4 Streamlining legal & operative structure • After the RK – Cramo transaction, several activities have been undertaken to streamline legal and operative structure and to eliminate any non- operative entities deemed redundant • The activities include – Combination of operations within markets in which RK and Cramo had overlapping operations (described in earlier pages) – Separation of operations and administration into different entities – Combination of Modular space into a single reporting unit – Concentration of subsidiary ownership into a single entity p 18
4 Targeted final structure of Cramo Group in 2007 Cramo Oyj, Group functions Cramo AB, Sweden, Group functions Cramo Sverige Cramo Estonia Cramo Finland Cramo Cramo Instant Cramo A/S, Cramo Srl, AB, AS, Oy, Instant AB, Oy, Denmark Czech Republic Sweden Estonia Finland Sweden Finland Cramo Subs Subs SIA Cramo UAB, Cramo AS, Zao Cramo, Sp.Z.o.o., Cramo, Lithuania Norway Russia Poland Latvia Modular space business Equipment rental business Subs p 19
Cramo Group overview and vision • Overview of the Cramo Group • Cramo Group vision • Follow-up on the sources of synergy as a result of the RK – Cramo combination • Summary • Appendix: Construction and rental market information p 20
Summary • Our vision – #1 or #2 in each market of presence – Customers’ first choice – One of the most profitable • After successful integration, we are on track to realize the planned synergies from the RK Cramo combination p 21
Cramo Group overview and vision • Overview of the Cramo Group • Cramo Group vision • Follow-up on the sources of synergy as a result of the RK – Cramo combination • Summary • Appendix: Construction and rental market information p 22
GDP growth in Cramo countries GDP growth 2005 2006E 2007F 2008F BEUR Growth % vs. previous Growth % vs. previous Growth % vs. previous forecast forecast forecast Finland 157 4,5 % #ARVO! 2,8 % #ARVO! 2,5 % #ARVO! Sweden 288 4,1 % 0,4 % 3,3 % 0,1 % 2,9 % 0,6 % Norway 237 2,1 % 0,8 % 2,9 % 0,4 % 2,8 % 0,1 % Denmark 209 3,5 % 0,7 % 2,3 % -0,2 % 2,3 % -0,2 % Poland 244 5,2 % 0,7 % 5,1 % 0,5 % 5,3 % 0,3 % Estonia 11 11,8 % 3,7 % 9,5 % 1,9 % 7,6 % 0,7 % Latvia 13 11,0 % 2,5 % 8,9 % 0,9 % 8,0 % 2,5 % Lithuania 21 8,0 % 1,0 % 6,7 % 0,3 % 6,6 % 0,1 % Russia 620 6,5 % 6,5 % 6,5 % 6,5 % 6,0 % 6,0 % n.a. n.a. n.a. Czech Republic 98 5,6 % 1,3 % 5,0 % 0,6 % 4,8 % 0,4 % Source: Euroconstruct, December 2006 and June 2006 Change vs. previous >+1,0% +0,4 – +1,0% - 0,3% – +0,3% -0,4 – -1,0% <-1,0% Euroconstruct estimate p 23
Economies in the CEE is growing fast but population is declining GDP / capita growth Population growth GDP growth Annual GDP / capita growth Annual population growth Annual GDP growth 0 % 2 % 4 % 6 % 8 % 10 % 12 % -1,0 % -0,5 % 0,0 % 0,5 % 1,0 % 1,5 % 2,0 % 2,5 % 0 % 2 % 4 % 6 % 8 % 10 % 12 % Latvia Latvia Latvia Estonia Estonia Estonia Ukraine Ukraine Ukraine Lithuania Lithuania Lithuania Russia Russia Russia Slovakia Slovakia Slovakia Poland Poland Poland Czech Republic Czech Republic Czech Republic Ireland Ireland Ireland Spain Spain Spain Hungary Hungary Hungary Sw eden Sw eden Sw eden UK UK UK Finland Finland Finland Norw ay Norw ay Norw ay Denmark Denmark Denmark Austria Austria Austria The Netherlands The Netherlands The Netherlands Belgium Belgium Belgium France France France Portugal Portugal Portugal Italy Italy Italy Sw itzerland Sw itzerland Sw itzerland Germany Germany Germany 2003-06E 2006E-09E 2003-06E 2006E-09E 2003-06E 2006E-09E Countries with current Cramo presence p 24 Source: Euroconstruct, December 2006
Construction market growth in Cramo countries Construction volumes 2005 2006E 2007F 2008F MEUR Growth % vs. previous Growth % vs. previous Growth % vs. previous forecast forecast forecast Finland 22 240 4,1 % 0,5 % 1,4 % 0,9 % -1,4 % -0,5 % Sweden 21 194 6,9 % 0,1 % 5,5 % 1,1 % 2,1 % 0,7 % Norway 26 396 6,2 % 0,8 % 2,3 % -0,3 % 0,3 % 0,2 % Denmark 24 767 2,3 % 0,8 % 0,2 % -1,1 % 2,0 % 0,1 % Poland 23 945 9,9 % 1,0 % 8,5 % 1,3 % 12,0 % 3,7 % Estonia 2 000 20,0 % 6,0 % 13,0 % 3,0 % 8,0 % -2,0 % Latvia 1 650 20,0 % 4,0 % 11,0 % 1,0 % 8,0 % -2,0 % Lithuania 2 100 13,0 % 1,0 % 8,0 % -2,0 % 6,0 % 1,0 % n.a. n.a. n.a. Russia 55 000 8,0 % 8,0 % 6,0 % 6,0 % 5,0 % 5,0 % Czech Republic 15 289 5,5 % 0,7 % 4,4 % -0,6 % 3,8 % -1,5 % Source: Euroconstruct, December 2006 and June 2006 Change vs. previous >+1,0% +0,4 – +1,0% - 0,3% – +0,3% -0,4 – -1,0% <-1,0% Euroconstruct estimate p 25
Room for substantial further construction growth in the CEE area 12 % Average Western & POL Northern Europe 10 % EST LAT Average annual change in construction per capita (2006-09E) 8 % LIT RUS* 6 % HUN CZE SLO 4 % UKR* SWI UK SWE 2 % AUT BEL DEN GER SPA NOR SWI FRA 0 % 0,0 1,0 2,0 3,0 4,0 5,0 6,0 7,0 8,0 9,0 ITA FIN POR -2 % IRE Average Central & Eastern Europe -4 % Construction / capita (2006E) Countries with current Cramo presence p 26 Source: Euroconstruct December 2006 *2006-08E
Differing growth rates within construction Residential construction Non-residential construction Civil engineering Construction growth rates (p.a.) 2003-06E 2006E-08E 2003-06E 2006E-08E 2003-06E 2006E-08E Finland 6,7 % 0,4 % 4,0 % -0,5 % -0,7 % 0,1 % Sweden 10,2 % 2,9 % 2,5 % 4,3 % 1,8 % 4,5 % Norway 10,6 % 1,7 % 8,0 % 0,0 % 5,6 % 2,7 % Denmark 7,2 % -1,0 % 0,3 % 2,4 % -1,1 % 4,0 % Poland 5,0 % 7,3 % 5,0 % 4,9 % 11,0 % 18,8 % Estonia 28,5 % 12,5 % 11,0 % 7,5 % 19,1 % 12,5 % Latvia 42,3 % 12,5 % 7,6 % 7,5 % 14,3 % 10,0 % Lithuania 16,2 % 10,0 % 6,2 % 5,0 % 13,5 % 7,5 % Russia n.a. n.a. n.a. n.a. n.a. n.a. Czech Republic 9,7 % 3,2 % -1,2 % 3,4 % 13,3 % 5,0 % Differences between the construction subsegments • Different areas of construction (residential, non-residential, civil engineering) develop in slightly different cycles over time • Customers have differing equipment needs depending on the type of construction project Implications for equipment rental • Construction subsegment growth expectations taken into account in fleet investment and allocation decisions • Cross-border mobility of rental fleet is important to meet customer needs and reach optimal utilization levels Market growth estimate Flattening or declining market Continuing or increasing growth 2006-08E vs. 2003-06E: Source: Euroconstruct December 2006 p 27
European equipment rental market 6,0 6 Total European Total rental turnover 2006 (EUR m) equipment rental 5 market 2006 = EUR 21,5 billion 4,0 4 3,5 3 2,3 2 1,3 1 0,6 0,6 0,5 0,5 0,4 0,4 0,3 0,3 0,2 0,1 0,0 0,0 0 Ireland France Spain Italy Sweden Finland Austria Switzerland Poland Lithuania UK Germany Norway Netherlands Denmark Belgium Hungary Source: European Rental Association best estimates, June 2007 p 28
Equipment rental penetration rate Rental Penetration Rate Rental Penetration Development 90 % Estimated rental penetration rate 0 % 20 % 40 % 60 % 80 % 100 % 80 % Great Britain 70 % Estimated rental penetration rate 60 % Japan 50 % 40 % 30 % North America 20 % Europe (excl. 10 % U.K.) 0 % Great Britain Sweden Denmark Norway Finland Baltic Countries Poland Petersburg) Russia (St. 2005 2010E Cramo estimates the Nordic countries to eventually reach a penetration rate of 60% Source: Cramo estimates, International Rental News p 29
Cramo Plc Capital markets day Highlights of Cramo Group strategy Göran Carlson, Deputy CEO Helsinki, June 14, 2007
Cramo Group strategy Process Update • Immediately after the combination of RK and Cramo in early 2006, the work on the new common strategy commenced • In August 2006, the strategy was communicated and implementation started throughout the Group. Business plans were made for each country, aligned with overall Group strategy and vision • Cramo will perform annual updates and revisions of the Group strategy – The 2007 update process is currently ongoing – The current strategy is solid and no significant changes are foreseen • Updated strategy planned to be launched Q3 2007 p 31
From Vision to Actionable Strategy Key strategic issues 1. 1 Portfolio strategy and geographic market prioritization 2 2. Customer focus 3. Growth opportunities 3 4. Profit improvement opportunities 4 p 32
1 Outcome of portfolio strategy A dynamic approach Geographical markets Business prioritization Equipment rental Modular Space Core Emerging core Supporting business Finland Core areas Rental and sales Finland Sweden Independent business Estonia Norway St. Petersburg Norway Latvia Sweden Emerging Lithuania Estonia core Russia Poland areas Latvia Russia Denmark Czech Republic Lithuania Netherlands Denmark Belarus Poland Modular space Germany Belgium production Supporting Czech Ukraine Republic areas Industrial halls Slovakia Austria Moldova Hungary Slovenia Romania Croatia Independent Netherlands Bosnia and Serbia areas Herzegovina Bulgaria Macedonia Albania p 33
1 From current to new market opportunities Ongoing investigation of new geographic markets on several fronts Equipment rental Modular space Finland Finland Norway Norway Sweden Sweden Estonia Estonia Russia Russia Denmark Latvia Denmark Latvia Lithuania Lithuania Netherlands Netherlands Belarus Belarus Poland Poland Germany Germany Belgium Czech. Czech. Ukraine Ukraine Rep Rep Slovakia Slovakia Market leader Austria Austria Moldova Moldova Hungary Hungary Top 2 player Romania Romania Top 3 player Slovenia Slovenia Small player Bulgaria Bulgaria Under investigation No activity currently Source: Cramo estimates p 34
2 Customer focus Loyal customer base as a result of superior customer relations Sales per customer segment (2006) Strategic priorities • Strong customer relations built on trust, knowledge and close contact segment in the Other customer equipment planning and process 2 % (7 %) development Households • The total sales driven organization meeting the 3 % (4 %) customer in a number of ways for prioritized Public sector segments 17 % (13 %) – Construction industry – Industry (incl. manufacturing) Construction industry 54 % (58 %) – Public sector Other industry 24 % (18%) – Professional service • Structured sales process and segmentation including an up to date rental system • CRM applications and data warehouse are tools making it possible to quickly analyze and respond to changes in customer behavior p 35
3 Product and customer focus Construction site demand curve Building Education machinery Transports Heating equipment Material handling Aerial equipment Erection, cleaning IT, telephony Fences, safety, Site services Hoist, container.. Construction equipment Site huts and Create and use Electrical office space synergies between system product groups p 36
3 “Total Solution” concept for equipment rental Based on a broad product and service offering Product areas Service range Building Customized rental Machinery concepts Construction Construction Site Machinery Services Cramo Equipment Rental Total Solution Aerials and Customer Forklifts Support Building Site Business Support Facilities p 37
3 Cramo’s growth strategy Implementation continues according to plan • Cramo continues to execute its new growth strategy • Cramo made three acquisitions around year-end 2006 – UAB Aukstumines Sistemos, Lithuania, acquired in December 2006 – Hamar Liftutleie AS, Norway, acquired in January 2007 – Kongsberg Maskinutleie AS, Norway, acquired in January 2007 • Three new acquisitions made subsequently in the first few months of the year – The rental assets of Jyväskylän Konevuokraamo Oy, Finland, acquired in March 2007 – Göby Ab, Sweden, a specialist in site huts, work platforms and electricity equipment, acquired in March 2007 – The rental assets of JM-Alltrans Oy, Finland, a specialist in compact construction machinery, acquired in May 2007 • Cramo divested its Dutch subsidiary, Cramo Nederland B.V. in March as part of the strategy to focus resources on the core Nordic and CEE markets • The possibility to enter new markets in Central and Eastern Europe is being investigated p 38
4 Profit improvement opportunities Some on-going activities 1. Improved fleet performance 2. Improved financial flexibility 3. Group purchasing of non-rental equipment 4. Effective pricing 5. Management incentive plans aligned with strategic targets p 39
Cramo Group strategy Summary • The current Cramo Group strategy, as formulated during 2006, is built around the following four strategic issues: – Portfolio strategy and geographic market prioritization – Customer focus – Growth opportunities – Profit improvement opportunities • The implementation of the strategy has proceeded according to plan and focus has been shifted from integration to growth • Cramo Group is currently performing the annual updating process of the Group strategy. The outcome will be communicated separately later in the year p 40
Cramo Plc Capital markets day Equipment rental Scandinavia Magnus Rosén, SVP Helsinki, June 14, 2007
Cramo Scandinavia overview Cramo Scandinavia organization Share of Group sales (2006) Cramo Scandinavia Magnus Rosén, SVP Sales (2006): EUR 241,0 m Employees (2006): 827 Depots (2006): 145 Western Europe Sweden 16 % 43 % Cramo Sweden Western Europe Share of Group EBITA (2006) Magnus Rosén Cramo Norway Region South Finn Løkken Cramo Denmark Region West Ole Wamsler Region East Region North Sweden 44 % Western Support functions Europe 10 % p 42
Overview of products and services in Scandinavia Equipment rental Building machinery Construction machinery Aerials and forklifts Building site facilities Other services Construction Scaffolding with drivers Other services, including • Long-term rental • Used machine trading • Education • Snow clearance • Web-based business support Electrification Heating p 43
Sales mix Split by product group and customer segment Sales by product group, 2006 Sales by customer segment, 2006 Merchandise Other Households sales and other 3 % 2 % 8 % Building Public sector machinery 10 % Aerial and forklift rentals rentals 33 % 18 % Other industry Construction 26 % industry 59 % Site set-up infrastructure and Construction services machinery 23 % rentals * 18 % *Includes approximately 10% of construction equipment with operators Note: Figures include the Netherlands p 44
Equipment rental operations in Scandinavia Key activities 2006 - 2007 Scandinavia – 137 depots (3/2007) • Strengthening of sales organisation 105 depots (30 franchise) • Implementation of one major repair center in Sweden for building 22 depots machinery • Development and integration of a new 10 depots rental system • Further investments in the most demanded and profitable product areas to secure full deliveries to customers • Opening of 5 greenfield depots in Norway, 3 in Denmark and 3 in Sweden • Acqusitions needed for more market share in Norway and Denmark in particular, but also in Sweden mainly in order to secure the markets in the major cities • Keep focus on cost levels in each and every depot p 45
Financial performance Equipment rental Sweden Quarterly sales, 2005-07 Quarterly EBITA, 2005-07 Y-o-Y EBITA % growth 21,1% +27,3% 2007 07/06 Y-o-Y EBITA % growth 17,8% 16,0% 24,0% 23,2% +23,2% +11,4% +12,3% +33,8% 2006 06/05 14 60 51,6 12,0 12 50 46,6 10,6 44,3 9,9 42,2 10 39,4 38,6 40 37,9 Quarterly EBITA (EUR m) 36,6 Quarterly sales (EUR m) 8 7,3 29,7 6,8 30 6,5 6,0 6 5,4 20 4 10 2 1,3 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2005 2006 2007 2005 2006 2007 p 46
Financial performance Equipment rental Western Europe Quarterly sales, 2005-07 Quarterly EBITA, 2005-07 Y-o-Y EBITA % 8,6% / +33,3% / growth 9,0%* +40,7%* 2007 07/06 Y-o-Y EBITA % 6,7% / growth 11,2% 13,9% 17,6% +39,5% +26,2% +31,6% +21,8% 8,0%* 2006 06/05 20 4 19,0 18,6 18 17,5 3,3 3 16,0 16 15,3 2,4 14,3 14 13,3 12,7 2 1,8 m) m) 1,6 12 R (EUR Quarterly sales (EU 10,2 1,1 ITA 10 1,0 1 0,8 Quarterly EB 8 0,4 0 6 Q1 Q2 Q3 Q4 4 -1 -0,9 2 0 Q1 Q2 Q3 Q4 -2 2005 2006 2007 2005 2006 2007 *Excluding the divested Netherlands operations p 47
Key market trends Construction market trends Construction growth indicators Change % • After a 12% increase in the volume of construction investments 0 % 5 % 10 % 15 % 20 % 25 % in 2006, Sveriges Byggindustrier** forecasts a continuing but slower growth in 2007, at approximately 7% Sweden - Euroconstruct – Residential construction in Sweden is expected to 5,5 % construction value growth continue to develop strongly in 2007, but focus is estimate for 2007* expected to shift increasingly to non-residential by 2008 Sweden - Revised BI • In Norway, the residential market has developed strongly in the construction value growth 7,0 % beginning of the year. Non-residential and civil engineering are estimate for 2007** expected to gain share in the future • The Danish market is performing strongly overall, except for residential construction in the Copenhagen area, which is experiencing a decline. Non-residential segment is strong. Norway - Euroconstruct Equipment rental trends construction value growth 2,3 % estimate for 2007* Norway - Construction • General increase of rental penetration expected to continue but sector turnover growth in 22,0 % at lower pace Q1/07 vs. Q1/06*** • Building companies internal capacity is fully used which will drive rental of equipment • The lack of machines for construction companies, especially for site huts and cranes impacts the market Denmark - Euroconstruct construction value growth 0,2 % estimate for 2007* Denmark - Construction sector turnover growth in 18,6 % Q1/07 vs. Q1/06**** *Euroconstruct, December 2006 **BI, Confederation of Swedish Contruction Industries, April 2007 p 48 ***Statistics Norway ****Statistics Denmark
Competitive position in Sweden Company Company type Coverage Market position* National, Cramo 1. General rental 105 depots National, Ramirent 2. General rental 48 depots Lambertsson PEAB’s internal rental 3. Skanska’s internal Skanska 4. rental Southern Sweden, Hyrman General Rental 5. 7 depots Access equipment Southern and Central Stavdal 6. Sweden specialist Cramo is a strong # 1 on the Swedish equipment rental market * Cramo management estimate of the market positions on the general equipment rental market. p 49
Competitive position in Norway Company Company type Coverage Market position* National Bautas (Ramirent) 1. General rental 37 Depots National UCO 2. General rental 21 Depots National Cramo General Rental 3. 22 Depots Site hut specialist, National Malthus 4. turning into generalist 12 Depots Cramo is a strong follower at # 3 position on the Norwegian equipment rental market * Cramo management estimate of the market positions on the general equipment rental market. p 50
Competitive position in Denmark Company Company type Coverage Market position* Crane and access National BMS 1. equipment specialist 7 Depots National Ramirent 2. General rental 16 Depots National Ajos General rental 3. 3 Depots National DNE General rental 4. 8 Depots National JJ Maskin General rental 5. 6 Depots National Cramo General rental 6. 10 depots Cramo is ~# 6 on the Danish equipment rental market * Cramo management estimate of the market positions on the general equipment rental market. p 51
Opportunities and challenges in Scandinavia Opportunities Challenges • Be the largest total solution provider • Be one of the 2 largest rental in Scandinavia companies in Denmark and Norway • Increase the depot network in • Further strengthen the position as the Denmark and Norway, both by largest rental provider in Sweden organic and acqusition-based growth • Increase market share in Stockholm, • Growth potential in rental-related Gothenbourg and Malmo services • Be the leading rental company in environmental issues in order to meet customers’ demands and certifications p 52
Strategic priorities and targets Strategic priorities Targets • Pursure growth – Strenghen the structured sales process with well-defined roles, responsibilities, activities and metrics to pursue strong organic growth – Pursue tactical acqusitions and outsourcing • Grow in a balanced deals to further accelerate growth manner into a market • Excel in fleet management leadership position – Define, monitor and drive the rental fleet and (Scandinavia) depots to meet performance targets • Grow both through – Implement one national Building Machinery organic measures as Repair Center • Improve profit well as outsourcing – Further develop effective pricing and and acquisitions discount policy • Improve profitability – Prioritize investments to product areas and return on where the profitability opportunities are investment greatest – Sharp cost control and defined KPIs p 53
Scandinavia customer case example No. 1: Kiruna LKAB • Cramo is helping to construct a new iron pellets factory for LKAB in Kiruna. • Cramo’s contract includes the rental of machines and equipment to NCC, PEAB and subcontractors. • Temporary depot established with a large sortiment of building machinery. • Products / services offered – Site huts – 300 units – Project offices – 80 modulars – Access equipment – about 120 units – Heavy scaffolding – 800 tons – Logistics of incoming material – Responsibility regarding heating • Depot open 7 days a week from 06:00 to 18:00 and also 24 hour on-duty support • Project extends from 2005 into 2008 p 54
Scandinavia customer case example No. 2: JM • Cramo is helping JM, the fourth largest construction company in Sweden in all of its equipment rental needs • Cramo made an equipment fleet outsourcing deal in 2000 with JM – Cramo delivers all equipment in use by JM • JM is a demanding customer with a high focus for example on environmental consciousness – Cramo must be able to offer superior customer service and be at the forefront of environmental issues. p 55
Equipment rental Scandinavia – Summary • Although construction growth is expected to level off somewhat compared to 2006, the positive market position is expected to continue • Continuous focus in efficient fleet management and in further developing the customer-driven organisation • Be a forerunner in further developing rental concepts and services • Targets: – Strengthen the market leadership position in Sweden, while growing into #1 or #2 position in Norway and Denmark – Improve profitability especially in Norway and Denmark p 56
Cramo Plc Capital markets day Equipment rental Finland Tatu Hauhio, SVP Helsinki, June 14, 2007
Cramo Finland overview Cramo Finland organization Share of Group sales (2006) Finland 15 % Cramo Finland Tatu Hauhio, SVP Sales (2006): EUR 60,2 m Employees (2006): 449 Depots (2006): 62 Finance Support Pirjo Wuorenheimo Equipment rental Site services Olli Heire Mika Helenius Share of Group EBITA (2006) District South Diamond sawing & drilling Finland 13 % District East Drying & heating District West Floor grinding and milling District Middle Electrification District North-West Scaffolding District North Concrete placing p 58
Overview of products and services in Finland Equipment rental Building machinery Construction machinery Aerials and forklifts Site infrastructure Site services Drying & Heating Diamond drilling Other services, including • Dust control • Infrared photography • Assembly Scaffolding Floor grinding and milling Electrification Concrete placing p 59
Sales mix Split by product group and customer segment Sales by product group, 2006 Sales by customer segment, 2006 Building machinery Merchandise Other rentals sales and other 8 % 16 % 21 % Construction machinery Households rentals 18 % 2 % Construction Public sector industry 7 % Site set-up 60 % Aerial and forklift infrastructure and rentals Other industry services 28 % 7 % 33 % p 60
Equipment rental operations in Finland Key activities 2006 - 2007 Finland – 63 depots (3/2007) • Integration of RK, SPV and Cramo Suomi 63 depots (5 franchise) • Launch of the new Cramo brand in Finland • Equipment rental operations transferred to Cramo Finland Oy • Two acquisitions (asset transfers) in 2007 – Jyväskylän Konevuokraamo – JM-Alltrans • Heating installation rolled out to the whole country • Electrification services being started up • Sales process and sales training for the whole personnel dealing with customers • Specific focus area: Other industry sales p 61
Financial performance Equipment rental Finland Quarterly sales, 2005-07 Quarterly EBITA, 2005-07 Y-o-Y EBITA % growth 8,0% +18,0% 2007 07/06 Y-o-Y EBITA % growth 4,8% 22,6% 26,4% 12,3% +13,5% +2,5% -0,4% +8,4% 2006 06/05 18 6 16,6 16,6 15,8 16 15,3 4,9 14,9 5 14,8 14,5 4,4 14 12,6 4 12 3,5 11,1 m) m) R (EUR 3,0 Quarterly sales (EU 10 3 ITA Quarterly EB 2,1 8 1,9 2 6 1,2 1 4 0,6 2 0 Q1 Q2 Q3 Q4 -0,2 0 Q1 Q2 Q3 Q4 -1 2005 2006 2007 2005 2006 2007 p 62
Key market trends Construction market trends Residential vs. non-residential constr. 10 % 8,7 % • Year 2006 marked a third consecutive year of solid construction Year-on-year change in construction output RT*: +3,5% 7,5 % 8 % 7,1 % 7,0 % growth in Finland in 2007 5,5 % 6 % • Estimates for construction in 2007 differ: Euroconstruct 1,4% 4,4 % growth rate; RT* updated its growth forecast to 3,5% in April 4 % 2,9 % • Residential construction growth is expected to stabilize in 2007 2 % 0,9 % 0,8 % – Highest growth period expected to be over 0 % – Strong economy and migration keep up a good level of activity 2003 2004 2005 2006E 2007F -2 % • Non-residential construction is expected to continue developing favourably in 2007, driven by office and storage buildings -4 % Office buildings +23% • New construction growth rate expected to decline due to -6 % -5,5 % Storage buildings +7% residential construction and civil engineering, but renovation -8 % activity expected to develop favourably Residential construction Non-residential construction Equipment rental trends New construction vs. renovation 7 % 6,5 % Year-on-year change in construction output • Growth in equipment rental expected to remain higher than in 6 % the construction industry 4,9 % 5 % – Rental penetration rates are increasing moderately – Rental-related services expected to continue growing 4 % 3,4 % 3,2 % 2,9 % 2,9 % 3 % 2,4 % 2,3 % 2 % 0,8 % 1 % 0 % 2003 2004 2005 2006E 2007F -0,6 % -1 % New construction Renovation Source: Euroconstruct, December 2006 *RT, Confederation of Finnish Contruction Industries, change in total construction volume p 63
Competitive position in Finland Company Company type Coverage Market position* Ramirent 1. General rental National, 94 depots Cramo 2. General rental National, 63 depots 6 depots across the Telinekataja Scaffolding specialist 3. country Lifting equipment 13 depots across the Pekkaniska 4. specialist country 4 depots around Hämeen Rakennuskone General rental Tampere, 1 in Lahti 5. and 1 in Tuusula 4 depots in Vatupassi General rental 6. Eastern Finland and 1 in Espoo Cramo is a strong # 2 on the Finnish equipment rental market * Cramo management estimate of the market positions on the general equipment rental market p 64
Opportunities and challenges in Finland Opportunities Challenges • Inorganic growth opportunities exist • Construction market growth may stabilise somewhat after several good – Outsourcing of machine fleets held by years construction companies – Acquisitions of local / regional – Residential construction showing equipment rental companies signs of slowing down • Growth potential in rental-related – Healthy increases in commercial construction off-setting weakening services, including residential segment – Electrification • In the current positive market – Scaffolding environment, construction companies • Possibility to improve rental utilization tend to also build up own equipment rates fleet – Increased focus on fleet management – Limits the growth of rental penetration p 65
Strategic priorities and targets Strategic priorities Targets • Grow and increase market share – Both organically and through selected acquisitions – Grow in rental-related services by improving the service offering • Improve profitability – Complete the rental product offering from year 2006 level • Implement world-class fleet management • Solid growth both – Create a hub structure through organic – Implement fleet management / optimization measures as well as projects outsourcing and – Take advantage of cutting-edge acquisitions technologies which facilitate fleet management, such as RFID and GPS • Increase market share • Improve customer orientation – Roll out a new sales process – Roll out a new employee competence development model – Develop segment-based offerings p 66
Finland customer case example: Peab-Seicon • Cramo Finland has a long relationship with Peab Seicon – In 2006, Cramo and Peab Seicon deepened their business relationship within equipment rental in order to achieve a streamlined rental process and efficient equipment deliveries • 2006 Peab Seicon and Cramo agreed on a new delivery model already applied in Sweden – In April 2006, Cramo bought Peab Seicon’s equipment in Northern Finland and became their only rental equipment supplier in the area – In Southern Finland, Cramo is the sole supplier for Peab in addition to their own machinery fleet • The agreement is in place for 5 years p 67
Equipment rental Finland – Summary • After 2006 integration work Finland is now back on the growth path – Growth faster than the market – Two acquisitions completed in early 2007, further targets investigated – Profitability improving • Improved customer orientation – New sales process – Training for personnel – Marketing efforts on specific segments • New products and services introduced, for example – Electrification – Compact construction equipment • Focus on fleet management – Improving utilization rates – Investigating and piloting new technologies p 68
Cramo Plc Capital markets day Equipment rental Other Europe Jarmo Laasanen, SVP Helsinki, June 14, 2007
Equipment rental other Europe overview Equipment rental Other Europe organization Share of Group sales (2006) Other Europe Jarmo Laasanen, SVP Sales (2006): EUR 38,4 m Other Europe Employees (2006): 358 9 % Depots (2006): 38 Business development Cramo Estonia Cramo Poland Share of Group EBITA (2006) Ivar Valdmaa Bernard Michalczewski ZAO Cramo Cramo Latvia (St. Petersburg) Uldis Rungevics Alexander Pigoltsin Other Europe Maropol Cz s.r.o. 15 % Cramo Lithuania (Czech Republic) Darius Norkus Bogdan Lenda p 70
Overview of products in Other Europe Equipment rental Building machinery Aerials Building site facilities Construction machinery p 71
Sales mix Split by product group and customer segment Sales by product group, 2006 Sales by customer segment, 2006 Merchandise sales Households Other and other Public sector 3 % 1 % 6 % 3 % Other industry 2 % Aerial and forklift rentals Building machinery 25 % rentals 45 % Site infrastructure and setup services Construction Construction 15 % industry machinery rentals 91 % 8 % p 72
Equipment rental operations in Other Europe Key activities 2006 - 2007 Other Europe – 43 depots (3/2007) St.Petersburg prepared to catch the growth • 1 depot – New management and sales in place – Investments more than doubled 17 depots – Second depot will be opened this summer Estonia integrated and gaining more growth • 4 depots – Solid market leadership position – Asset purchase from B&MM in Tallinn 10 depots completed, one more depot added Latvian depot network has grown through • greenfield so far Lithuania achieved market leadership • – Acquisition of Aukstumines Sistemos 10 depots completed – Coverage more than doubled to 11 depots in 1 depot six months, heavy equipment HUB started – Company winning market continuously p 73
Equipment rental operations in Other Europe Key activities 2006 - 2007 Other Europe – 43 depots (3/2007) Poland integration and development proceeding • 1 depot – Access equipment rental market leadership position achieved – Maropol operation (acquired 03/2006) 17 depots integrated into Cramo Access division (Säve) – Three new depots opened in 2007 so far 4 depots – Integration of three companies started Czech market opened by Maropol acquisition • 10 depots – New access equipment depot established, new big projects awarded (e.g. Hyundai) ____________________________________________ • Cramo Rebranding progressing in all countries – Particular impact in St. Petersburg and Poland 10 depots • Expansion opportunity search in existing and new markets ongoing 1 depot • Equipment investment levels increased from 2006 significantly in all CEE markets p 74
Financial performance Equipment rental Other Europe Quarterly sales, 2005-07 Quarterly EBITA, 2005-07 Y-o-Y EBITA % growth 25,1% +71,5% 2007 07/06 Y-o-Y EBITA % growth 14,5% 22,2% 39,3% 39,3% +71,2% +80,4% +65,2% +57,1% 2006 06/05 14 5 4,6 4,5 11,7 12 11,4 10,8 4 10 9,0 R m) m) 3 R (EU Quarterly sales (EU 8 2,7 7,4 ITA 6,9 Quarterly EB 6,3 2,2 6 2,0 2,0 2 5,0 3,7 4 1,1 0,9 1 0,8 2 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2005 2006 2007 2005 2006 2007 p 75
Key market trends Construction market trends Construction growth rates Residential Non-residential Civil engineering • Year 2006 was a year of strong construction growth in all 0 % 5 % 10 % 0 % 20 % 40 % 0 % 10 % 20 % 30 % CEE markets where Cramo operates • In St. Petersburg, construction is expected to develop strongly 10,0 % 30,0 % 30,0 % Estonia a – Residential segment still strong 15,0 % 10,0 % 15,0 % – Major commercial/industrial projects announced and underway, including several automotive factories • Poland continues strong growth 40,0 % 10,0 % 15,0 % a Latvia – Lot of civil engineering projects underway 10,0 % 15,0 % 10,0 % – Residential construction increasing • EU funding in the new EU member countries facilitates the financing of construction projects 15,0 % 10,0 % 15,0 % Lithuania a • Cramo is watching potential overheating in the Baltics 10,0 % 5,0 % 10,0 % – Latvian government taking action to cool down the economy 4,4 % 7,2 % 18,7 % Poland d Equipment rental trends 5,2 % 3,0 % 17,3 % • Demand for equipment rental in the CEE area is boosted 7,1 % -0,3% 10,0 % Czech by the strongly growing construction segment Republic c 5,9 % 5,4 % 2,0 % • Particularly the presence of international construction firms increasing the usage of rental 8,0 % 8,0 % 8,0 % – Western companies more used to equipment rental Russia* * 6,0 % 6,0 % 6,0 % • Equipment rental penetration rate is increasing in all markets within CEE 2006E 2007F 2006E 2007F 2006E 2007F Source: Euroconstruct, December 2006 p 76
Competitive position in Other Europe (1/3) Company Company type Coverage Market pos.* 17 depots across the Cramo 1. General rental country Estonia 13 depots across the Ramirent 2. General rental country Construction machinery Kaurits 3. 1 depot specialist 17 depots across the Ramirent General rental 1. country Latvia 8 depots in STATS General rental 2. major cities 3 depots in Riga and Cramo General rental 3. 1 in Liepaja Cramo is a strong # 1 in Estonia and # 3 in Latvia * Cramo management estimate of the market positions on the general equipment rental market. p 77
Competitive position in Other Europe (2/3) Company Company type Coverage Market pos.* 10 depots across the Cramo 1. General rental country Lithuania 8 depots across the Ramirent 2. General rental country General rental and sales Kurt Koenig 3. 3 depots 25 depots across the Ramirent General rental 1. country Poland Construction machinery 14 depots across Bergerat M. (CAT) 2. specialist the country 10 depots across Cramo General rental 3. the country Cramo is # 1 in Lithuania and # 3 in Poland * Cramo management estimate of the market positions on the general equipment rental market. p 78
Competitive position in Other Europe (3/3) Company Company type Coverage Market pos.* Ramirent 1. 3 depots General rental St. Petersburg Cramo 1 depot 2. General rental Pekkaniska 3. Powered access rental 1 depot Cramo is # 2 in St. Petersburg * Cramo management estimate of the market positions on the general equipment rental market. p 79
Opportunities and challenges in Other Europe Opportunities Challenges • Competition increasing in certain countries • Increased investments in all the Baltic countries and Poland to boost our growth – Possible impact on price levels and to strengthen our market position • Lack of good acquisition candidates constraining growth through acquisitions • Good development in the Czech continues • Low rental penetration rates • Rebranding Cramo in Q2 gives good market visibility – Knowledge and acceptance of the benefits of rental limited in some areas – Increased sales activities in St. Petersburg and Poland – Inefficient and unsafe working methods still • Large demand for site huts continues in all acceptable to some extent, but not for long markets • Ability to find good, motivated resources • Market window is open in Russia – Salary levels increasing quickly – Organisation strengthened and investments increased – Second depot will be opened during 2007 in St. Petersburg – Entries planned into new Russian cities • New general rental depots opened in 2007 – 3 in Poland – 4 in Baltics • New markets under study p 80
Other Europe customer case example 1: MEGA-IKEA, Saint Petersburg • The best known shopping mall in Saint Petersburg – Project investment – 500 million US dollars – Shopping area – 220.000 square meters: IKEA, OBI, ASHAN • CRAMO Business: – Total rented equipment 250 units – Total rental revenue > 660.000 US dollars – Rental agreements with 12 customers who worked in this project • Main contractor Renaissance Construction • Russian and Turkish subcontractors p 81
Other Europe customer case example 2: ProLogis logistic centres, Wroclaw and Chorzów, POLAND • ProLogis is the world’s largest owner, manager and developer of distribution facilities – More than 40 million square meters of industrial space in 103 markets across NA, Asia and Europe • CRAMO relationship: – Since many years the market leader SAVE Sp. z o.o. has participated in ProLogis projects in Poland – Continuous delivery of access equipment in volumes to the customer and its subcontractors p 82
Equipment rental Other Europe – Summary • Favourable business environment expected to continue • CEE area is expected to experience sustained, strong growth • Excellent opportunities to increase market share in Central and Eastern Europe • The whole Group CEE organisation is tuned to look for growth, supported by group management and support functions • Main targets – To maintain strong profitable growth – To become in #1 or #2 in each of the CEE markets entered – To enter into new growth markets within CEE – To be the first choice rental company to our customers – Continue to be the best rental company to work for p 83
Key to success: Cramo Other Europe Team With a Passion to grow ! p 84
Cramo Plc Capital markets day Modular space Ossi Alastalo, SVP Helsinki, June 14, 2007
Cramo Modular Space overview Cramo Modular Space Organization Share of Group sales Modular space Cramo Modular Space 16 % Ossi Alastalo, SVP Sales (2006): EUR 65,5 m Employees (2006): 194 Locations (2006): 13 Modular Space Management Group Ossi Alastalo Camilla Hensäter Jan Lundberg Share of Group EBITA Rental Production Modular space 18 % Cramo Master Cramo Instant Finland manufacturing plant Parmaco Cramo Instant Sweden manufacturing plant Cramo Instant Norway Cramo Instant Denmark p 86
Overview of products and services Modular Space Offices Schools Day care and care homes Manufacture and sales of site huts and halls Related services, such as facilities management, customer support and architectural design services p 87
Sales split by application group and customer segment Sales by application group, 2006 Sales by customer segment, 2006 Construction Sales of site huts and modules Selling modules industry 15 % 9 % Sales of halls Selling halls 11 % Public sector 45 % Industry 46 % Rental Rental of modules 74 % 74% p 88
Operations in the Nordic countries Key activities 2006 - 2007 Cramo Modular Space – 13 locations • New business structure for modular space • Increased co-operation between units – Benchmarking, best practises – Development of new common fleet • Development of new rental services and concepts • Improved utilization rate, resulting in improved profitability • Increased manufacturing capacity • Re-organization of manufacturing to better serve rental business • Increased sales of halls • Intensifying operations in Norway and Denmark Sales offices, depots and factories p 89
Financial performance Quarterly sales, 2005-07 Quarterly EBITA, 2005-07 Y-o-Y EBITA % growth 26,7% +25,5% 2007 07/06 Y-o-Y EBITA % growth 19,6% 18,9% 27,0% 24,8% +11,0% +2,4% +21,2% +15,1% 2006 06/05 25 5 4,8 4,7 4,5 20 4 19,2 3,6 17,8 3,4 16,7 16,6 3,2 15,5 Quarterly EBITA (EUR m) 15,1 Quarterly sales (EUR m) 2,9 15 3 14,2 2,8 2,8 13,8 12,8 10 2 5 1 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2005 2006 2007 2005 2006 2007 p 90
Key market trends Summary of markets Population (Mln.) GDP (Bln. €) Estimated market size (Mln. €) Finland 5,2 164,5 15 Sweden 9,1 300,1 65 Norway 4,7 241,6 25 Denmark 5,4 215,8 20 Baltic countries 7,2 44,5 - Poland 38,5 256,3 - Modular Space rental trends Order Book 120 100 % 90,9 % 90,4 % 90,4 % 89,5 % 89,4 % • Growth and ”creation” of market due to pro-active 90 % Share of rental (% of total order book) approach to marketing and sales 77,9 % 100 80 % 10,4 • Effects of globalization visible 70 % Order book (EUR m) 80 7,5 – Personnel in customer organizations moving from ”blue 8,3 7,5 60 % 7,0 collar” to ”white collar” 60 50 % – Migration to larger cities and towns continues, need for 40 % 87,2 flexible space solutions increases in both ends 40 74,5 30 % 69,9 70,2 65,7 • Changes in demographic structure, large portion of 6,9 20 % 20 population in need of secure accomodation and care- 24,2 10 % home services 0 0 % 12/05* 3/06 6/06 9/06 12/06 3/07 • Need for flexibility increases in use of facilities Rental Sales Share of rental *RK figure p 91
Modular Space – Nordic countries Country/competitors Our offering Our coverage Our position* FINLAND: Customized buildings National: Marginal competitors mainly Rental of modular space 1 office 1. focusing on sales operations Manufacturing 2 manufactures SWEDEN: National: Rental of standardized Temporent 6 sales offices modular space systems 1. Expandia 1 ware house Indus 1 depot NORWAY: Rental of standardized National: Indus modular space systems 1 sales office 2. Temporent 1 depot Malthus DENMARK: National: Rental of standardized Temporent 1 sales office modular space systems 3. Bilsby Cramo’s Modular Space is #1 in the market in the Nordic countries * Cramo management estimate of the market positions on the modular space rental market. p 92
Opportunities and challenges in Modular Space Opportunities Challenges • Organic growth • Fullfilling all technical requirements regarding building permits etc. – New applications – Increased penetration rate • Organisation • Creating markets, – Creating a coherent culture conversion within Modular Space – Profiling business as a service – Fully utilising best practices • Developed product-service potfolio • New markets – Baltic countries, Poland etc. • Acquisitions • Increased co-operation between units – Benchmarking, best practises – Development of new common fleet p 93
Strategic priorities and targets Strategic priorities Targets • Increase rental business – Create new markets, conversion of customers – Increase share of existing markets – Gradually reduce module sales to customers • Realise sustained � replaced by rental contracts profitable growth – Development of product and service offering • Keep the current to different segments market position • Content of product/service portfolio • Create new markets • Create new customer • Efficient fleet management value p 94
Modular Space customer case example No. 1: Nycomed - Denmark • Cramo Instant in Denmark solved office space problems of Nycomed Denmark A/S, the Danish subsidiary of a large international pharmaceuticals company • Nycomed currently rents two modular office buildings consisting of • A total of 96 modules • 2,600 sqm of office space • First contract was signed in 2001 and the contracts are expected to expand into 2008 p 95
Modular Space customer case No. 2 : Kongsberg - Norway • Cramo Instant in Norway solved office space shortage problems of Kongsberg Næringspark AS, which is responsible for all real estate matters and maintenance for the Kongsberg Group. • In total, Kongsberg Næringspark AS rents currently three office buildings from Cramo Instant – Currently 164 modules – The latest project with 96 modules is being assembled – 7,000 sqm of office space • Contract periods vary between 24 and 60 months. p 96
Modular Space customer case No. 3 : Uppsala Municipality - Sweden • In 2006, Cramo Instant’s project team in Stockholm helped Uppsala Municipality to fulfil the demand for schools • Two new pre-schools were assembled – Consisting of 100 modules – Hosting approximately 300 children and pre- school teachers. • Along with these new projects, Uppsala is also renting another six modular buildings used for school and pre-school premises, i.e. 224 modules in total (6,700 sqm). • Uppsala Municipality is now one of Cramo's largest modular space customers in Sweden. • Most contracts were signed for 60 months and will not be returned until 2011-2012. p 97
Modular Space customer case No. 4 : City of Helsinki - Finland • Cramo Instant in Finland helped the Department of Social Services in Helsinki to solve the following problems – Housing for elderly people during a major renovation at the Kustaankartano care-home facility – Flexible way of obtaining more space for the rapidly growing number of occupants • 1,600 sqm of Cramo Instant Patina-system buildings were assembled. – Fully equipped for use with bedpatients and connected with other buildings in the area. • The first rental contract for 5 years was signed in march 2003. – Contract extended by 10 years in March 2007, currently ending in 2018 – Another 5 years as an option for the customer. p 98
Modular Space – Summary Modular Space – Powering your business • Rental of flexible space; just tell us when, where and for how long? • Wide-range product/service portfolio for different kinds of needs • Frees up customers’ capital and assets to core business and activities • Target: Sustained profitable growth in the Nordics, evaluation of potential entry into the CEE area p 99
Cramo Plc Capital markets day Financial overview, investments and KPIs Martti Ala-Härkönen, CFO Helsinki, June 14, 2007
Recommend
More recommend
