The economic operating environment is expected to weaken in 2009. The Group expects the amount of construction to fall in all Nordic countries and the Baltic countries. Construction is expected to continue to increase in Poland, in the Czech Republic and in Slovakia, although at a lower level. The outlook for new construction has also weakened in Russia, but the growing popularity of equipment rental will support demand for rental services. Continued growth is anticipated in the demand for modular space. This demand continues to be supported by relocations, demographic changes and by the need for increasingly flexible space solutions in industry and public administration.
Cramo operates in three main business sectors: construction equipment rental, equipment rental for the other industry and modular space rental. All of these business areas fall into the categories of public and private. The construction industry consists not only of residential construction, but also of non-residential construction, infrastructure construction and renovation. In spite of a general decline in construction, there are pockets of growth which Cramo intends to utilise in full.
Public spending especially in infrastructure construction is expected to grow during the year. The same is expected in renovation. With rental contracts averaging five years, the modular space business has a stabile earnings pattern.
As a result of investments made in recent years, the Group has a modern and competitive rental fleet and no investments are needed in 2009. Rather than investing in new equipment, Cramo will focus on optimising the use of its fleet on a Group-wide basis in 2009. Furthermore, the Group will continue its systematic cost adjustment measures to protect its profitability and its cash flow from operating activities in all situations. The cost reduction measures are expected to bring cost savings of at least EUR 25 million in 2009.
Many European currencies weakened in comparison to the euro at the end of 2008. If currency rates remain at the same level as in the beginning of 2009, this will have a negative impact on the Group’s figures measured in Euros in relation to the comparison figures for 2008.
In 2009, consolidated sales and EBITA margin will not reach the levels recorded in 2008. However, the Group’s cash flow after investments is expected to stay positive.