Ramirent s PATH TO performance & new financial targets

Transcription

1 CMD 2017 Ramirent s PATH TO performance & new financial targets Pierre Brorsson, EVP & CFO

2 previous financial targets have been met but we have not been satisfied with our performance NET sales (MEUR) & Annual Growth (%) +9.9% -9.4%* -4.1% +3.6% Q3 17 R12 *Russia & Ukraine moved into JV, Fortrent +4.6% +8.1% COMPARABLE EBIT (MEUR) & MARGIn (%) 12.9% 11.4% 9.8% 9.8% 8.9% 12.2% Q3 17 R FInancial Targets Net sales growth (r12) Comparable ROE (R12) Net Debt To Ebitda Dividend Payout Ratio % 12.1% 1.7X 111% % 12.1% 2.0X 195% Target > GDP +2%-p. > 12.0% < 2.5X > 40% Total Shareholder Return index /11 12/12 12/13 12/14 12/15 12/16 Ramirent Helsinki All Share Capital Markets Day

3 What we did differently in 2017 What we did in 2017 Focus on addressing non-performance Growing Rental sales Meaningful cost decreases in external services and IT First incremental pricing improvements All incentives linked to improvements What we did not do in 2017 NO Further common ERP-rollout to additional countries No significant acquisitions Less centralized process development work NO Large organizational changes in segments Capital Markets Day

4 What we did in 2017 FOCUS ON Addressing non performance A clear decrease in low-performing regions ACHIEVED Q3 16 Net sales and EBIT margin by region/business Q3 17 Net sales and EBIT margin by region/business EBIT Margin (%) R12 Cost of capital EBIT Margin (%) R12 Cost of capital Net Sales R 12 (MEUR) Net Sales R12 (MEUR) Illustrative example Illustrative example Capital Markets Day

5 What we did in 2017 growing rental sales Rental sales growth Good momentum since mid % 10% 5% R12 rental sales Growth BY Quarters Rental sales growth slowed down after the upturn following the financial crisis 0% -5% -10% -15% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q Capital Markets Day

6 OUR NEW FINANCIAL TARGETS AND THEIR Rationale OLD target Net Sales Growth > GDP +2%-points p.a. ROE 12% Per Fiscal Year NET DEBT/ EBITDA < 2.5x at end of year Dividend PAYOUT RATIO > 40% of net profit New Target double digit EPS %* Cagr % Roce** by THE END OF 2020 NET DEBT / EBITDA < 2.5x at end of year DIVIDEND Payout ratio > 50% of net profit Rationale From Sales focus TO Profit focus STRATEGY-ALIGNED and CLEAR TO the entire organization No change Gives good stability capital-efficient strategy allows increased dividends * Baseline is EPS 2017 **At current accounting principles for ROCE Capital Markets Day

7 Where we stand versus our financial targets Today 30% 10% Comparable EPS 3-years CAGR % Target >10% CAGR % 15% 10% 15.4% 12.4% 10.6% 10.8% Indicator COMPARABLE ROCE Target 16% 12.9% Financial Targets double digit EPS % Cagr % 5% 9.3% -30% /17 R12M 0% /17 R12M 16% Roce by THE END OF X Net Debt To Ebitda 1.1X 1.4X 1.7X Target < 2.5X 2.0X 1.8X /17 R12M 200% 150% 100% 50% 0% Dividend Payout Ratio 132% 111% 74% 58% 195% Target > 50% NET DEBT/ EBITDA < 2.5x at the end of each Fiscal year DividenD Payout ratio > 50% of net profit Capital Markets Day

8 KEY FINANCIAL PRIORITIES TO Reach our targets Reducing NON-Performance Success in the core Capital / COST efficiency Pricing Excellence Organic Growth SMB sector Large customers Acquisitions Capital Markets Day

9 1 Meaningful improvement potential in RAISING ALL Customer centers EBIT % > cost of capital EBIT % EBIT Margin BY customer center (CC) (Illustrative example) Meaningful improvement potential RAISING ALL CC > cost of capital Cost of capital Capital Markets Day

10 2 Ramirent is PROFITABLE But The Returns Need to improve Optimizing capital expenditure Growing selected Product lines & services More use of refurbishments Optimized replacement investments Supply chain improvements Growing profitable rental related service business Growing faster in capital-efficient categories, especially in Light and Safe Transforming or Leaving LOW return on capital Businesses Improving fixed cost/sales ratio Exploring options for the capital intensive, yet profitable, Temporary Space business Restructuring in Denmark Exploring options for JV Fortrent Grow the core business through existing network and structures No sizeable corporate development programs being considered Capital Markets Day

11 3 Better price transparency and customer specific pricing WILL CONTRIBUTE TO PROFITABLE GROWTH Pricing excellence Roadmap Dynamic pricing fully IMplemented Dynamic Pricing Frame agreements By 2020 we target to have well-managed, fair and transparent pricing. This will increase customer satisfaction as well as profits. Level of Pricing sophistication Dynamic Pricing Spot & Small Business Implementation WITH Price optimization software Improving existing pricing Processes, targets and measurement This is part of the convenience to rent which supports further rental penetration Capital Markets Day

12 Changes in reporting and segment structure in 2018 New Eastern Europe segment formed by combining Baltics and Europe Central segments EBIT to be reported alongside EBITA Eastern Europe SEgment Key Figures Q3 17 R12 Sales Sales growth % 0.8 % 15.2 % Comparable EBIT EBIT margin % 11.1 % 20.5 % Comparable ROCE % 8.8 % 17.8 % New fixed cost/ gross margin measurement The old Gross Margin included only material and services costs The new Gross Margin includes operational costs related to net sales (incl. personnel costs, other operating costs, depreciation and amortization) New gross margin measurement Net Sales less Materials & Services Personnel costs Operating Costs* Opex costs Dep'n & Amort Net Sales less all costs of sale SG&A costs (i.e. the costs of support services) are excluded from the new Gross Margin Old Gross Margin New Gross Margin Capital Markets Day

13 We are focused on Creating shareholder value New strategy focuses on our profitable core and execution excellence Solid business model that we are improving further by becoming more capital-efficient Operational KPIs that support the new strategy are in place Already now generating a positive cash flow during strong growth phase Executive Management Team s long-term incentive scheme linked to shareholder value creation Capital Markets Day

14 Q&A Capital Markets Day