Extract from the Stock Exchange Release published on 26 July 2018:
We delivered a good first half year result with organic sales growth of 8.6% and comparable EBITA increasing by 13.9% to EUR 54.1 million. The market environment has remained solid in both of our business divisions, being particularly favourable in the Modular Space business and in several Eastern and Central European countries in Equipment Rental. We were able to continue the positive trend in Group’s profitability improvement and the comparable EBITA margin increased from 13.9% to 14.8%.
The good first half year result for Equipment Rental division was again driven by the Scandinavia segment. Despite the gradual growth slowdown in the new residential construction market in the Stockholm area, sales increased by 9.3% in local currency in Sweden supported by large on-going industry construction projects. We have also been capturing the good market momentum in several Eastern European and Central European countries, which showed double-digit sales growth and improved profitability. Germany and Finland did not meet our targets, as modest sales performance impacted negatively on the result. Actions are taken to improve profitability going forward.
Followed by the performance improvement actions, Modular Space division continued to improve its result in the second quarter. In the first half of the year, the division delivered strong 15.7% organic rental sales growth and a 34.0% increase in EBITA with a margin of 26.3%. Performance improved in all Modular Space countries.
On 26 June 2018, we announced the agreement to acquire the Nordic Modular Group Holding AB (NMG). NMG is an ideal complement to our current modular space business operations, strengthening our competitiveness in the Nordics and creating a platform for further international expansion. The transaction is expected to be concluded by the end of the year. As announced in December 2017, we are also investigating the separation and potential demerger of the Modular Space (Cramo Adapteo) business division. This assessment continues and will be carried out during 2018. The acquisition of NMG further increases Cramo’s latitude in exploring strategic alternatives for the Modular Space business.
According to the current equipment rental market outlook, I expect stabilising growth for the second part of the year. However, the country-specific variances in the equipment rental market are large; slowing growth pace is anticipated for Sweden and Finland, offset by brisk growth in the Eastern European countries. The outlook for the modular space market remains positive.