Ramirent's updated strategy prioritizes capital efficient profitable growth in the core equipment rental business


Ramirent launches its new strategy and sets new financial targets for 2018-2020 ahead of the Capital Markets Day, which will be held tomorrow on December 1, 2017 in Helsinki, Finland. With the new strategy, Ramirent aims to focus on capital efficient profitable growth in its core business - general equipment rental and related services. Consequently, Ramirent is exploring strategic options for its Temporary Space business, including a potential sale. Due to unsatisfactory profitability development in Denmark, Ramirent will restructure the Danish customer center network and record restructuring charges of approximately EUR 2 million in the fourth quarter of 2017.

The objective of the Group strategy for 2018-2020 is to drive further profitability improvement by having a disciplined focus on profitable businesses, performance management, process excellence, capital efficiency and people leadership.

"The core equipment rental market continues to offer us opportunities to create shareholder value. Our geographies offer us a EUR 4 billion growing rental market, where share gains and rental penetration increases are possible when we sharpen our value propositions and improve our operational execution. We see growth opportunities particularly within small and medium-sized businesses, and in Baltics and Europe Central, where we aim to focus even more in the coming years.  We also see great opportunities for improving operational performance in our supply chain and aim to raise the service levels of our industry to a new benchmark by developing the rental industry's best performing supply chain.  The value proposition for renting instead of owning can be further strengthened by digitalization and making a step-change improvement in service-levels," says Tapio Kolunsarka, President and CEO of Ramirent.

"Our strategy is to grow capital-efficiently in our core business with disciplined development of rental and related service businesses. This is why we have initiated a process to assess strategic options, including a potential sale of our Temporary Space business."

"While remaining a wide-range rental equipment supplier, we strongly believe that focusing on product lines and existing geographies, where we can earn ROCE clearly above the cost of capital, is the best way to create sustainable shareholder value in our sector," Kolunsarka continues.

"Going forward we intensify our efforts to improve low performing parts of the business and will restructure Denmark's customer center network and book restructuring charges of approximately EUR 2 million for the fourth quarter 2017 in the segment, " Kolunsarka concludes.

Key building blocks of the Capital Efficient Profitable Growth in the Core strategy

Winning in the small and medium-sized business sector
Our share among small and medium-sized businesses (SMBs) is still below our average and we aim to win in this sector by further improving our customer experience and availability.

Becoming the large customer's supplier of choice
We want to further strengthen our strong position and become the large customers' supplier of choice by providing advanced total solutions that improve safety, productivity and sustainability in construction and other industries. Ramirent has a market-leading offering in what it takes to help construction businesses improve their productivity.

Building the industry's best performing supply chain
We will make a step-change improvement in our availability, delivery accuracy and supply chain  efficiency by 2020 by developing and digitizing our processes. There is sizable untapped potential in our supply chain management.

Tightening performance management of low-performing units
We will strive to have no units nor customer centers delivering below 10% EBIT by 2020 and implement clear performance management standards in the company.

Growing capital efficiently
We will seek above-average growth rates in capital-light product categories and raise our capital efficiency through supply chain improvements and by optimizing the replacement investments. We aim to grow min. 2% p.a. before the effect of growth investments.

Becoming a great place to work by focusing on leadership and safety
To raise our performance and pursue the updated strategy and financial targets, we want to create a great place to work by developing the Ramirent leadership culture and our safety standards to be top-quartile by 2020.

New financial targets

Indicator Target Previous indicator & target
EPS growth (CAGR) double digit % 2018-2020 net sales growth > GDP +2%-points p.a.
ROCE 16% by the end of 2020 ROE 12% per fiscal year
Dividend payout ratio > 50% of net profit > 40% of net profit
Net debt to EBITDA < 2.5x at end of each fiscal year < 2.5x at end of each fiscal year

Changes in reporting and segment structure
As of the first quarter of 2018, Ramirent will report segments Baltics and Europe Central together as one new segment called "Eastern Europe". Going forward, Ramirent will publish its financial information according to these five segments: Sweden, Finland, Eastern Europe, Norway and Denmark. The terminology business areas General Rental, Solutions and Temporary Space will not be used in the future, instead sales figures are split by rental sales, service sales and sales of used equipment. Ramirent will also introduce a new measurement for costs based on gross margin and SG&A, and start reporting EBIT alongside EBITA. 

Ramirent's guidance for 2017 unchanged
For 2017, Ramirent reiterates its financial guidance: Ramirent's comparable EBITA 2017 is expected to increase from the level in 2016.

Capital Markets Day tomorrow
Tomorrow Ramirent will hold its Capital Markets Day at its headquarters in Helsinki, Finland. The event focuses on Ramirent's new strategy, new financial targets and business prospects by segment. It is also possible to follow the presentations through a live webcast on ramirent.com at approximately 9:00 a.m.-2:00 p.m. CET.


Pierre Brorsson, EVP and CFO, tel. +46 8 624 9541,

Franciska Janzon, SVP, Marketing, Communications and IR, tel. +358 20 750 2859,franciska.janzon@ramirent.com

RAMIRENT is a leading rental equipment group combining the best equipment, services and know-how into rental solutions that simplify customer's business. Ramirent serves a broad range of customer sectors including construction, industry, services, the public sector and households. In 2016, Ramirent Group sales totaled EUR 665 million. The Group has 2,771 employees in 298 customer centers in 10 countries in Europe. Ramirent is listed on the NASDAQ Helsinki (RMR1V). Ramirent - More than machines®.

DISTRIBUTION: NASDAQ Helsinki, Main news media, www.ramirent.com

Share this page