CRAMO H1 2019 PRESENTATION 15 th August 2019 Leif Gustafsson, CEO Aku Rumpunen, CFO
FULL FOCUS ON EQUIPMENT RENTAL GOING FORWARD 30 June Capture the full potential of the focused Adapteo demerger successfully completed equipment rental business 2
BENEFITS OF THE PARTIAL DEMERGER FOR CONTINUING BUSINESS Stand-alone company with growth ambition providing a clarified investment case with different risk and growth profile Clear business structure and solid financial position Management focus on ample opportunities to improve operational efficiency, competitiveness and value creation Increased opportunities and attention to optimise profitability and cash generation Solid customer base and European platform empowering continued investments into development of the ER business 3
Q2/2019 KEY FIGURES ▪ Net sales : 153.1 (156.1) MEUR ▪ -1.9% in reported currencies ▪ -0.4% in local currencies ▪ -0.4% organic sales growth ▪ Comparable EBITA* : 15.3 (22.4) MEUR or 10.0% (14.3%) of sales ▪ EBITA* : 14.4 (22.4) MEUR or 9.4% (14.3%) of sales ▪ Gross capex : 30.0 (55.5) MEUR ▪ Operative cash flow : 36.0 (37.8) MEUR ▪ Cash flow after investments : 23.7 (8.3) MEUR * Cramo’s continuing operations. 2018 EBITA including IFRS16 impact 4
INITIATION OF PERFORMANCE IMPROVEMENT ACTIONS Targeted run-rate cost savings ▪ In order to right- size the Group’s cost structure upon demerger of Adapteo and to ensure the Group’s profitability in the short-term, various performance improvement actions €10 -12m are initiated and carried out. These include: ▪ Group structure optimisation ▪ Specific sales efforts ▪ Cost reductions Estimated restructuring costs in 2019 ▪ Capital efficiency measures in all countries ▪ In addition, investments in growth will continue to increase € 3-5m our market share and optimise our profitability and cash generation ▪ The new strategy finalized to ensure Cramo’s competitiveness in the long-term ▪ More information about the new strategy, group-wide Estimated timeline for full effect performance enhancement programme and the new financial targets will be presented during our Capital Markets Year 2020 Day on 12 September 2019.
CONSTRUCTION MARKET GROWTH STILL EXPECTED IN NORWAY AND EASTERN EUROPE 2019E 2020E Construction output outlook Sweden -3.2 % -2.9 % 140 Finland -1.9 % -2.6 % Norway 4.7 % 1.9 % 135 Central Europe 0.6 % -0.3 % 130 Eastern Europe 7.8 % 3.9 % 125 ▪ Index, 2015=100 According to Euroconstruct 120 estimates the construction market 115 growth is seen to be levelling out in Sweden, Finland and Germany 110 105 ▪ Growth in Norway is still seen to be strong – main driver civil 100 engineering 95 ▪ Growth in Eastern Europe is also 90 seen to continue strong – Estonia 2015 2016 2017 2018 2019 2020 2021 growth levelling out whereas Sweden Finland Norway Central Europe Eastern Europe Poland and Lithuania growth continues strong 6 Sources: Euroconstruct and Forecon
Q2 SALES AND COMPARABLE EBITA COMPARABLE EBITA * BELOW LAST YEAR’S LEVEL EUR million EUR million 180 6.5 % 8% 35 25% 19.9 % 30 170 6% 15.0 % 4.4 % 20% 3.1 % 3.0 % 14.3 % 3.2 % 25 160 4% 15% 20 10.4 % 8.0 % 10.0 % 150 2% 31.7 172.4 15 10% 25.8 140 0% 159.6 22.4 156.1 10 153.1 148.4 15.3 14.9 5% 143.8 11.8 130 -2% 5 -1.9 % -0.4%** 0 0% 120 -4% Q1 Q2 Q3 Q4 Q1 Q2 Mar Jun Sep Dec Mar Jun 2018 2019 2018 2019 Total sales Sales growth q-o-q Comparable EBITA Comparable EBITA margin-% * Comparison period including IFRS16 impact ** in local currencies 7
BUSINESS SEGMENTS 8 8
SCANDINAVIA TIMING OF PROJECTS IN SWEDEN AFFECTED NEGATIVELY ON PROFITABILITY, GOOD PERFORMANCE CONTINUED IN NORWAY Organic growth -5.4%* vs LY Sales EUR million • Postponed large industrial projects into H2 in Sweden, 105 unfavorable SEK fx-rates and fewer business days in Q2 vs 100.1 100 2018 impacted negatively on sales performance against last 95 92.2 year. Second quarter sales in Norway were on a good level 91.2 89.4 supported by improved utilisation and increased investments 90 86.9 84.1 85 -7.8% • In Sweden various performance improvement actions, like 80 cost base optimisation, fleet and operational efficiency 75 improvements and sales measures are on-going to secure Q1 Q2 Q3 Q4 Q1 Q2 profitability going forward. 2018 2019 • According to Forecon, equipment rental market is expected to EUR million decrease by 1% in 2019 in Sweden and and increase by 2% in 25 18% 16.9 % 17.2 % 17.2 % Norway. 16.8 % 20 16.4 % 17% 15.3 % 15 • In Sweden market growth is levelling out. The decline in new 16% 20.9 10 19.4 17.1 17.4 building construction (residential and non-residential) is 15.4 15% 12.0 5 expected to continue, but in the industrial segment good 0 14% potential is seen. In Norway main market growth drivers are Q1 Q2 Q3 Q4 Q1 Q2 civil engineering and hospitals (public spending). 2018 2019 Comparable EBITA Comparable ROCE All figures exclude IACs and are presented as comparable key figures including IFRS 16 impact Scandinavia has operations in Sweden and Norway with capital 9 * Organic growth reported in local currencies employed of MEUR 417 at the end of Q2 2019.
FINLAND AND EASTERN EUROPE STRONG PERFORMANCE IN EASTERN EUROPE, IN FINLAND PROFITABILITY BELOW EXPECTATIONS Sales EUR million Organic growth +0.2%* vs LY 50 • Q2 sales growth was modest and were supported by 39.8 38.9 40 35.6 35.7 operations in Estonia and Lithuania. Organic sales growth 33.5 32.7 for the second quarter was flat and came to 0.2%. 30 20 • Q2 comparable EBITA 0.5 MEUR below last year’s level. +0.1% Higher direct costs in Finland diluting segments profitability. 10 0 • In Finland cost base optimisation, fleet and operational Q1 Q2 Q3 Q4 Q1 Q2 efficiency measures and sales actions are ongoing. The 2018 2019 business transformation project in Finland has been concluded and results should be visible from H2 2019 EUR million onwards. 10 16% 11.8 % 11.3 % 10.1 % 10.1 % • 8 Forecon estimates Finland rental market to decline in H2 9.8 % 12% 9.5 % 6 2019, whereas in other countries in the segment market 8% 8.7 4 7.5 growth is still estimated 4% 4.7 2 4.2 2.7 2.0 0 0% Q1 Q2 Q3 Q4 Q1 Q2 2018 2019 Comparable EBITA Comparable ROCE Finland and Eastern Europe has operations in four countries with All figures exclude IACs and are presented as comparable key figures including IFRS16 impact 10 capital employed of MEUR 223 at the end of Q2 2019. * Organic growth reported in local currencies
CENTRAL EUROPE SALES GROWTH DRIVEN BY INDUSTRIAL PROJECTS Organic growth +14.0%* vs LY Sales EUR million • 40 The second quarter sales growth was mainly attributable to 33.7 33.4 32.5 KBS Infra 29.3 30 25.5 • Q2 comparable EBITA was EUR 1.9 (2.8) million with a 18.8 20 5.6% (9.6%) margin. Main reason for declined profitability +14.0% was change in sales mix and extraordinary costs related to 10 the organisational transformation of KBS Infra decreased the segment’s profitability by EUR 0.7 million 0 Q1 Q2 Q3 Q4 Q1 Q2 • The underlying performance in Germany has not reached 2018 2019 our targets. Various focused performance improvement EUR million actions such as cost base optimisation, fleet and operational efficiency measures and sales actions are 5.1 % 5.2 % 9 6% ongoing to increase the profitability of business. 4.6 % 4.5 % 4.2 % 3.9 % 6 4% • Euroconstruct estimates that total construction output 3 5.7 growth in Germany and Austria will slow down 2.8 2.6 1.9 2% 0 -1.7 -2.1 -3 0% Q1 Q2 Q3 Q4 Q1 Q2 2018 2019 Comparable EBITA Comparable ROCE Central Europe has operations in five countries with capital All figures exclude IACs and are presented as comparable key figures including IFRS 16 impact 11 employed of MEUR 185 at the end of Q2 2019. * Organic growth reported in local currencies
GROUP PERFORMANCE Q2 2019 12
GROUP Q2 AND H1 SALES GROWTH VS LY EUR million EUR million 175 -0.7 -2.3 350 1.2 -5.9 6.3 150 300 125 250 -1.9% +0.5%, 100 200 -0.4%* +2.6%* -0.4%** 156.1 +0.4%** 153.1 75 150 299.9 301.5 100 50 50 25 0 0 H1/2018 Acquisitions Organic FX impact H1/2019 Q2/2018 Acquisitions Organic FX impact Q2/2019 growth growth Group Sales drivers Group Group Sales drivers Group * in local currencies ** organic growth 13
COMPARABLE EBITA Q2 VS LY TIMING OF LARGE INDUSTRIAL PROJECTS IN SWEDEN HAD MATERIAL IMPACT ON EBITA EUR million 25 -5.4 20 -0.5 -1.0 -0.2 15 22.4 10 15.3 5 0 Q2 2018 Scandinavia Finland and Central Non-allocated and Q2 2019 Eastern Europe elim Group Business segments Group Comparable EBITA * Comparison period including IFRS16 impact 14
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