CRAMO Q3 2019 PRESENTATION 31 st October 2019 Leif Gustafsson, CEO Aku Rumpunen, CFO
Q3/2019 KEY FIGURES HIGHLIGHTS ▪ Net sales : 154.4 (159.6) MEUR ▪ The new strategy, Cramo NXT, was launched on 12 September 2019 at the Capital Markets Day. ▪ -3.2% in reported currencies ▪ -1.9% in local currencies ▪ -1.9% organic sales growth ▪ The new financial targets for 2019-2023, and guidance for 2020 (Comparable EBITA > EUR 75 ▪ Comparable EBITA : 26.5 (31.7*) MEUR or 17.2% million) were released. (19.9%*) of sales ▪ Cost program initiated during Q3 proceeding according to plans, and is fully executed by the end ▪ Gross capex : 21.7 (40.5) MEUR of 2019. The targeted run-rate cost savings of EUR 10-12 million visible gradually from the fourth quarter ▪ Operative cash flow : 58.5 (41.6) MEUR of 2019 onwards, and in full effect for 2020 ▪ Cash flow after investments : 39.2 (-8.6) MEUR *including IFRS 16 impact 2
CONSTRUCTION MARKET MARKET IS EXPECTED TO STILL GROW 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 90 2015 2016 2017 2018 2019 2020 2021 expected to continue but at the slower pace Sweden Finland Norway Central Europe Eastern Europe 3 Sources: Euroconstruct and Forecon
Q3 SALES AND COMPARABLE EBITA COMPARABLE EBITA* BELOW LAST YEAR Compared to same period Compared to same period previous year** previous year +5.8% -0.4% -1.9% -20.4% -31.5% -16.3% EUR million EUR million 6.5 % 3.1 % 180 35 25% 19.9 % 4.4 % 3.2 % 3.0 % 30 170 -1.9 % 17.2 % 20% 14.3 % 15.0 % -3.2 % 25 160 10.0 % 15% 10.4 % 20 8.0 % 150 31.7 172.4 15 10% 26.5 25.8 140 159.6 22.4 156.1 10 154.4 153.1 148.4 15.3 14.9 5% 143.8 11.8 130 5 0 0% 120 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2018 2019 2018 2019 Total sales Sales growth q-o-q Comparable EBITA* Comparable EBITA* margin-% * Excluding IACs with IFRS16 impact ** in local currencies 4
BUSINESS SEGMENTS 5
SCANDINAVIA POSTPONED NEW INDUSTRIAL PROJECTS IN SWEDEN AFFECTED NEGATIVELY ON PROFITABILITY, SOLID PERFORMANCE CONTINUED IN NORWAY -6.1% organic Sales EUR million -8.4% reported • 120 Decreasing sales in Sweden due to large industrial projects 100.1 92.2 91.2 ending and new projects being postponed into late Autumn. 100 89.4 86.9 84.1 79.6 Sales development good in Norway led by service sales. 80 60 • Driven by the lower topline in Sweden, the segments 40 comparable EBITA decreased by 16.6%. Ongoing cost 20 savings program is proceeding according to plans. 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 • In Sweden underlying market is still active and growth can be 2018 2019 seen in selected regions and customer segments. Two large -16.6% industrial projects were signed in Q2 and will start contributing EUR million positively from the fourth quarter of 2019. 22.9 % 22.8 % 25 24% 22.5 % 22.2 % 21.6 % • 20 22% In Norway market growth is expected to continue driven by 20.0 % 19.5 % 15 20% growth in civil engineering. 20.9 10 18% 19.4 17.4 17.1 16.1 15.4 • According to Forecon, equipment rental market is expected to 12.0 5 16% decrease by 1% in Sweden and increase by 4% in Norway in 0 14% 2020. Q1 Q2 Q3 Q4 Q1 Q2 Q3 2018 2019 Comparable EBITA Comparable operative ROCE All figures exclude IACs and include IFRS16 impact Scandinavia has operations in Sweden and Norway with operative 6 Organic growth reported in local currencies capital employed of MEUR 306 at the end of Q3 2019.
FINLAND AND EASTERN EUROPE MARKET STABILISATION IMPACTING ON SALES AND PROFITABILITY -1.6% organic Sales EUR million -1.6% reported 50 • Q3 sales decreased by 1.6% driven by all countries except 39.8 38.9 38.3 Lithuania. The market is stabilising in all countries, which is 40 35.6 35.7 33.5 32.7 effecting on sales growth. Sales growth in Poland and Estonia 30 levelled out and remained flat in Finland. 20 • Q3 comparable EBITA amounted to 8.1 (8.7) MEUR. 10 Decrease was mainly due to lower sales performance and 0 different sales mix. In order to ensure future profitability, the Q1 Q2 Q3 Q4 Q1 Q2 Q3 cost savings program kicked off in all countries. 2018 2019 • According to Forecon, the equipment rental market is -4.9% EUR million expected to grow by 2% in Finland in 2020. Growth is expected to come outside new residential construction. 10 20% 15.3 % 14.5 % 12.9 % 12.4 % 8 13.0 % 16% 12.1 % 11.8 % • In Estonia, market conditions are still solid, but growth is 6 12% 8.7 levelling out. In Lithuania the market is expected to grow, but 4 8.1 8% 7.5 4.7 4.2 2 4% at a lower pace. In Poland the equipment rental market is 2.7 2.0 0 0% stabilising. Q1 Q2 Q3 Q4 Q1 Q2 Q3 2018 2019 Comparable EBITA Comparable operative ROCE Finland and Eastern Europe has operations in four countries with All figures exclude IACs and include IFRS16 impact 7 operative capital employed of MEUR 180 at the end of Q3 2019. Organic growth reported in local currencies
CENTRAL EUROPE STRONG SALES GROWTH DRIVEN BY KBS INFRA +8.3% organic +8.3% reported Sales EUR million • 40 36.5 The third quarter sales growth was highly driven by KBS Infra 33.7 33.4 32.5 29.3 30 25.5 • Q3 comparable EBITA was EUR 4.3 (5.7) million with a 18.8 11.7% (17.0%) margin. Main drivers for the lower profitability 20 level were sales mix as well as increased indirect costs and depreciations in KBS due to growth investments. 10 0 • The underlying performance in Germany has not reached our Q1 Q2 Q3 Q4 Q1 Q2 Q3 targets. Various focused performance improvement actions 2018 2019 such as cost base optimisation, fleet and operational efficiency measures and sales actions are ongoing to EUR million increase the profitability of business. -25.3% 9 8% 6.1 % 6.4 % 5.9 % • German construction market growth has been slowing down. 5.1 % 6 4.8 % 4.8 % 6% 4.0 % The market for KBS Infra remains strong and project pipeline 4.3 3 4% 5.7 looks promising. In Czech Republic and Slovakia market 2.8 2.6 1.9 0 2% conditions are more competitive and growth is levelling out. In -1.7 -2.1 Austria and Hungary market outlook has remained good. -3 0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 2018 2019 Comparable EBITA Comparable operative ROCE Central Europe has operations in five countries with operative All figures exclude IACs and include IFRS16 impact 8 capital employed of MEUR 171 at the end of Q3 2019. Organic growth reported in local currencies
GROUP PERFORMANCE Q3 2019 9
GROUP Q3 AND Q1-Q3 SALES GROWTH VS LY EUR million EUR million Q1-Q3 Q3 200 -1.8 6.3 -8.0 -3.0 500 -2.2 150 400 300 -3.2% reported -0.8% reported 100 -1.9% local currencies +1.0% local currencies 459.5 455.9 159.6 -1.9% organic growth -0.4% organic growth 154.4 200 50 100 0 0 Q1-Q3/2018 Acquisitions Organic FX impact Q1-Q3/2019 Q3/2018 Acquisitions Organic FX impact Q3/2019 growth growth Group Sales drivers Group Group Sales drivers Group 10
COMPARABLE EBITA Q3 VS LY EUR million -16.3% 34 -3.2 32 30 -0.6 -1.4 28 0.1 31.7 26 -16.6%* -6.7%* -25.3%* 26.5 24 22 Q3 2018 Scandinavia Finland and Central Non-allocated and Q3 2019 Eastern Europe elim Group Business segments Group Comparable EBITA All figures exclude IACs and include IFRS16 impact * % change compared to same period previous year 11
COST BASE DEVELOPMENT COST PROGRAM PROCEEDING ACCORDING TO PLAN. NO MATERIAL EFFECTS YET VISIBLE IN Q3 DIRECT COST 1 INDIRECT COST 2 DEPRECIATIONS EUR million EUR million EUR million 37.0 % 36.4 % 40% 300 40% 200 50% 250 33.0 % 32.6 % 32.6 % 32.4 % 32.0 % 180 45% 30.6 % 35% 35% 250 160 40% 200 30% 30% 140 35% 148.6 146.8 200 25% 25% 120 30% 150 21.4 % 20.9 % 19.5 % 168.5 167.3 19.0 % 20% 100 20% 150 25% 80 20% 100 15% 15% 97.8 100 60 89.6 15% 10% 10% 40 50.0 10% 50 48.9 50 5% 5% 52.7 50.3 20 5% 32.3 30.3 0% 0 0% 0 0% 0 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 Jan-Sep Q3 Jan-Sep Q3 Jan-Sep Q3 Direct costs (right axis) Direct cost ratio (left axis) Indirect costs (right axis) Indirect cost ratio (left axis) Depreciations (right axis) Depreciation of sales (left axis) All figures exclude IACs and include IFRS16 impact 1 Direct cost refers to income statement line ”Materials and services” 12 2 Indirect cost refers to income statement lines ”Employee benefit expenses” and ”Other operating expenses”
COMPARABLE EPS DEVELOPMENT -31.7% EUR 0.60 0.54 0.50 0.37 0.40 0.33 0.32 0.30 0.20 0.20 0.20 0.13 0.10 0.00 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2018 2019 Figures exclude IACs and include IFRS16 impact 13
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