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Look to U.S. Market as Indicator of Change, Saubot Advises Europlatform

Look to U.S. Market as Indicator of Change, Saubot Advises Europlatform

Equipment manufacturers and rental businesses should anticipate the market and what competitors do to prepare for a downturn or a change of circumstances in this cyclical market, Alexandre Saubot, CEO of Haulotte, said in his keynote address at the Europlatform conference Sept. 13 in Maastricht, The Netherlands.

Saubot suggested that European manufacturers and rental companies could anticipate change by looking at the U.S. market, which often signals trends and the way global markets are heading. As risk cannot be completely mitigated, companies should aim for a strong balance sheet and a flexible business model, using the good times to prepare for the downturns, he said. Saubot also highlighted the need for the industry to create a reliable market database that can be used as a planning tool for business growth and recession.

In another presentation, former Lavendon CEO Kevin Appleton said that the access rental industry faces a challenge to attract capital in the coming years, as capital remains scarce and investors look for moderate- or low-risk opportunities. He proposed that rental companies should use Return on Capital Employed as a measure, noting that banks were looking for ROCE levels of between 3 and 7 percent, while equity finance was expecting between 10 and 25 percent.

"We need to recognize that companies that will attract capital will be those that can generate a superior return rather than just putting the money in a bank," Appleton said. He observed that the financial crisis was a result of "problems of the heart; greed — we have been stealing from the past and borrowing from the future."

Appleton predicted that companies unable to achieve acceptable rates of return would be pushed out of the industry, and that there would be opportunities to acquire distressed companies in the next three to four years. Looking forward, he said that rental companies would be likely to respond to changes in demand not by buying new equipment, but by managing the disposal of their fleet and aging equipment if necessary.

"It does require a change of model, moving flexibility to back-end disposal and not front-end acquisition," he said. "Flexibility now is about how much you dispose of rather than how much you buy."

The Europlatform conference, jointly organised by IPAF and Access International magazine brought together more than 100 attendees and expert speakers who covered topics ranging from finance to machine safety.

Peter Davis, E2E technical manager of Coates Hire, described Australian regulations, which require access platforms to undergo a major inspection every 10 years and the impact this has on fleet management in the Australian rental industry.

Loxam's financing, mergers and acquisitions specialist Maëg Videau discussed what makes successful acquisitions from the perspective of both the buyer and the seller.

Chris Wraith, IPAF technical officer, examined risk management when adding large or specialist machines to a standard fleet of booms and scissors.

Rental consultant and former Sunbelt Rental executive Charles Miller shared his expertise on how best to manage a rental sales force.

The conference ended with a panel discussion that included Wayne Lawson, IPAF president and JLG vice-president and EAME managing director, and Pierre Boels, CEO of Dutch rental company Boels Verhuur, who joined some of the other speakers to take questions from the audience.

The next Europlatform is scheduled for Sept. 20, 2012 in Edinburgh, Scotland. For more details, visit www.europlatform.info.

IPAF is a not-for-profit members’ organization that promotes the safe and effective use of powered access equipment worldwide. Members include rental companies, manufacturers, distributors and equipment owners.

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