Cramo’s Shape & Share strategy emphasises digitalisation and the sharing economy.
Cramo, one of the leading companies in Europe in equipment rental and modular space, has published its strategy for 2017-2020. The Shape & Share strategy focuses on strong growth in selected markets, optimizing the current expertise and developing innovations.
Cramo is seeking strong growth from new business models, shared resources and a corporate culture that focuses on innovation. The Shape & Share strategy is stemming from 3 megatrends: urbanization, sustainability and digitalisation.
– With the help of digitalisation, we’re able to rapidly assess how we can fulfil the needs and develop new innovations. We place a lot of value on creating great customer experiences and want to come up with even more comprehensive and flexible rental solutions for our equipment rental and modular space, says President and CEO of Cramo Group Leif Gustafsson.
A good example of Cramo’s latest digital services is the online rental service Cramo eCRent, which was launched last autumn. Cramo also renewed both the Group and its individual national websites recently. The Internet of Things has also entered the industry. Cramo is utilising IoT in the maintenance, handling and management of 10 000 machines, and in product development.
Shared resources promote a sustainable corporate culture
As a company in the rental sector, Cramo is also aiming to utilise the potential of the sharing economy in accordance with its new vision, Shared Resources Simplified. The consumers of today utilise the sharing economy to save time, money and the environment by sharing their resources and possessions. The sharing economy also provides companies with a wealth of opportunities for operating in a more sustainable, safe and effective way.
– Renting is a sustainable act. Not only does Cramo provide its customers with the equipment they need, but it also provides them with its expertise in the field. We can offer our customers with effective and safe guidance and training on how to use our equipment. This way, we can also do our part for work safety and the environment, emphasizes Gustafsson.
In accordance with its new strategy, Cramo also aims to share and develop its internal expertise and distribute its best practices even more efficiently. One focus area of the strategy is to enable people to perform.
– In the rental sector, our personnel are our most important competitive asset. Here at Cramo, we focus on the expertise and training of our personnel, and cultivating a culture of innovation. We organized an internal innovation race with great results earlier this year and will establish a Cramo innovation Lab. Our mission is to “Create great days at work and room for great days”, notes Gustafsson.
Equipment rental and modular space receive individual objectives and business models
As part of its new strategy, Cramo will divide equipment rentals and modular space into two stand-alone divisions with their own business goals. The modular space division is seeking strong growth especially in Central Europe, and particularly in Germany.
– The customer groups and project types for modular space and equipment rentals are different, and they have different types of rental periods as well. That’s why we need two different business models, to be able to develop our activities in the best possible way, Gustafsson explains.
New financial targets
Based on the Shape & Share strategy, Cramo also sets new financial targets for 2017-2020. The new financial targets are set separately for the Equipment rental and Modular space business divisions as well as for the Cramo Group. New financial targets (on average during the period) are:
Group financial targets
• Return on equity (ROE) > 15%
• Net debt/EBITDA < 3
• Profit distribution (unchanged). Dividend approx. 40% of annual earnings per share (EPS).
Equipment rental financial targets
• Organic sales growth > markets
• ROCE > 14.5%
Modular space financial targets
• Double digit organic rental sales growth
• ROCE > 12.5%
New segment structure
As of the first quarter 2017, Cramo has decided to publish its financial information according to the new segment structure:
• Equipment rental, Scandinavia
• Equipment rental, Finland and Eastern Europe
• Equipment rental, Central Europe
• Modular space