Europe’s Cramo Reports Fourth Quarter and Full Year Profit and Revenue Increases
Cramo, Europe’s second largest rental company, posted €196.7 million in fourth quarter revenue compared to €192.9 million in the fourth quarter of 2016, a 2-percent increase. In local currencies sales grew by 2.7 percent. Organic sales growth was 6.3 percent. EBITA for the quarter was €32.7 million compared to €28.2 million in the year ago quarter, or 16.6 percent of sales.
For the full year, Cramo reported sales of €729.5 million compared to €712.3 in 2016, a 2.4-percent hike. In local currencies, sales grew 3.3 percent. Organic sales climbed 4.6 percent. Sales growth was diluted by the divestment of Danish equipment rental operations and Latvian and Kaliningrad operations in Aug. 2017. Equipment Rental Scandinavia, Equipment Rental Finland and Eastern Europe and Modular Space contributed especially positively to the group’s organic sales growth.
Cramo Group’s full-year comparable EBITA was €120 million compared to €111.1 million in 2016, an increase of 8.1 percent.
“2017 was the first year executing Cramo’s new Shape and Share strategy and we took many large steps towards our vision,” said Cramo CEO Leif Gustafsson. “In the beginning of the year, we divided our operations into two stand-alone business divisions, Equipment Rental and Modular Space. As the synergies between the businesses are limited, we decided to further investigate and assess the potential separation of the Modular Space business. The assessment of different strategic alternatives will be carried out during 2018. In 2017, we also executed several transactions following the new strategy and aiming towards a leading position in all Cramo markets. After the fourth quarter, we announced the acquisition of KBS Infra Group, which will strengthen our market position in an important German market. The acquisition is expected to close during the first quarter of 2018 and to be EPS-accretive already in 2018.
“Equipment Rental division’s full-year result was strong driven by good market demand; organic sales increased by 4 percent and comparable EBITA improved by 13.2 percent.”
Gustafsson said he expects both the Modular Space and Equipment Rental to do well in 2018.
The construction market outlook for 2018 is mainly positive in Cramo’s operating countries. Estimates for the Czech Republic, Slovakia, Hungary and Poland are an average of 9.3 percent market growth, with the Baltic states rising 3.4 percent and the Russian construction market by 5 percent.
The company said that Cramo and Ramirent are exploring strategic options for their Russia and Ukraine-based joint venture company Fortrent. Also Cramo and the European Investment Bank signed a €50 million long-term loan agreement to back Cramo’s European growth strategy.
Cramo is based in Vantaa, Finland.
About the Author
Michael Roth
Editor
Michael Roth has covered the equipment rental industry full time for RER since 1989 and has served as the magazine’s editor in chief since 1994. He has nearly 30 years experience as a professional journalist. Roth has visited hundreds of rental centers and industry manufacturers, written hundreds of feature stories for RER and thousands of news stories for the magazine and its electronic newsletter RER Reports. Roth has interviewed leading executives for most of the industry’s largest rental companies and manufacturers as well as hundreds of smaller independent companies. He has visited with and reported on rental companies and manufacturers in Europe, Central America and Asia as well as Mexico, Canada and the United States. Roth was co-founder of RER Reports, the industry’s first weekly newsletter, which began as a fax newsletter in 1996, and later became an online newsletter. Roth has spoken at conventions sponsored by the American Rental Association, Associated Equipment Distributors, California Rental Association and other industry events and has spoken before industry groups in several countries. He lives and works in Los Angeles when he’s not traveling to cover industry events.