CRAMO PLC How can Cramo grow in the coming five years Handelsbanken - PowerPoint PPT Presentation

CRAMO PLC How can Cramo grow in the coming five years Handelsbanken Nordic Mid/Small Cap Seminar 2016 Stockholm 8 June 2016 CFO Martti Ala-Härkönen FOR A GREAT DAY AT WORK

Cramo in brief Finland A leading European equipment rental service company  Cramo is the second largest equipment rental service companies in Norway Europe, with operations in 14 countries and 2015 sales of EUR 668 Russia Sweden million Estonia  Cramo is also the no.1 player in both construction and non- Denmark construction modular space in the Nordic countries Latvia  In 2015, Cramo posted EBITA before NRIs of EUR 86.8 million Lithuania Kalinin- grad (13.0% of sales) Belarus  The company operates under the Cramo brand in all its operating Poland Germany countries and in Russia and Ukraine under the Fortrent brand Czech (50%-owned joint venture) Ukraine Republic  In addition to its strong market position and brand, Cramo’s key Slovakia Austria Moldova strengths are its extensive rental concept combined with a flexible Hungary Romania Slovenia business model and operational efficiency Croatia  Cramo's 2,500 employees serve over 150,000 customers Bosnia and Serbia  14 countries + Fortrent Cramo was founded in 1953 and it is listed on the Helsinki Stock Bulgaria Herzegovina in Russia and Ukraine Macedonia Exchange Number of depots 328 Albania 2015 sales by industry segment 2015 sales by product group* 2015 sales by business segment 15,0 % 8% Equipment rental: Tools rental 4% 17 % 2 % Finland Construction industry 12% 25 % 15 % Equipment rental: Access Sweden Other industry rental 4 % Equipment rental:Construction Norway Public sector 21% ecq. rental 54 % Denmark 10 % Equipment rental: Site huts Households rental Central Europe 25 % 18 % Equipment rental: Rental Other 49 % 10 % related and other services Eastern Europe 10 % Modular space: Rental and services * For modular space product area, sales include rental and rental related sales. For equipment rental, rental sales allocated to product areas 2

Leading indicators positive Cramo has a favorable geographical exposure towards stronger European economies Construction output* Construction confidence** 60 Construction output (% 2015E 2016F 2017F 2018O change in real terms) Construction Confidence Indicator (mean-adjusted) -0,3 % 3,2 % Finland 0,6 % 0,9 % 40 (-1,0 %) (+3,5 %) 5,5 % 2,8 % Sweden -0,3 % 2,2 % 20 (+9,0 %) (+4,0 %) 2,4 % 3,9 % 2,1 % 2,6 % Norway (+1,8 %) (+4,2 %) (+2,2 %) 0 1,3 % 2,3 % 2,7 % Denmark 2,8 % (+1,6 %) (+2,5 %) (+3,2 %) Germany 0,4 % 2,0 % 1,1 % 0,3 % -20 Austria 0,2 % 1,0 % 1,3 % 1,3 % Estonia -3,8 % 2,4 % 3,4 % 2,1 % -40 Latvia -11,0 % 1,2 % 5,8 % 5,6 % Lithuania 3,5 % 1,1 % 3,7 % 3,3 % -60 Poland 5,6 % 7,4 % 8,3 % 7,7 % Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Czech Republic 7,4 % 3,3 % 3,4 % 4,3 % Slovak Republic 10,3 % -1,1 % 1,1 % 1,1 % Russia -7,9 % -2,6 % 2,7 % 7,0 % Finland Sweden Germany Denmark Poland Europe Sources: Euroconstruct, December 2015 and Forecon, December 2015 Country-specific data in brackets includes: Finland - Rakennusteollisuus RT (April 2016); Sweden - Sveriges Byggindustrier 3 (February 2016); Norway – Prognosesenteret (March 2016); Denmark - Dansk Byggeri (February 2016) ** Source: European Commission, April 2016

Megatrends supporting growth in rental services EQUIPMENT MODULAR MEGATRENDS RENTAL SPACE GROWTH DRIVERS DRIVERS Outsourcing - Increasing rental penetration Economic benefits, Dynamic, changing Growth in new services and change in mindset environment solutions creates demand Migration Growth in rental- Accelerating technological Globalisation Greater preference Urbanisation related services Growth of rental and development Digitalisation for total solutions Site-specific space needs Ageing modular space in new during renovation periods sectors Global and local Need to improve demographic changes Sustainability productivity Fluctuating space needs: Increasing rental Environmental and daycares, schools, Switch from manpower penetration, outsourcing climate awareness Quality problems accommodation to machine More stringent Increased energy (mold and moisture) environmental laws and Internet of things, intelligent efficiency in construction End users increasingly require international agreements life-cycle follow-up requirements permanent-like quality to mitigate climate change Ageing of buildings Growth in renovation Need for energy-efficient Multichannel connectivity construction in mature solutions with customers construction markets SOCIETY PUBLIC SECTOR CONSTRUCTION OTHER INDUSTRIES 4

Clear growth potential in rental penetration Rental is a growing industrial services business driven by structural growth drivers Rental penetration and market size* Growth drivers Total market size in Europe EUR 23 bn (2014E) Increasing rental penetration, → Nordic countries EUR 3.2 bn (2014E) outsourcing Penetration (%) Rental-related services Cramo is the clear #1 in the 4,5 % Sweden most advanced rental market EUR 1.5 bn in Europe… Exchange of manpower for machinery 4,0 % 3.6% UK …and has established a EUR 6.9 bn 3,5 % Environmental concerns, energy strong foothold in the 3 rd 2.8% efficiency and sustainability largest market by volume. 3,0 % Renovation construction 2,5 % France Denmark EUR 3.6 bn Germany EUR 0.43 bn EUR 3.5 bn 1.6% 1.8% Demographic changes, immigration 2,0 % 1.4% 1,5 % Norway Capital conservation Finland EUR 0.89 bn 1,0 % Storage space EUR 0.44 bn 1.8% Inventory control 1.6% Rental Presence economics Site downtime 0,5 % No presence Poland Cost control EUR 0.39 bn Disposal costs 0,0 % 0.5% Bubble size describes market volume * Source: European Rental Association, November 2015. Penetration = rental turnover / construction output 5

Rental is sustainable A Sharing Economy Focus on your core Cost efficiency business Share costs with others Machinery is normally and reduce fixed cost non-core Transparency Flexibility Budgeting and control Reduce or expand get easier equipment according to needs Freedom Improved access Turning fixed costs Access to a variety of into variable modern, high quality products and services without keeping stock 6

The Cramo Rental Concept A wide range of rental-related Tailor-made total MODULAR SPACE More than SERVICES RENTAL SOLUTIONS SOLUTIONS 220,000 ranging from different site services, such as for more efficient, safe and environmentally matching the standards rental items proactive site monitoring, construction site sound construction projects. of permanent structures logistics, dust-control and weather-sheltering, to from classrooms and safety-related services, equipment and training. daycare facilities to high-tech offices and INDUSTRIAL PROJECTS accommodation. including infrastructure, offshore and mining. SITE HUTS adaptable for various purposes and capacity needs. Over COMPREHENSIVE 150,000 RANGE OF TOOLS Modern, customers and complete package comprehensive fleet of solutions in building CONSTRUCTION ACCESS equipment. EQUIPMENT EQUIPMENT for any type of assignments, with comprehensive from major road projects to safety solutions for small-scale jobs. working at heights. 7

Cramo’s service offering Services are an important part of being a total rental solutions provider 8

Growth in new services and Worksite logistics service solutions Growth of rental and An example of a new rental-related service modular space in new sectors Multichannel connectivity with customers Worksite logistics services Hauling Logistics All logistics related services from one supplier responsible person Work site cleaning Logistics management/ Interim Warehousing Web application for all work site needs Scheduling with web based application Access control – Forklift with driver Work site efficiency and cost control Cramo Control Transportation from Traffic guidance interim warehouse to work site 9

In Finland, bolt-on acquisition in April 2016 to strengthen the worksite logistics services business Kurottaja- ja Kuljetuspalvelu Parviainen Oy’s business  Founded in 2004, 23 employees  Sales of ~ EUR 3m  Specialising in worksite logistics and telehandler rental with operators  Fleet brands well known in the industry  Main customers: the leading companies in the construction industry 10

Illustration of rental development: Case Finland In Finland, rental market size has nearly tripled in last 19 years 500 Finnish equipment rental market (nominal, EURm) 450 400 350 300 250 200 150 100 50 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014E 2015F 2016F Finnish equipment rental market Source: European Rental Association and Cramo analysis 11