Extract from the Stock Exchange Release published on 11 February 2020:
Cramo’s fourth quarter performance fell behind the previous year, as expected, and comparable EBITA decreased in all segments. However, the cash flow generation continued to be strong during the quarter and cash flow after investments was EUR 36.9 million, being EUR 15.3 million above last year.
To improve our competitiveness and profit generation going forward, a group-wide performance enhancement programme was largely implemented during the second half of the year. The first results were actualised already in the fourth quarter as comparable indirect costs decreased by EUR 2.8 million from last year. Full run-rate savings of EUR 10-12 million are expected to be realised from 2020 onwards.
The Group’s sales in the fourth quarter were lower compared to last year in comparable currencies. The market environment continued to level out or even decline compared to the previous year in many countries. In Sweden, sales decreased by 10.9% in the local currency compared to the tough comparables of 2018. This was partly caused by weaker market demand and the timing of large industrial projects. The sales contribution from the new industrial projects which was started in late 2019 was still small during the fourth quarter, but the sales and profit contribution is expected to increase during 2020. In Norway, sales development was a disappointment during the fourth quarter, whereas profitability improved. In Finland and Eastern Europe, a more challenging market situation also negatively impacted our sales and profitability, but the market outlook for 2020 is more positive especially for Finland. In Central Europe, sales continued to grow, mainly driven by KBS Infra, but profitability remained at an unsatisfactory level.
Despite short-term challenges in the market, we see many growth opportunities, particularly within selected customersegments and product areas where we have the potential to increase our presence and strengthen our market position. We have now reshaped our company after the spin-off of Adapteo, streamlined our cost base, started the implementation of our new strategy Cramo NXT and set the foundation to differentiate ourselves from the competition. Through our innovative solutions, digitalised offering and committed employees, we are well positioned to capture the opportunities of changing markets and customer needs. In 2020, we will invest in growth opportunities and take the benefit from our streamlined cost base to secure the performance guidance, and so that EBITA will be above EUR 75 million.
Looking into the future, Cramo will, as a result of the successful tender offer, be delisted and become part of Boels Rental. The combination of Cramo and Boels will create a more competitive organisation that is better positioned for greater growth, increased profitability and with the necessary financial strength to better manage the market challenges and level out economic volatility. The combination is a great strategic fit and utilises the strengths of each respective company. Factors such as the complementary geographical footprint, a stronger combined presence in mainland Europe, the optimised portfolio of products and services offered by joint operations and the improved rental expertise through the combination of first-rate teams are examples of how the combined company will be a true European rental leader in quality and scale.
I want to thank all of our personnel for their commitment in developing Cramo into one of the top companies in the rental industry. I would also like to thank all of Cramo’s customers, shareholders and other stakeholders over the years, who placed their trust in us as a publicly listed company.
Leif Gustafsson, Cramo Group’s President and CEO