New Magnus Rosén, President and CEO, Ramirent...
Transcript of New Magnus Rosén, President and CEO, Ramirent...
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Helsinki centre, Finland
Ramirent – a progressive rental solutions group
SEB Enskilda Nordic Seminar, 9 January 2013, Copenhagen Magnus Rosén, President and CEO, Ramirent Plc
Contents
Company in brief Strategic priorities Q3 highlights Sector overview and outlook Financial targets Summary
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Ramirent in brief
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Leading equipment rental company in Northern, Central and Eastern Europe with net sales of EUR 650 million (2011)
375 rental customer centers located in 13 countries and providing 200 000 rental items
Listed on NASDAQ OMX Helsinki since 1998
3 027 employees serving 100 000 customers
Founded in 1955 and headquartered in Finland
IN BRIEF
SEB Enskilda Nordic Seminar 2013 l 9 January 2013 l Magnus Rosén
More than 50 years of experience as a supplier to the construction industry
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Steel nail shop Rakennusmies founded
Equipment rental business established
Acquired by the Partek group and renamed A-rakennusmies
JV in Moscow, Russia
Enter Estonia
MBO by key personnel and capital investors
Enter Latvia
Enter Lithuania
Listed on the Helsinki Stock Exchange
Enter Poland
Renamed Ramirent Plc
JV in Ukraine and greenfield entry to Hungary
Greenfield entry to Czech Republic
Enter Slovakia
1983 1955 1988 1994 1995 1996 1997 1998 2000 2001 2002 2003 2004 2006 2013 2008
Acquires Bautas in Norway
Acquires Altima in Sweden
JV in Russia and Ukraine
IN BRIEF
Ramirent operates in Europe with Baltic Sea region being the core market
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Finland 80 customer
centres
Europe
East 60 customer
centres
Norway
43 customer centres
Denmark 22 customer
centres Europe Central
90 customer centres
Sweden
84 customer centres
Finland 24 %
Sweden 29 %
Norway 23 %
Denmark 6 %
Europe East 9 %
Europe Central
9 %
Sales per segment 1-9/2012
SEB Enskilda Nordic Seminar 2013 l 9 January 2013 l Magnus Rosén
IN BRIEF
Wide network of customer centres
Brand promise Let’s solve it
Our strategic choices
Mission We simplify business by
Delivering Dynamic Rental Solutions™
Vision To be the leading and most progressive
equipment rental solutions company in Europe, setting the benchmark for industry performance
and customer service
Values Open, Progressive, Engaged
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IN BRIEF
SEB Enskilda Nordic Seminar l 9 January 2013 l Magnus Rosén
SEB Enskilda Nordic Seminar 2013 l 9 January 2013 l Magnus Rosén
Light machinery, lifts and modules are the biggest product groups measured by rental income
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MODULES
HEAVY MACHINERY
LIGHT MACHINERY
LIFTS TOWER CRANES AND HOISTS SCAFFOLDING
POWER & HEATING SAFE
20% 7% 5% 11%
18% 4% 25% 10%
Ramirent’s equipment fleet is organised along eight core product groups
IN BRIEF
RA
MIR
ENT
OFF
ERIN
G
CUSTOMER NEEDS
PRODUCTS
• Lifts • Heavy machinery • Tower cranes and hoists • Scaffolding
• Modules • Safety and formworks • Light machinery • Power and heating
SERVICES
• Planning & design • Ramirent know-how • Transportation • Installation • Maintenance • Inspections • Insurance • Operators
• Fuel/gas refilling • Site logistics coordinator • Facility management • Paperwork for authorities • Technical support
SOLUTIONS
• Total Management • Eco solutions • Safety • Event
• Power • Access • Climate • Space
Benefits: Lighter balance sheets, less investments
Benefits: More uptime in core operations due to less downtime in equipment, less maintenance costs, right choice of equipment improves efficiency, less product liability risk
Benefits: Easy to buy, reduced number of subcontractors, increased focus on the core business
OUTSOURCING Benefits: By outsourcing your machine fleet to Ramirent, companies can increase efficiency and simplify their business by focusing on core competences
INDUSTRIES • Construction • Mining • Paper • Power generation • Oil & gas • Shipyards • Facility management • Public sector • Households
We create high-value solutions by integrating various products and services to solve a complete customer problem
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SEB Enskilda Nordic Seminar 2013 l 9 January 2013 l Magnus Rosén
Our strategic priorities
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Customer first
Sustainable profit growth
Common Ramirent platform
Balanced business portfolio
SEB Enskilda Nordic Seminar 2013 l 9 January 2013 l Magnus Rosén
STRATEGY
SEB Enskilda Nordic Seminar 2013 l 9 January 2013 l Magnus Rosén
Target for the non−construction customer segments share of Ramirent sales is 40%
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Construction 69 %
Industrial 18%
Services and Retail
7%
Public 3%
Private 3%
Sales by customer segment 1─9/ 2012 Industry sectors with highest opportunities
Mining
Automotive
Oil refining and other fuels
Metal industry
Chemical, petrochemical
Pulp, paper, wood products
Shipyards
Energy industry
Real estate
Service companies
Retail industry
STRATEGY
R12 sales above previous peak − primary focus lies on improving profitability
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Net Sales (MEUR) AND EBIT %
389
498
634 703
503 531
650 707
0%
5%
10%
15%
20%
25%
30%
0100200300400500600700800
2005 2006 2007 2008 2009 2010 2011 Q32012R12
Net sales EBIT,%
STRATEGY
SEB Enskilda Nordic Seminar l 9 January 2013 l Magnus Rosén
End of 2009
We accelerate our growth through acquisitions and outsourcing cases
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Outsourcing deal in Denmark
Outsourcing deal in Finland Acquisition of
Finnish weather protection rental
company
Outsourcing deal with two subsidiaries in Finland
Outsourcing deal in Finland
Some 50 companies on our watch list
Acquisition of Swedish rental company
Outsourcing deal in Norway
Acquisition of Czech rental
business
Aquisition of Czech rental
business
Acquisition of Czech rental
business
Acquisition of Swedish rental
company
Acquisition of Danish rental
business
Acquisition of specialist module rental company in
Norway
Danish scaffolding
division
Acquisition of Swedish rental
company
Acquisition of Swedish rental
company
2010
2011 2012
Outsourcing deal in Norway
STRATEGY
JV in Russia and Ukraine announced
SEB Enskilda Nordic Seminar 2013 l 9 January 2013 l Magnus Rosén
Group
New strategy for our presence in Russia and Ukraine through joint venture with Cramo
A stand-alone entity with new corporate identity 50/50 ownership for Cramo and Ramirent 2012E net sales and EBITDA margin of €52 million and ~35%, respectively 400 employees Depot locations: St. Petersburg region 7, Moscow region 6, other regions Russia 3, Ukraine 6 (+ 6 shop-in-shop outlets)
Key Facts
Group
UKRAINE
RUSSIA
Combining Forces in Growing Markets… …Creates a Strong Stand-Alone Company
“50/50 JV”
Total Sales 2012E: €52m
50% 50%
Rationale is to create strong player with increased financial resources and excellent organisational capabilities to capture the growth opportunities in target markets
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SEB Enskilda Nordic Seminar 2013 l 9 January 2013 l Magnus Rosén
Creating the Leading Rental Company in Russia and Ukraine through complementary Strengths Cramo’s unique
strengths
• Fleet and capabilities to
offer modular space to serve construction and industrial customers
• Good presence with international
construction and industrial customers • Existing platform location in Ural region
(Yekaterinburg)
Common strengths
• General rental concept • Broad equipment fleet
• Established presence in St. Petersburg and
Moscow • Strong local management
• Modern way-of-working due to the Western
background
Ramirent’s unique strengths
• Fleet and capabilities in heavy equipment to serve infrastructure construction • Large customer base • Presence in Ukraine
• Existing platform location in South region (Sochi)
• Expanded presence by utilizing sales agents
Combined company: Leading rental company in Russia and Ukraine
+ +
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STRATEGY
SEB Enskilda Nordic Seminar 2013 l 9 January 2013 l Magnus Rosén
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
STRATEGY
SEB Enskilda Nordic Seminar l 9 January 2013 l Magnus Rosén
We are well-positioned to capture the long-term growth opportunities in the industry
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Rental penetration
Outsourcing
Integrated solutions
Market consolidation
Long-term growth in emerging markets
In the long term, rental penetration is expected to increase in Europe as construction companies and industrials recognize the advantages of renting
There is a general trend towards outsourcing non-core activities to reduce capital employed and improve flexibility
Customers are increasingly interested in giving a broader integrated responsibility in their projects to rental companies
The equipment rental industry is highly fragmented and Ramirent’s strong position enables it to take an active role in the market consolidation
In the emerging rental markets there are long-term growth potential in the construction volumes per capita compared to more mature Western Europe
SEB Enskilda Nordic Seminar l 9 January 2013 l Magnus Rosén
STRATEGY STRATEGY
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Tryggare Byggare roadshow, Malmö, Sweden
Q3 2012 highlights
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1-9 2012: Net sales growth slows, profitability stable, positive cash flow fourth quarter in a row
Net sales MEUR 519.9 (463.1) up 12.3% or 10.6% at comparable exchange rates; Like-for-like* growth 5.7% EBITDA MEUR 153.8 (126.8) EBITDA-margin 29.6% (27.4%) EBIT MEUR 64.8 (48.6) EBIT-margin 12.5% (10.5%) Gross capex MEUR 87.2 (196.3) Cash flow after investments MEUR 37.3 (-67.9) Net debt MEUR 256.0 (279.8) Gearing 73.2% (91.7%)
Customer centres 375 (412)
*Excluding acquisitions in Sweden and Norway
Q3 HIGHLIGHTS
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4 %
-1 %
17 %
4 % 1 %
9 %
-17 % -20 %
-15 %
-10 %
-5 %
0 %
5 %
10 %
15 %
20 %
YoY Change in net sales , Q3, %
Net sales grew in Q3 in all segments except Europe Central and Finland
12 % 11 %
18 % 20 %
10 %
16 %
-15 % -20 %
-15 %
-10 %
-5 %
0 %
5 %
10 %
15 %
20 %
25 %
YoY Change in net sales, 1-9/12, %
Q3 HIGHLIGHTS
SEB Enskilda Nordic Seminar l 9 January 2013 l Magnus Rosén
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16 %
24 %
16 % 16 %
7 %
23 %
2 %
0 %
5 %
10 %
15 %
20 %
25 %
30 %
Q3 2011 Q3 2012
EBIT margin Q3/12 vs. Q3/11
EBIT margin improved in Q3 in Finland and Norway
EBIT margin 1-9/12 vs. 1-9/11
12 %
18 % 16 %
13 %
2 %
13 %
-4 % -5 %
0 %
5 %
10 %
15 %
20 %
1-9 2011 1-9 20121-9 2011 1-9 2012 Q3 2012 Q3 2011
Q3 HIGHLIGHTS
SEB Enskilda Nordic Seminar l 9 January 2013 l Magnus Rosén
-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
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Cash flow after investments (MEUR)
Q3 HIGHLIGHTS
SEB Enskilda Nordic Seminar l 9 January 2013 l Magnus Rosén
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
Q3 HIGHLIGHTS
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Fortum Jelgava Power Plant, Latvia
Sector overview and outlook
Nordic construction order books decreasing (-4%) for first time in three years
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-40%
-20%
0%
20%
40%
60%
0
2
4
6
8
10
12
14
16
18
20
Q12007
Q2 Q3 Q4 Q12008
Q2 Q3 Q4 Q12009
Q2 Q3 Q4 Q12010
Q2 Q3 Q4 Q12011
Q2 Q3 Q4 Q12012
Q2 Q3
Order book Nordics (BEUR, real exchange rates)*
Skanska NCC
Peab Veidekke
YIT Lemminkäinen
SRV Change in Net sales YoY, R12 Ramirent
Change in order backlog YoY, Nordic construction
* Order books for Swe, Fin, Nor, Den
4% decrease vs. Q3/11 in real exchange rates, 2% increase in fixed 4% decrease vs. Q2/12
OUTLOOK
SEB Enskilda Nordic Seminar l 9 January 2013 l Magnus Rosén
Market outlook – Construction output forecasts
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Country 2012F 2013F 2014F Source*
Nordic Finland -3.4% -2.3% 0.8% Euroconstruct
Sweden -2.4% 0.2% 2.6% Euroconstruct
Norway 4.7% 5.6% 2.5% Euroconstruct
Denmark 0.5% 2.2% 4.4% Euroconstruct
Europe Central Poland 1.6% -3.4% -1.0% Euroconstruct
Czech Republic -5.4% -1.9% 0.8% Euroconstruct
Slovakia -13.3% -1.0% 2.2% Euroconstruct
Hungary -9.0% 0.9% 3.4% Euroconstruct
Europe East Russia 3.0% 0-5% 0-5% Euroconstruct
Estonia 23.0% 2.0% -3.0% Euroconstruct
Latvia 8.0% 4.0% -2.0% Euroconstruct
Lithuania 1.0% 3.0% -1.0% Euroconstruct
Ukraine n.a. - n.a. n.a. Euroconstruct
*Source: Euroconstruct December 2012
OUTLOOK
SEB Enskilda Nordic Seminar l 9 January 2013 l Magnus Rosén
Our strategic and operational themes through the business cycles
Weak Stable Strong
Strategic themes
• Safe-guard profitability and cash flow
• Consolidate market – Outsourcing cases
• Realize synergies through operational excellence
• Consolidate market – Bolt-on acquisitions
• Profitable growth
Operational themes
• Pricing discipline • Execute contingency plans • Reduce costs and transform
fixed costs to variable • Reduce financial risk, focus
on A/R and credits • Amortise debt • Limited capex, transfer fleet
to where demand is
• Develop product, customer and market portfolio
• Expand value offering • Maintenance capex
• Drive penetration and capture growth opportunities
• Keep control of fixed cost base
• Prepare contingency plans
• Growth capex for expansion
Weak market conditions in 2009-2010
Increased demand and investments
2011-2012
Business cycle
Counter cyclical cash flow
Market conditions
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SEB Enskilda Nordic Seminar l 9 January 2013 l Magnus Rosén
Ramirent outlook 2012 unchanged
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In 2012, net sales are expected to increase and the result before taxes is expected to improve compared to 2011.
OUTLOOK
SEB Enskilda Nordic Seminar 2013 l 9 January 2013 l Magnus Rosén
Long-term financial targets
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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
FINANCIAL TARGETS
SEB Enskilda Nordic Seminar l 9 January 2013 l Magnus Rosén
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Summary of 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
SUMMARY
SEB Enskilda Nordic Seminar l 9 January 2013 l Magnus Rosén