CRAMO PLC...The company operates under the Cramo brand in all its operating countries and in Russia...
23
March 2015 / 1 FOR A GREAT DAY AT WORK Threats and opportunities in digitalization CRAMO PLC CEO Leif Gustafsson SEB Nordic Seminar 10th of Jan 2017
Transcript of CRAMO PLC...The company operates under the Cramo brand in all its operating countries and in Russia...
March 2015 / 1
FOR A GREAT DAY AT WORK
Threats and
opportunities in
digitalization
CRAMO PLC CEO Leif Gustafsson
SEB Nordic
Seminar10th of Jan 2017
March 2015 / 2
FOR A GREAT DAY AT WORK
Cramo in
brief
Cramo in briefA leading European equipment rental service company
Russia
Denmark
GermanyPoland
CzechRepublic
Austria Hungary
Slovakia
Ukraine
Belarus
Lithuania
Latvia
Estonia
Norway
Sweden
Finland
Romania
Moldova
Bulgaria
Slovenia
Croatia
Bosnia and
HerzegovinaSerbia
Macedonia
Albania
Kalinin-
grad
Cramo is the second largest equipment rental service companies in
Europe, with operations in 15 countries and 2015 sales of EUR 668
million
Cramo is also the no.1 player in both construction and non-
construction modular space in the Nordic countries
In 2015, Cramo posted EBITA before NRIs of EUR 86.8 million
(13.0% of sales)
The company operates under the Cramo brand in all its operating
countries and in Russia and Ukraine under the Fortrent brand
(50%-owned joint venture)
In addition to its strong market position and brand, Cramo’s key
strengths are its extensive rental concept combined with a flexible
business model and operational efficiency
Cramo's approx. 2,500 employees serve over 150,000 customers
Cramo was founded in 1953 and it is listed on the Helsinki Stock
Exchange
2015 sales by business segment
54 %
25 %
15 %
2 %4%Construction industry
Other industry
Public sector
Households
Other
25 %
18 %
10 %10 %
21%
15,0 % Equipment rental: Tools rental
Equipment rental: AccessrentalEquipment rental:Constructionecq. rentalEquipment rental: Site hutsrentalEquipment rental: Rentalrelated and other servicesModular space: Rental andservices
* For modular space product area, sales include rental and rental related sales. For equipment rental, rental sales allocated to product areas
17 %
49 %
10 %
4 %
12%
8%Finland
Sweden
Norway
Denmark
Central Europe
Eastern Europe
2015 sales by industry segment 2015 sales by product group*
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Outsourcing - Increasing
rental penetration
Growth in rental-
related services
Switch from manpower
to machine
Growth in renovation
construction in mature
construction markets
MEGATRENDS
Migration
Urbanisation
Ageing
Globalisation
Digitalisation
Sustainability
Environmental and
climate awareness
Increased energy
efficiency
requirements
Accelerating technological
development
Global and local
demographic changes
More stringent
environmental laws and
international agreements
to mitigate climate change
SOCIETY PUBLIC SECTOR CONSTRUCTION OTHER INDUSTRIES
Growth in new services and
solutions
Growth of rental and
modular space in new
sectors
Increasing rental
penetration, outsourcing
Internet of things, intelligent
life-cycle follow-up
Multichannel connectivity
with customers
EQUIPMENT
RENTAL
DRIVERS
MODULAR
SPACE GROWTH
DRIVERS
Economic benefits,
change in mindset
Greater preference
for total solutions
Need to improve
productivity
Quality problems
(mold and moisture)
in construction
Ageing of buildings
Dynamic, changing
environment
creates demand
Site-specific space needs
during renovation periods
Fluctuating space needs:
daycares, schools,
accommodation
End users increasingly require
permanent-like quality
Need for energy-efficient
solutions
Underlying drivers support propensity to rentCramo well positioned to benefit from the changing environment
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200
300
400
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600
700
800
900
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15 %
21 %
11 %
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Total market breakdown(2015 industry rental
turnover, BEUR)
Overall European marketRental operators in the European equipment rental market
European Rental market operators 2015Cramo is #2 in Europe
Source: European Rental Association, The European Equipment Rental Industry 2015 Report, November 2015; ERA Convention, June
2016 and International Rental News, June 2016
> 500 MEUR, n=4
> 250 MEUR, n=17
Top 4 players
Top 5-17 players
Top 18-49 players
<50 MEUR
revenue
> 100 MEUR, n=30
~23.4 BEUR
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Financial
highlights
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1 July – 30 September 2016
Sales grew by 7.2% to EUR 184.8
(172.4) million (7.9 % in local
currencies)
EBITA EUR 38.9 (30.2) million, margin
21.1% (17.5%)
Earnings per share EUR 0.64 (0.43)
1 January – 30 September 2016
Sales grew by 8.0% to EUR 519.4
(480.7) million (8.8 % in local
currencies)
EBITA EUR 78.5 (58.7) million, margin
15.1% (12.2%)
Earnings per share EUR 1.20 (0.75)
Return on equity 14.5%
Financial highlights of Q3 and Jan-Sep 2016Profitable growth continued
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Cramo
Equipment
Rental
The Cramo Rental ConceptMore than
220,000
rental items
A wide range of rental-related
SERVICES
ranging from different site services, such as
proactive site monitoring, construction site
logistics, dust-control and weather-sheltering, to
safety-related services, equipment and training.
INDUSTRIAL PROJECTS
including infrastructure, offshore and mining.
Tailor-made total
RENTAL SOLUTIONS
for more efficient, safe and environmentally
sound construction projects.
MODULAR SPACE
SOLUTIONS
matching the standards
of permanent structures
from classrooms and
daycare facilities to
high-tech offices and
accommodation.
SITE HUTS
adaptable for
various purposes
and capacity needs.
COMPREHENSIVE
RANGE OF TOOLS
and complete package
solutions in building
equipment.
Modern,
comprehensive fleet of
CONSTRUCTION
EQUIPMENT
for any type of assignments,
from major road projects to
small-scale jobs.
ACCESS
EQUIPMENT
with comprehensive
safety solutions for
working at heights.
Over
150,000
customers
9
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Cramo
Modular Space
Rental
11
Cramo AdapteoTemporary space needs
Schools Day care
Office space Accommodation
Cramo rebranded its high
quality modular space
operations as Cramo Adapteo
in early 2014
Adapteo’s main customer
group is the public sector.
Industrial companies and large
projects also important
Modular space is an important
growth area for the Cramo
Group
Temporary need
Site-specific
Initial need often for 2-3 years, but contracts typically
extended up to 5 years
Competitive solutions especially for site-specific space need
(e.g. schools)
The Cramo Adapteo modular space conceptFlexible solutions for wide array of temporary space needs
12
Cramo Modular SpaceTemporary space needs
Modular space provides stability and visibilityFlexible solutions for a wide array of temporary space needs
Schools &
Daycare
Offices
Accommodation
Share of group (2015)
Steady cash flow with a
significant contribution to
group profitability
Key focus segment in
investments and an
important growth area for
the group
Highlights
Main customer group is the public sector, providing diversification benefits
Long contract length: initial need often for 2-3 years, but contracts typically
extended up to 5 years
35%
24%
15%
EBITASales EBITDA
Capital
employed
28%
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Cramo
Digitalization
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Digital services and features have already
changed how we work and affected all
aspects of our free time
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Digital in 2017
• People are more connected than ever before and
at the same time more conscious on their time
usage
• Private persons are often ahead of companies in
their use of digital services and demands for
digitalization
• The patience for a slow loading site, unfriendly
user flow or missing digital services is lower than
ever before
• For companies digital is a great opportunity.
However for companies who ignore the need to
get digital digitalization can be a big threat.
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Digital in B2B
• B2B industry is slowly waking up to
providing digital services. Biggest
innovations are still made on B2C industry
but B2B is catching up
• By 2020 we should see a big change in
how B2B companies operate. Also the
internet of things will set new demands for
digital services
• By 2020 there will be 50 billion objects
connected to internet, that means an
average of 6,6 objects per person
• Many of our rental products will be in future
connected to Internet
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We are in the Age of the Customer
Age of
Manufacturing
Mass manufacturing
makes industrial
powerhouses
successful
• Ford
• General Electric
• Boeing
Age of Distribution
Global connections
and transportation
systems make
distribution key
• Grocery Chains
(Wal-mart, Target)
• Toyota
• IKEA
• UPS
Age of Information
Internet connects
information, supply
chains and value.
• Google Search
• Amazon
• Comcast
Age of the Customer
Empowered buyers
with full mobile access
demand a new level
of customer
obsession.
• Uber
• AirBnB
• Sunfleet
• Google Now
1900 1960 1990 2010
Evolution of Value Creation
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Digital at Cramo
• 2017 is a breaking year for
Cramo in digital development
• New digital strategy will be one
of the main priorities in our new
company strategy
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Cramo Customer Centric Program (3C Program)
A long term Business Development
Program to focus on how we shall manage
and live up to the changed customer
behavior and requirements.
Digital Solutions
Web and social media presence
e-com tool (eCrent)
Product Information Management (PIM)
Customer Centric Business Model
Segmentation, Offerings & Pricing
Production & Network
Market Presence & Customer service
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Cramo Digital value creation
Creating value to customers through e-comm
solutionsCreating value for shareholders and other
stakeholders through Group web site
Creating value by reaching and engaging with
target audiences in Social media
Creating value to employees through digital
solutions
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More about Cramo
www.cramo.com
www.cramogroup.com
www.facebook.com/Cramo.Group
www.linkedin.com/company/cramo-group
www.twitter.com/cramogroup
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Please contact us
Leif Gustafsson, President and CEO
+358 10 661 10
Aku Rumpunen, CFO
+358 10 661 12 72
Mattias Rådström, SVP Communications, Marketing and Investor
Relations
+46 70 868 70 45
mattias.rådströ[email protected]
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THANK
YOU!
