% is calculated based on net result (rolling 12 months) divided by the total equity at the end of period.

5) The excluded capital expenditure for new right-of-use (RoU) assets according to IFRS 16 was EUR 9.8 million during 1-9/2019.

7-9/197-9/18Change %1-9/191-9/18Change %2018
Comparable EBITA 1)26.531.0-14.5%53.766.9-19.8%92.1
% of sales17.2%19.4% 11.8%14.6% 14.6%
% of sales16.1%19.4% 11.5%14.4% 14.4%
Comparable profit for the period 1)16.524.2-31.7%31.147.8-35.9%61.9
Profit for the period15.324.2-36.7%29.946.9-36.2%61.3
Comparable earnings per share (EPS), EUR 1)0.370.54-31.9%0.701.07-36.0%1.39
Earnings per share (EPS), EUR0.340.54-36.8%0.671.05-36.3%1.38
Average number of personnel (FTE)   2 6612 5444.6%2 546

1) Excluding items affecting comparability, more information on IACs is presented on pages 15–16.


Cramo’s third quarter was the first quarter as a stand-alone equipment rental company. The new strategy, Cramo NXT, was launched on 12 September 2019 at the Capital Markets Day. The strategy has new financial targets and works towards the Group vision of becoming the productivity partner in rental, and beyond. The strategy aims at grasping the opportunities in the market via differentiation through products, services and innovative digital solutions aimed at increasing productivity for our customers. This will be key to our success.

Cramo’s third quarter performance fell behind last year, as expected, and comparable EBITA decreased in all segments compared to last year. However, the cash flow generation was very strong during the quarter and cash flow from operating activities was EUR 16.9 million above last year. Cash flow after investments was EUR 39.2 million, being EUR 47.8 million above last year.

To improve competitiveness and profit generation going forward, we have initiated a group-wide performance enhancement programme to ensure a more streamlined cost base. The performance programme is proceeding as planned, including personnel and other operating expense reductions. The programme will be fully executed by the end of 2019 with run-rate cost savings of EUR 10-12 million, visible gradually from the fourth quarter of 2019 onwards, and in full effect in 2020.

The Group’s sales in the third quarter were slightly lower compared to last year in comparable currencies. The market environment is levelling out in many countries, which makes the sales growth and profitability improvement more challenging. In Sweden, sales decreased by 8.3% in local currency mainly due to the ending of large industrial projects with new projects being postponed until the late autumn of 2019. However, two large projects were signed during the second quarter of 2019, which will start contributing positively from the fourth quarter of 2019. In Norway, the positive trend in sales development continued, driven by good demand, increased fleet and service sales. In Finland, sales and profitability were almost on last year’s level, whereas in other Eastern European countries performance was impacted by a more challenging market environment. In Central Europe, sales were substantially higher compared to last year driven by industrial projects in KBS Infra, however profitability stayed on a non-satisfactory level.

We see many growth opportunities in our markets, particularly within selected customer segments and products areas where we have potential to increase presence and strengthen our market position. In the coming months, we will continue to execute our new strategy and finalise the cost savings programme. Cramo is a trusted brand with a strong product offering, loyal customers and highly engaged employees. This, coupled with our new strategy will leave us well prepared for the future where we will invest in growth opportunities and optimise profitability to meet the performance guidance given for 2020 that EBITA will be above EUR 75 million.


The European Rental Association (ERA) forecasts that the equipment rental market will grow in 2020 in all of Cramo’s operating countries, varying approximately between 4 to 5%, except in Poland where the growth is forecasted to be 8.2%. Forecon estimates that the equipment rental market will decrease in 2020 by 1% in Sweden and 2% in Estonia, grow in Norway by 4% and in Finland and Lithuania by 2%. 

In equipment rental, changes in demand usually follow the construction market with a delay. According to Euroconstruct June 2019 estimates, the construction market will decrease by 3% in Sweden and Finland in 2020. The Sveriges Byggindustrier is projecting that the Swedish construction market will decline by 2% in 2020 according to their latest estimate in October 2019. In Norway, the construction market is expected to grow by 2%. In Germany and Austria, growth is forecast to be -0.7% and 1.2% respectively.


Cramo Group’s consolidated sales for January–September totalled EUR 455.9 (459.5) million, showing a decrease of 0.8% (1.0% increase in local currencies). KBS Infra, acquired on 28 February 2018, supported sales growth. The impact of the exchange rate changes on sales was EUR -8.0 million, mainly due to the weaker Swedish Krona. The Group’s organic sales growth was EUR -1.8 million (-0.4%).

Sales decreased in the third quarter by 3.2% (1.9% in local currencies) and amounted to EUR 154.4 (159.6) million. Demand and market environment are levelling out in many countries, which makes sales growth more challenging. The Group’s organic sales growth for the quarter was negative and stood at -1.9%. Central Europe contributed positively to the Group’s organic sales growth mainly due to positive sales development in KBS Infra. Organic sales growth in Finland and Eastern Europe was negative. Organic sales growth in Scandinavia was poor due to modest sales development in Sweden.

Cramo Group’s comparable EBITA for January–September came to EUR 53.7 (69.0) million, showing a decrease of 22.1%. Comparable EBITA margin was 11.8% (15.0%) of sales. Profitability decreased in all segments mainly due to lower sales growth, extraordinary costs related to the organisational transformation of KBS Infra (EUR -0.8 million) in Central Europe as well as weaker Swedish Krona (EUR -1.7 million) in Scandinavia. In January–September, items affecting comparability amounted to EUR -1.3 million (see specification on IAC tables on page 14). In the comparison period, items affecting comparability amounted to EUR -0.9 million and were related to the transaction costs of KBS Infra acquisition.

Comparable EBITA for the third quarter decreased by 16.3%, totalling EUR 26.5 (31.7) million or 17.2% (19.9%) of sales. Profitability decreased in all segments but was driven by sales development in Sweden mainly due to the ending of large industrial projects with new projects being postponed until the late autumn of 2019 together with a weaker Swedish Krona. In July–September, items affecting comparability in EBITA amounted to EUR -1.6 million (see specification on IAC tables on page 14).

Finance net totalled EUR -10.6 (-8.0) million in January–September and finance net for the third quarter was EUR -4.0 (-2.4) million. Variance was especially due to IFRS 5 continuing operations principles used to restate comparison period’s reported figures and related timing impact of certain finance items between quarters in FY2018, which levels out for whole financial year.

Profit for the period totalled EUR 29.9 (46.9) million in January–September and profit for the third quarter was EUR 15.3 (24.2) million. Comparable earnings per share for January–September were EUR 0.70 (1.07) and earnings per share EUR 0.67 (1.05). The corresponding figures for the third quarter were EUR 0.37 (0.54) and EUR 0.34 (0.54) respectively. The comparable operative return on capital employed came to 11.6% and operative return on capital employed 11.4%. On 30 September 2019, net debt to EBITDA stood at 1.92 (2.08).

In January–September, cash flow from operating activities for continuing operations was a strong EUR 113.4 (88.2) million, cash flow after investments for continuing operations totalled EUR 71.6 (-30.2) million, where the comparison period figure was impacted by the acquisition of shares of KBS Infra amounting to EUR -43.2 million. IFRS 16 implementation changed the presentation of lease payment cash flows only between the lines as cash payments for the principal portion of lease liability are presented in cash flows from financing activities, thus improving both cash flow from operating activities and cash flow after investments by EUR 30.7 million respectively. In the third quarter, cash flow from operating activities for continuing operations was EUR 58.5 (41.6) million and cash flow after investments for continuing operations was EUR 39.2 (-8.6) million.

Cramo Group’s capital expenditure in January–September totalled EUR 68.3 (159.1) million, where investments decreased substantially in all segments. The impact of the acquisition of KBS Infra in capital expenditure was EUR 43.2 million in the comparison period. Cramo Group’s capital expenditure during the third quarter was EUR 21.7 (40.5) million.


Cramo will publish its Financial Statements Bulletin, Half Year Financial Report and two Business Reviews in 2020 as follows:

The Annual Report containing the full financial statements for 2019 will be published on company’s website at in week 10, 2020.

The Annual General Meeting 2020 will take place on Thursday, 26 March 2020 in Helsinki. Cramo’s Board of Directors will summon the meeting at a later date.


A conference call for analysts, investors and press will be held on 31 October at 11.00 am (EET). To participate in the conference call please dial in 5-10 minutes prior to the start time on the following number:

The conference call will be held in English. Questions can be asked after the presentation.

A replay of the conference call will be available later on the same day at


Leif Gustafsson
President and CEO

Further information:

Mr Leif Gustafsson, President and CEO, tel: +358 10 661 10, email:
Mr Aku Rumpunen, CFO, tel: +358 10 661 10, +358 40 556 3546,  email:

Nasdaq Helsinki Ltd
Main media

Cramo is one of the leading European equipment rental services companies with revenue of EUR 632 million in 2018, serving approximately 150,000 customers through around 300 depots across 11 markets with a full range of machinery, equipment and related services. Cramo enjoys solid market position in all key markets and has a strong focus on the most sophisticated customers primarily within the renovation and new-build construction, industrial and public sector end-markets. Cramo shares (CRA1V) are listed on Nasdaq Helsinki Ltd.

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