Extract from the Stock Exchange Release published on 2 May 2019:
Cramo’s first quarter performance was mixed. The Equipment Rental division fell short of expectations as lower than expected organic sales growth impacted on the profitability. The Modular Space division’s sales continued according to expectations, but profitability for the first quarter was negatively affected by the integration of the NMG. The Group’s organic sales growth was 2.4%, supported by both business divisions. Comparable EBITA increased by 0.8% to EUR 24.1 million and was driven by the Modular Space segment. On 18 February 2019, Cramo announced that the Board of Directors has approved a demerger plan concerning the spin-off of the Modular Space business into a new listed company. Actions related to the partial demerger are ongoing and the listing is expected to take place no later than in the third quarter of 2019.
The Equipment Rental division’s sales growth was 5.8% in local currencies, supported by KBS acquisition. However, organic sales growth of 1.3% did not meet our expectations although sales increased compared to the previous year in almost all countries. Especially many Eastern European countries and Norway continued to improve sales and profitability was supported by good demand. However, in Sweden, sales were negatively affected by the ending of large projects and delays in new projects. We are constantly following the market conditions in all countries in order to adapt to changes in demand. In order to secure the profitability going forward, in Sweden, we are optimising the fleet mix within the regions and improving our sales efficiency. In Finland and Germany, we are currently executing transformation programmes, including various operative performance improvement actions. Positive results are expected to be seen gradually from Q2 19 onwards.
In the Modular Space division, total rental sales improved by 49.8% in local currencies, driven mainly by the Nordic Modular Group (NMG) acquisition completed during the last quarter of 2018. The integration is proceeding according to plan and positive impact is already visible in terms of market position and business model expansion. Also, organic rental sales increased by 12.0%, where all countries contributed to growth. Comparable EBITA improved by 45.3%, supported by the NMG acquisition, positive development in rental sales and other operative measures.
The rental market outlook varies between the countries, with slowing growth in Sweden, and a stable market in Finland, Norway, Germany and Austria. In the Eastern European countries, including the Czech Republic and Slovakia, favourable market conditions are expected to continue. The outlook for the Modular Space market remains strong.
Cramo’s purpose is to drive the sharing economy. We believe digitalisation is one of the most important enablers of more efficient and accessible sharing. On 18 February, we launched a new digital solution for smarter rental including an easy-to-access web portal and two mobile apps, which make it easier for our customers to rent and manage their equipment digitally and manage returns of equipment. In order to offer the easiest possible access to shared resources, we will continue to invest in digitalisation also in the future.