Key market growth drivers

Six key growth drivers support equipment rental business both in the short and in the long term.

1 RENTAL PENETRATION

  • In the long term, rental penetration is expected to increase steadily in Europe as users recognise the advantages of renting.
  • Construction companies aim to focus on their core businesses and lighten their balance sheets. In particular in downturns, companies are looking for ways to be more efficient and release capital from their balance sheets by outsourcing their machinery fleets to rental companies.
  • Times of high activity and potential cyclical recovery may increase customers’ need to rent due to the high utilisation of their own fleets.
  • In the Nordic countries, rental penetration is highest in Sweden followed by Norway, Denmark and Finland. In Central and Eastern Europe, equipment rental markets are still developing and offering substantial growth possibilities. Rental is developing into two complementary business models reflecting different customer needs: rental over the counter and rental of solutions. Ramirent has the opportunity to leverage on its know-how of both business models and has redefined its sales approach to better cater for the specific customer needs. 

2 EQUIPMENT OUTSOURCING

  • Construction companies increasingly out-source their non-core activities to release capital, improve flexibility and reduce fixed costs.
  • Industrial companies seek to divest their non-core machinery operations.
  • Ramirent has a strong track record in taking over customers in-house machinery operations and tailoring a rental agreement optimised to the customers’ business needs. 

3 INTEGRATED SOLUTIONS

  • Customers are increasingly interested in giving a broader rental-related responsibility to rental companies in their projects. This is driven by increasing requirements for on-time fleet delivery, maintenance and operations.
  • Industrial customers have special needs related to health and safety, eco-efficiency, 24/7 service, just-in-time deliveries, dedicated technical specialists and on-site temporary outlets.
  • Ramirent is experienced in taking on broad responsibility and managing the entire fleet capacity and related solutions on a project site. 

4 MARKET CONSOLIDATION

  • The equipment rental industry is highly fragmented with over 14,000 rental companies operating in Europe. Largest top 3 players hold less than 10% market share in the overall European equipment rental market.
  • In Ramirent’s main markets, there are only 2–3 nationwide players with high market shares, and a large number of small specialised companies focusing on specific product groups or geographical areas.
  • Ramirent has a proven track record of growth through acquisitions. The company’s strong financial position and leading market position in all of its operating countries enable Ramirent to play an active role in market consolidation, also in the future, while maintaining its strong financial position 

5 NEW CUSTOMER SEGMENTS

  • Rental penetration and market maturity in customers segments like energy, oil and gas as well as public sector varies.
  • Emergence of equipment rental in these new customer segments offers opportunities for accelerated growth and is likely to balance Ramirent’s business portfolio further.
  • Demand for rental equipment especially in the industrial sectors is driven by main tenance breaks, overhauls and ongoing maintenance. 

6 NEW GEOGRAPHIES

  • There is long-term growth potential in construction volumes per capita in Ramirent’s Central and Eastern European markets when compared to the more mature markets in the Nordic countries. This indicates long-term growth potential also for the equipment rental sector in these markets.
  • Ramirent is also viewing additional strategic opportunities in Continental Europe either in the current markets or in new geographies.

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