CAPITAL MARKET DAY 2012 - Ramirent overview CAPITAL MARKET DAY 2012 . Jonas Söderkvist, ... Net...

STRATEGY

25

Financial overview

CAPITAL MARKET DAY 2012 Jonas Söderkvist, CFO, Ramirent Plc

Helsinki centre, Finland

STRATEGY

All current long-term financial targets were met in Q3/12

26

ROI >18% p.a. over a business cycle

Gearing ≤120% at end of each fiscal year EPS growth >15% p.a. over a business cycle

*76%

-200%

-100%

0%

100%

200%

300%

2005 2006 2007 2008 2009 2010 2011 Q32012EPS Target

*R12 Q3 2012 vs. Q3 2011

19%

0%5%

10%15%20%25%30%35%

2005 2006 2007 2008 2009 2010 2011 Q32012ROI Target

73%

0%20%40%60%80%

100%120%140%

2005 2006 2007 2008 2009 2010 2011 Q32012Gearing Target

0,15

0,30

0,50

0,00

0,15 0,25 0,28

0%50%100%150%200%250%300%350%400%

0,000,100,200,300,400,500,60

2005 2006 2007 2008 2009 2010 2011DPS Dividend pay-out ratio Target

Dividend pay-out ratio > 40%

Capital Market Day 2012 l 27 November 2012 l Jonas Söderkvist

FINANCE

STRATEGY

Net sales grew 3.7% in Q3/2012, like-for-like growth* 1.3%

Net sales grew 12.3% in 1-9/2012, like-for-like growth 5.7%

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Change in net sales YoY, %

* Excluding acquisitions in Sweden and Norway

19% 19% 13%

-4%

-25% -31% -31%

-27%

-9%

3% 9%

19% 20% 16%

27% 24% 22%

14%

4%

Q12008

Q2 Q3 Q4 Q12009

Q2 Q3 Q4 Q12010

Q2 Q3 Q4 Q12011

Q2 Q3 Q4 Q12012

Q2 Q3


FINANCE

STRATEGY 28

4%

-1%

17%

4% 1%

9%

-17%

0%

-1%

8%

-2%

1%

7%

-16%

EUR Comparable exchange rates

Change in Q3 net sales YoY, %

Net sales grew in Sweden, Denmark and Europe East both in EUR and comparable exchange rates

EUR Comparable exchange rates


FINANCE

STRATEGY

Share of ancillary income continued to grow

Q3/2012 compared to Q3/2011: • Rental income increased 3.5 % • Ancillary income increased 5.2 % • Income from sold equipment decreased 5.0 %

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68% 68%

29% 29%

3% 3%

0 %

20 %

40 %

60 %

80 %

100 %

Q3/2011 Q3/2012

Income from sold equipment

Ancillary income

Rental income

Breakdown of net sales

121.3 125.5

51.9 54.6 6.0 5.7

0

50

100

150

200

Q3/2011 Q3/2012

Income from sold equipment

Ancillary income

Rental income

MEUR

-5.0 %

+5.2 %

+3.5 %


FINANCE

STRATEGY

Top-line recovery and cost discipline have driven margin expansion

30

492 496 507 531 554 575 613

650 680 700 707

3% 2%

3%

6% 7%

8%

10%

11% 12%

13% 13%

Q12010

Q2 Q3 Q4 Q12011

Q2 Q3 Q4 Q12012

Q2 Q3

Net sales R12 EBIT-% R12

Group Net sales (MEUR) and EBIT margin (%)


FINANCE

STRATEGY

Gross margin decreased slightly in Q3/2012 compared to previous year

31

Gross margin by quarter

71%

70%

68%

65%

69%

65%

67%

68%

66%

67% 67% 68%

69%

66%

68%

66%

68% 69%

Q1 Q2 Q3 Q4 FY

2009 2010 2011 2012


FINANCE

STRATEGY

Stable fixed cost development

The fixed cost level increased year-on-year due to • Acquisitions • Expenses related to development work on Ramirent’s common platform

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Fixed costs by quarter (MEUR)

35 30 33 33 33 33 32 38 37 37 41 42 42 40 42

23 22 19 23 22 23 22

24 27 25 25 28 25 25 26

57 52 52

57 56 56 54

62 63 62 66

70 68 65 68

Q12009

Q2 Q3 Q4 Q12010

Q2 Q3 Q4 Q12011

Q2 Q3 Q4 Q12012

Q2 Q3

Employee benefit expenses Other operating expenses


FINANCE

STRATEGY

EBIT-margin January-September 2012: 12.5% (10.5%)

Q3 EBIT margin at 16.0%

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EBIT margin by quarter

18.2% 19.6%

18.4%

-11.4%

5.9%

10.8% 9.0%

-2.9% -5.0%

5.8%

11.8%

7.5%

2.0%

10.3%

17.0%

13.6%

7.5%

13.4% 16.0%

Q12008

Q2 Q3 Q4 Q12009

Q2 Q3 Q4 Q12010

Q2 Q3 Q4 Q12011

Q2 Q3 Q4 Q12012

Q2 Q3


FINANCE

STRATEGY

Q3 EBIT margin improved in Finland and Norway

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17.0%

23.2%

18.0%

9.9%

7.5%

24.6%

16.3% 16.0%

24.2%

16.4% 15.6%

6.8%

23.4%

2.0%

Group Finland Sweden Norway Denmark East Central

Q3/11 Q3/12

EBIT-margin by segments

Q3/11 Q3/12


FINANCE

STRATEGY

Capital expenditure below last year

Due to acquisitions capital expenditure was high in 2011 in Sweden and Norway, Sweden has also acquired TLM (Tannefors Lift och Maskinuthyrning) in early 2012

35

196

29

61 83

5 10 12

87

15 39

20 1 7 5

1-9/2011 1-9/2012

Capital Expenditure by segments (MEUR)

1-9/2011 1-9/2012

Meilahti Hospital, Helsinki, Finland


FINANCE

STRATEGY

Working capital at 6% of net sales

Q3/2012 credit losses and net change in the allowance for bad debt totalled EUR −2.4 (−0.9) million

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16 15 15 15 15 14 14 16 16 17 17 17 18 18 20

86

88

90

80

83

90

99

97

95

10

9

12

4

12

0

11

4

13

1

14

1

-66

-68

-70

-67

-69

-86

-86

-89

-82

-84

-10

7

-10

9

-13

9

-11

2

-12

2

-6%

-4%

-2%

0%

2%

4%

6%

8%

-120

-80

-40

0

40

80

120

160

Q12009

Q2 Q3 Q4 Q12010

Q2 Q3 Q4 Q12011

Q2 Q3 Q4 Q12012

Q2 Q3

Trade payables and other liabilitiesTrade and other receivablesInventoriesWorking capital/Net sales Rolling 12 month basis

Working capital by quarter (MEUR)


FINANCE

STRATEGY

After a heavy M&A period, focus has been on regaining a strong financial position

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Group Net debt, by quarter (MEUR) Group Capex, by quarter (MEUR)

13 22

10 18

32 45

120

46 36

24 28

Q12010

Q2 Q3 Q4 Q12011

Q2 Q3 Q4 Q12012

Q2 Q3

212 209 197

177 191

238

280 263 258

281

256

Q12010

Q2 Q3 Q4 Q12011

Q2 Q3 Q4 Q12012

Q2 Q3


FINANCE

STRATEGY

-54.8

-29.9

25.2

66.5

17.9 27.8 22.4 19.5

-4.0

13.4 14.4 24.2

-10.7 -20.4

-36.8

15.9 6.4 7.3

23.7

Q12008

Q2 Q3 Q4 Q12009

Q2 Q3 Q4 Q12010

Q2 Q3 Q4 Q12011

Q2 Q3 Q4 Q12012

Q2 Q3

Cash flow after investments Rolling 12 months

Q3/2012 cash flow after investments 23.7 MEUR

38

Cash flow after investments (MEUR)


FINANCE

STRATEGY

96%

84%

70%

69%

81%

113% 106% 108%

99%

86%

74% 68% 68%

71% 64%

56% 60%

80%

92% 81% 84%

87%

73%

0%

20%

40%

60%

80%

100%

120%

0

50

100

150

200

250

300

350

400

FY04

FY05

FY06

FY07

Q12008

Q2 Q3 Q4 Q12009

Q2 Q3 Q4 Q12010

Q2 Q3 Q4 Q12011

Q2 Q3 Q4 Q12012

Q2 Q3

Net debt Gearing (%)

Net debt decreased by 24.7 MEUR in Q3 2012; gearing was at 73.2%

Equity ratio was 41.9% (38.2%) Net debt amounted to EUR 256.0 (279.8) million

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Net debt and gearing

MEUR


FINANCE

STRATEGY

Funding sources at end of Q3 2012

40

Fixed 62%, Average

interest rate 3,84 %

Floating 38%, Average

interest rate 0,95 %

Fixed / Floating

Banks 68%

Insurance Companies

8%

Commercial Papers

29% Leasing 30%

Debt portfolio


FINANCE

STRATEGY

At end of Q3/12, Ramirent had unused committed back-up facilities of 134.2 MEUR

In addition to bank facilities, Ramirent is utilising a domestic commercial paper program of up to EUR 150 million

41

150

240

2012 2013 2014 2015 2016 2017

Repayment schedule of interest-bearing liabilities (MEUR)

390 MEUR in committed credit facilities

256.0 MEUR in net debt


FINANCE

STRATEGY

Our key strategic initiatives are about value creation

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1. Develop customer portfolio

2. Develop product and service offering

3. Develop market portfolio

Key initiative Value creation drivers

4. Operational excellence

External

Internal

Growth with the markets (flat market share)

Gross margin

Improved prices

Acquisitions and outsourcing

Reduced variable and fixed costs

Divestments

5. Ramirent platform

Impact several value creation drivers

Increased market share

+

Financial impact EBIT margin ROI

+

+

+

+

+

+

+

+

+

+

+

+

+

+


FINANCE

STRATEGY

All available levers are used to drive profit

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Total fleet Rental income Other income Net sales Operativecosts

EBITDA Depreciation EBIT

• Increase prices • Improve price

realization • Improve utilization

• Balance fleet structure • Reduce unavailable fleet

through efficient logistics and maintenance

• Charge for ancillary services

• Develop solution offering

• Drive internal efficiency

• Trade/scrap equipment based on TCO

• Manage sourcing

• Preventive maintenance to ensure economic life

• Keep flexibility in cost base to manage fluctuations in demand


FINANCE

STRATEGY

Both sales activities and continued cost discipline are required

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13%

1,4% 1,1%

0,5% 0,3%

16%

EBIT 1209 R12 Price +2% Utilization +2% Personnel costs-2%

Operationalcosts -2%

With actions

Illustrative

EBIT margin 1209 R12 (%) + illustrative effects from different actions

+13% +8% +3% +2% +27% Improvement effect:


FINANCE

STRATEGY

Multiple levers also exist to drive capital efficiency

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Total fleet Book value Goodwill Other fixed assets Fixed assets Net workingcapital

Other non-interestbearing liabilities

Invested capital

• Balanced M&A

• Alternative financing options

• Preventive maintenance to ensure economic life

• Efficient receivables management

• Customer segmentation

• Inventory management

• Procurement management


FINANCE

STRATEGY 46

Company’s strengths

Leading equipment rental company in Northern, Central and Eastern Europe More than 50 years industry experience Diversified portfolios of customers, products and markets Stable profitability and steady cash flow Flexibility to maneuver: capex and cost flexibility, strong balance sheet Strong financial position and funding

Senat's square, Helsinki, Finland


FINANCE

47

NEW LONG−TERM FINANCIAL TARGETS

New long-term financial targets have been set to further emphasize value creation

48

EPS growth (over a business

cycle)

ROI (over a business

cycle)

Gearing (at the end of

each fiscal year)

Dividend pay-out ratio

(% of EPS)

Leverage and risk

Profit generation

Dividend

Element Current target New targets

ROE (over a business

cycle)

Net Debt / EBITDA

(at the end of each fiscal year)

Dividend pay-out ratio

(% of EPS)

• EPS growth is a volatile metric

• ROE target captures shareholder value creation

• Better considers company’s ability to service its debt

• More aligned with the operational steering model

• Keep existing measure

= new target = Deleted target Capital Market Day 2012 l 27 November 2012 l Jonas Söderkvist

FINANCE

Comments to the target level

New long-term financial targets

The new target levels are in line with long-term historical performance and current financial targets

49

ROE

Net Debt / EBITDA

Historic performance

• New Net debt / EBITDA target of < 1.6x is comparable to current Gearing target of < 120%

• Long-term average Net debt / EBITDA has been debt level of 1.4x-1.7x

0%5%

10%15%20%25%30%35%40%

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Q32012

• New ROE target of 18% is comparable to current ROI target of 18%

• Long-term historical ROE has been 18%

0,00,51,01,52,02,53,03,54,04,5

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Q32012

18%

Historical average

Historical average

1.7x

Target = 18%

Target = < 1.6x


FINANCE

STRATEGY

New long-term financial targets

50

Leverage and risk

Profit generation

Dividend

Element Target level

ROE

Net Debt / EBITDA

Dividend pay-out

ratio

18% p.a. over a business cycle

Below 1.6x at the end of each fiscal year

At least 40% of EPS

Measure Q3 2012

18.6%

1.2x

68% of 2011 net profit


FINANCE

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