Ramirent Plc Half Year Financial Report July 31, 2019 at 9:00 EEST
April-June 2019 in brief
– Net sales EUR 170.6 (177.0) million, down by -3.6% or −2.4% at comparable exchange rates
– EBITDA EUR 50.3 (52.2) million or 29.5% (29.5%) of net sales
– Comparable EBIT EUR 20.3 (26.2) million or 11.9% (14.8%) of net sales
– EBIT EUR 16.4 (26.2) million or 9.6% (14.8%) of net sales
– Comparable EPS EUR 0.14 (0.18)
– Earnings per share (EPS) EUR 0.09 (0.18)
– Ramirent announced the acquisition of Stavdal AB, which was completed after the review period on July 1, 2019.
– Loxam S.A.S. assumed title of 96.25 percent of all outstanding Ramirent shares in a voluntary public cash tender offer that ended on July 18, 2019 and will initiate measures to delist the Ramirent shares from Nasdaq Helsinki Ltd.
January-June 2019 in brief
– Net sales EUR 333.6 (344.5) million, down by -3.1% or -1.5% at comparable exchange rates
– EBITDA EUR 99.4 (99.1) million or 29.8% (28.8%) of net sales
– Comparable EBIT EUR 37.6 (47.4) million or 11.3% (13.8%) of net sales
– EBIT EUR 33.5 (47.4) million or 10.1% (13.8%) of net sales
– Comparable EPS EUR 0.25 (0.31)
– Earnings per share (EPS) EUR 0.21 (0.32)
– Comparable ROCE 14.2% (16.5%)
– ROCE 7.7% (15.8%)
– Gross capital expenditure EUR 111.9 (110.7) million
– Cash flow after investments EUR -4.4 (-23.1) million
Loxam’s public tender offer for all Ramirent shares
On June 10, 2019 Loxam S.A.S. announced it would make a voluntary recommended public cash tender offer to purchase all of the issued and outstanding shares in Ramirent. The Board of Directors of Ramirent represented by a quorum formed by the conflict free board members unanimously decided to recommend that the shareholders of Ramirent accept the tender offer for a cash consideration of EUR 9.00 for each share. On July 23, 2019 Loxam declared the tender offer unconditional as the shares tendered in the tender offer, according to the final results, represent 96.25 percent of all the outstanding shares in Ramirent Plc. In order to allow the remaining shareholders the possibility to accept the tender offer, Loxam initiated on July 24, 2019 a subsequent offer period that will expire on August 8, 2019. As Loxam’s ownership, after completion of the tender offer, exceeds 90 percent of all the shares and voting rights in Ramirent, Loxam announced that it will initiate compulsory redemption proceedings for the remaining Ramirent shares under the Finnish Companies Act and will in due course also initiate measures to delist the Ramirent shares from Nasdaq Helsinki Ltd.
Ramirent’s guidance for 2019 unchanged
In 2019, Ramirent’s comparable EBIT is expected to be at approximately the same level as in 2018.
Market outlook for 2019
Ramirent’s market outlook is based on the available forecasts disclosed by local construction and industry associations in its operating countries. The demand outlook for equipment rental in 2019 varies somewhat across Ramirent’s geographies. In Sweden, the market demand is expected to slow down in 2019, even though there are expected to be differences between regions. In Finland, market conditions are expected to be stable. In Norway, the Baltic countries, Poland, Czech Republic and Slovakia, market conditions are expected to remain favorable.
| Key figures (MEUR) | 4−6/19 | 4−6/18 | Change | 1−6/19 | 1−6/18 | Change | 1−12/18 |
| Continuing operations | |||||||
| Net sales | 170.6 | 177.0 | -3.6% | 333.6 | 344.5 | -3.1% | 711.7 |
| EBITDA | 50.3 | 52.2 | -3.8% | 99.4 | 99.1 | 0.3% | 202.9 |
| % of net sales | 29.5% | 29.5% | 29.8% | 28.8% | 28.5% | ||
| Comparable EBIT | 20.3 | 26.2 | -22.6% | 37.6 | 47.4 | -20.7% | 106.8 |
| % of net sales | 11.9% | 14.8% | 11.3% | 13.8% | 15.0% | ||
| EBIT | 16.4 | 26.2 | -37.2% | 33.5 | 47.4 | -29.2% | 66.9 |
| % of net sales | 9.6% | 14.8% | 10.1% | 13.8% | 9.4% | ||
| Comparable EPS, EUR | 0.14 | 0.18 | -22.0% | 0.25 | 0.31 | -20.8% | 0.74 |
| Comparable ROCE, % | 14.2% | 16.5% | 16.8% | ||||
| Comparable ROE, % | 25.3% | 26.7% | 26.7% | ||||
| Group including discontinued operations | |||||||
| EPS, EUR | 0.09 | 0.18 | -52.9% | 0.21 | 0.32 | -34.8% | 0.44 |
| ROCE, % | 7.7% | 15.8% | 10.2% | ||||
| ROE, % | 12.9% | 26.9% | 16.6% | ||||
| Gross capital expenditure | 68.6 | 57.4 | 19.5% | 111.9 | 110.7 | 1.1% | 199.5 |
| Cash flow after investments | -36.4 | -9.5 | n/a | -4.4 | -23.1 | 81.1% | 40.7 |
| Capital employed | 764.0 | 677.7 | 12.7% | 653.7 | |||
| Net debt | 489.8 | 390.6 | 25.4% | 350.6 | |||
| Net debt to EBITDA ratio | 2.4x | 1.8x | 30.9% | 1.7x | |||
| Net debt excluding lease liabilities | 396.7 | 390.6 | 1.5% | 350.6 |
Ramirent’s President and CEO Tapio Kolunsarka:
Our performance in the second quarter was two-fold. Market conditions, as well as our profitability, remained solid in Finland, Norway and Eastern Europe, whereas in Sweden, we saw continued weak demand and our profitability was consequently low. For the quarter, our growth was −2.4% at comparable exchange rates, affected also by fewer rental days in the quarter. Our second-quarter comparable EBIT decreased to EUR 20.3 (26.2) million, representing 11.9% (14.8%) of net sales. Comparable ROCE was 14.2% (16.5%). Despite the decline in segment Sweden, it is noteworthy that our comparable EBIT in Q2 was higher than in Q2 2017, which signals the strength of our underlying geographical mix.
In Sweden, sales and EBIT decreased due to slow sales in larger non-residential projects, the divestment of the Temporary Space business as well as due to demand decline in the residential sector in the Stockholm region. Our underlying rental sales decreased by high single-digit percentages, affected by fewer working days in the quarter. Despite the negative sales trend in first half of 2019, our sales pipeline of new projects remains still active and our view of the medium-term development of the market remains optimistic. After the review period, we completed the acquisition of Stavdal AB. Based on Stavdal’s solid first half-year performance, the acquisition is estimated to be accretive to our profitability in the second half of 2019.
In Finland, I am proud of our team’s accomplishments as strong sales development continued and profitability improved despite tough price competition. In Norway, the sales development was stable and profitability improvement continued. In Eastern Europe, the performance was stable although affected by increasing price competition in some markets.
During the quarter, we also successfully continued to pursue our other key strategic targets. I am proud that our rolling 12 months’ accident frequency (LTIFR) reached a record low level of 5.2 (9.2), which is very close to our long-term target of being below 5.
For the second half of the year, we focus on generating strong cash flow enabled by clearly lower investments and improved working capital management. We will also focus on improving our performance in Sweden, where the market conditions are in the short-term weaker than we anticipated. Helped by the Stavdal acquisition, we have unique opportunities to raise our competitiveness to new levels and create a new market leader in Sweden. In our other markets, we continue to pursue profit improvement as the market conditions are expected to remain favorable.
Going forward, Ramirent will, as a result of the successful tender offer, be delisted and transfer under the ownership of Loxam. Loxam possesses a long-term track record of strong growth, and with our exceptionally engaged employees, I am confident that Ramirent has the possibility to further accelerate its growth and development adding an important Nordic and Eastern European dimension to Loxam's international presence. I want to thank all our colleagues for their tireless commitment in improving Ramirent’s performance in the past years. I also wish to extend a special thank you to all of Ramirent’s shareholders over the years, who have believed in us during the past two decades of being a publicly listed company.
The financial information in this stock exchange release has not been audited.
Information
Jukka Havia, Chief Financial Officer (CFO), tel. +358 50 355 3757, jukka.havia(at)ramirent.com
Franciska Janzon, SVP, Marketing, Communications, IR, tel. +358 20 750 2859, franciska.janzon(at)ramirent.com
RAMIRENT is a leading service company offering equipment rental for construction and other industries. Our mission is to help our customers gear up on safety and efficiency by delivering great equipment and smooth service with a smile. We have 2,900 co-workers at 290 customer centers across nine countries in Northern and Eastern Europe. In 2018, Ramirent Group sales reached a total of EUR 712 million. Ramirent is listed on the Nasdaq Helsinki (RAMI).
Ramirent – Gear Up. Equipment rental at your service
Distribution: NASDAQ OMX Helsinki, main news media, www.ramirent.com
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