Ramirent Plc's Financial Statements Bulletin 2017: A step-change improvement in performance and strong cash flow

Ramirent Plc    Stock Exchange Release          9 February 2018 at 9:00 am EET

  

This stock exchange release is a summary of Ramirent Plc's Financial Statements Bulletin 2017. The complete report is attached to this release in pdf format and is also available on Ramirent's website at www.ramirent.com.

Note! Figures in brackets, unless otherwise indicated, refer to the corresponding period a year earlier.

October-December 2017 in brief

- Net sales EUR 200.3 (180.5) million, up by 11.0% or 11.9% at comparable exchange rates
- Comparable EBITA was EUR 26.41 (21.1) million or 13.2%1 (11.7%) of net sales; EBITA was 25.1 (21.2) million or 12.5% (11.7%) of net sales
- Comparable EBIT was EUR 24.33 (19.2) million or 12.1%3 (10.6%) of net sales; EBIT was EUR 23.0 (19.2) million or 11.5% (10.6%) of net sales
- Gross capital expenditure EUR 31.0 (47.0) million
- Cash flow after investments EUR 53.6 (11.1) million

January-December 2017 in brief

- Net sales EUR 723.7 (665.2) million, up by 8.8% or 9.3% at comparable exchange rates
- Comparable EBITA was EUR 99.01 (68.12) million or 13.7%1 (10.2%2) of net sales; EBITA was EUR 97.7 (59.2) million or 13.5% (8.9%) of net sales
- Comparable EBIT was EUR 90.63 (59.02) million or 12.5%3 (8.9%2) of net sales; EBIT was EUR 89.3 (38.4) million or 12.3% (5.8%) of net sales
- Comparable EPS was EUR 0.594 (0.356); EPS was EUR 0.59 (0.20)
- Comparable ROCE was 13.8%4 (9.3%); ROCE was 13.8% (6.2%)
- Gross capital expenditure EUR 166.4 (190.8) million
- Cash flow after investments EUR 51.6 (-20.7) million
- The Board of Directors proposes to increase the dividend to EUR 0.44 (0.40) per share

1 Excluding items affecting comparability (IACs) of EUR -1.3 million in Q4 2017 and 1-12/2017
2 Excluding IACs of EUR -8.9 million in 1-12/2016
3 Excluding IACs of EUR -20.6 million in 1-12/2016
4 Excluding IACs of EUR -1.3 million adjusted with tax impact of EUR 0.6 million in Q4 2017 and in 1-12/2017
5 Excluding IACs
adjusted with tax impact of EUR 0.1 million in Q4 2016
6 Excluding IACs
of EUR -20.6 million adjusted with tax impact of EUR 4.6 million in 1-12/2016

Ramirent's guidance for 2018
In 2018, Ramirent's comparable EBIT is expected to increase from the level in 2017.

  

KEY FIGURES (MEUR and %) 10-12/17 10-12/16 CHANGE 1-12/17 1-12/16 CHANGE
Net sales 200.3 180.5 11.0% 723.7 665.2 8.8%
EBITDA 53.1 47.9 11.0% 205.5 169.0 21.6%
% of net sales 26.5% 26.5%   28.4% 25.4%  
Comparable EBITA 26.41 21.1 24.9% 99.01 68.12 45.3%
% of net sales 13.2% 11.7%   13.7% 10.2%  
EBITA 25.1 21.2 18.5% 97.7 59.2 65.0%
% of net sales 12.5% 11.7%   13.5% 8.9%  
Comparable EBIT 24.31 19.2 26.7% 90.61 59.03 53.7%
% of net sales 12.1% 10.6%   12.5% 8.9%  
EBIT 23.0 19.2 19.6% 89.3 38.4 133.0%
% of net sales 11.5% 10.6%   12.3% 5.8%  
Comparable EPS, EUR 0.174 0.115 49.1% 0.594 0.356 68.2%
EPS, EUR 0.16 0.12 41.1% 0.59 0.20 186.7%
Gross capital expenditure 31.0 47.0 -34.1% 166.4 190.8 -12.8%
Cash flow after investments 53.6 11.1 n/a 51.6 -20.7 n/a
Capital employed, end of period       654.4 645.0 1.5%
Comparable ROCE, %       13.8% 9.3%  
ROCE, %       13.8% 6.2%  
Comparable ROE, %       20.6% 12.1%  
ROE, %       20.9% 7.2%  
Net debt       337.9 345.8 -2.3%
Net debt to EBITDA ratio       1.6x 2.0x -19.6%

1 Excluding items affecting comparability (IACs) of EUR -1.3 million in Q4 2017 and 1-12/2017
2 Excluding IACs of EUR -8.9 million in 1-12/2016

3 Excluding IACs of EUR -20.6 million in 1-12/2016
4 Excluding IACs of EUR -1.3 million adjusted with tax impact of EUR 0.6 million in Q4 2017 and in 1-12/2017
5 Excluding IACs  adjusted with tax impact of EUR 0.1 million in Q4 2016

6 Excluding IACs of EUR -20.6 million adjusted with tax impact of EUR 4.6 million in 1-12/2016

RAMIRENT'S PRESIDENT AND CEO TAPIO KOLUNSARKA ON Q4 AND FULL YEAR 2017 RESULTS:
"Entering 2017, we had a single target for the year: to achieve a step-change improvement in our financial performance in all our operating segments. With 2017 now behind us, I have every reason to be proud of the accomplishments of the Ramirent team. Our comparable EBITA grew by 45% to EUR 99.0 million and EBITA margin strengthened to 13.7% from previous year's 10.2%. All our segments improved their comparable financial performance and particularly gratifying was the strong profit comeback of Sweden and Europe Central segments. Successful turnaround in our low-performing units has been an important factor in improving our profitability. I would like to thank all Ramirenters for their focused and disciplined efforts in 2017. 

We also achieved the fastest sales growth at comparable exchange rates, 9.3%, since 2012 and succeeded well in growing our key priority areas: rental sales and sales to small and medium-sized customers. Demand conditions were favorable across our markets. There were clear improvements in market activity in the Baltics and Europe Central, taking their combined share of the Group's total operating profit to one quarter.

During the fourth quarter, our execution remained strong despite temporarily higher fixed costs. I was particularly satisfied with the improved comparable EBITA and margin development in all segments, including also Denmark and Norway exceeding the 10% comparable EBITA margin level in the quarter.

Cash flow after investments for the full year improved to EUR 51.6 million from previous year's EUR -20.7 million and our ROCE improved to 13.8% from previous year's 6.2%. Considering the fast sales growth in 2017, our strong cash generation underlines our ability to grow capital-efficiently.

We presented our renewed strategy and financial targets for 2018-2020 at our Capital Markets Day in December 2017. We aim for capital-efficient and profitable growth in our core, the construction equipment rental business, and we are determined to reach a 16% ROCE by 2020 and grow our EPS (CAGR) during 2018-2020 at a double-digit rate.
 
After a step-change improvement in performance achieved in 2017, we look confidently to the future. The demand outlook for the start of 2018 looks favorable across Ramirent's diverse customer base and geographies, and there is still much to be gained by improving our internal operations. Our new financial targets and the strategic focus on capital-efficiency constitute our recipe for creating value for Ramirent shareholders in the coming years. In line with this, Ramirent's Board of Directors has today proposed that the dividend for 2017 be increased to 0.44 (0.40) per share, which represents a payout ratio of 75%."

MARKET OUTLOOK FOR 2018
Ramirent's market outlook is based on the available forecasts disclosed by local construction and industry associations in its operating countries.
The demand outlook for the start of 2018 looks favorable for equipment rental across Ramirent's diverse customer base and geographies. In Finland, market conditions in the equipment rental market are expected to continue to be favorable. In Sweden, continued strong momentum in the construction sector is expected to maintain the demand for equipment rental going into 2018, although the medium-term outlook is more uncertain and the risk level is elevated. The Danish and Norwegian equipment rental markets are estimated to remain fairly stable. In the Baltic countries, Poland, Czech Republic and Slovakia, the market conditions for equipment rental are expected to remain favorable.

PROPOSAL OF THE BOARD ON THE USE OF DISTRIBUTABLE FUNDS
The parent company's distributable equity on December 31, 2017 amounted to EUR 245,975,831.02 of which the net result from the financial year 2017 is EUR 15,926,255.72.

The Board of Directors has decided to propose to the Annual General Meeting that a dividend of EUR 0.44 per share be paid based on the adopted balance sheet for the financial year ended on December 31, 2017. The dividend shall be paid in two installments. The first installment of EUR 0.22 per share will be paid to shareholders registered in the shareholders' register of the Company maintained by Euroclear Finland Ltd on the record date for dividend payment 19 March 2018. The first installment is to be paid on April 4, 2018 for shareholders whose shares are registered in Euroclear Finland Ltd and on April 5, 2018 for shareholders whose shares are registered in Euroclear Sweden AB. The second installment of EUR 0.22 per share will be paid to shareholders registered in the shareholders' register of the Company maintained by Euroclear Finland Ltd on the record date for dividend payment September 18, 2018. The second installment is to be paid on October 3, 2018 for shareholders whose shares are registered in Euroclear Finland Ltd and on October 4, 2018 for shareholders whose shares are registered in Euroclear Sweden AB. The Board of Directors is authorized to set a new dividend record date and payment date for the second installment of the dividend, in case the rules and regulations of the Finnish book-entry system would be changed, or otherwise so require, prior to the payment of the second installment of the dividend.

AUDIOCAST AND CONFERENCE CALL FOR INVESTMENT ANALYSTS AND PRESS
A briefing for investment analysts and the press will be arranged on Thursday, February 8, 2018 at 10:30 A.M. Finnish time (EET) through a live audiocast viewable at www.ramirent.com combined with a conference call. The briefing will be hosted by CEO Tapio Kolunsarka and CFO Pierre Brorsson. The dial-in numbers are: +358 981 710 495 (FI), +46 856 642 702 (SE), +44 203 194 0552 (UK), +1 855 716 15 97 (US). A recording of the audiocast and teleconference will be available at www.ramirent.com later the same day.

FINANCIAL CALENDAR 2018
Ramirent observes a silent period during 30 days prior to the publication of annual and interim financial results.

Annual General Meeting                                              March 15

Interim report January-March                                   May 9

Half Year Financial Report                                          August 8

Interim report January-September                          November 7

The financial information in this stock exchange release has not been audited.

FURTHER INFORMATION
CFO Pierre Brorsson
tel. +46 8 624 9541, pierre.brorsson@ramirent.com

SVP, Marketing, Communications and IR Franciska Janzon
tel. +358 20 750 2859, franciska.janzon@ramirent.com
           
Ramirent is a leading equipment rental 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. Ramirent has operations in the Nordic countries and in Central and Eastern Europe. In 2017, Ramirent Group sales totaled EUR 724 million. The Group has 2,820 employees in 293 customer centres in 10 countries. Ramirent is listed on the NASDAQ Helsinki (RMR1V). Ramirent - More than machines®.

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


Ramirent Financial Statements Bulletin 2017_web

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