Nordea Construction Seminar 26 August 2008, Kämp Hotel Kari Kallio, President and CEO 1 26 August, 2008 Nordea Construction Seminar 2008 Ramirent
Ramirent in Brief Leading equipment rental company in Northern, Central and Eastern Europe Net Sales of EUR 634 million (2007) More than 4,000 employees 357 rental outlets across 13 countries More than 100,000 customers More than 200,000 rental units Founded in 1955 and listed the OMX Nordic Exchange Helsinki since 1998 Headquartered in Finland 2 26 August, 2008 Nordea Construction Seminar 2008 Ramirent
A balanced market portfolio Local head office Outlet 3 26 August, 2008 Nordea Construction Seminar 2008 Ramirent
Large potential in Central and Eastern Europe Construction output by Ramirent market 34 24 5 27 145 Inhabitants (million) Construction Output (billion EUR) 5 5 Norway 30 9 Sweden 38 35 Finland 1 3 Estonia 2 3 Latvia 3 3 48 90 Denmark Lithuania 20 10 Poland 5 5 Czech Rep. 10 11 Slovakia 8 *Ukraine **Russia Hungary Source: Euroconstruct June 2008, *Business Monitor International, **Ministry for Economic Development of Russian Federation 4 26 August, 2008 Nordea Construction Seminar 2008 Ramirent
General rental company with a wide product portfolio Formworks Modules Light Equipment Lifts and Hoists Power and Heating Tower Cranes Heavy Equipment Scaffolding 5 26 August, 2008 Nordea Construction Seminar 2008 Ramirent
One-stop-shop supplier to a wide customer base Suppliers Outlet Network Customers Lifts and hoists Tower cranes Heavy equipment Modules Formworks Light equipment Scaffolding Power and heating Other One-stop-shop Construction Companies Industry Infrastructure Public Households Czech Rep. 6 26 August, 2008 Nordea Construction Seminar 2008 Ramirent
Market leader in Northern, Central and Eastern Europe Rental market 2007 (machinery & equipment): Europe EUR 23.5 bn MEUR Loxam Ramirent Speedy Hire Cramo 2007 Algeko Scostman (US) Select Plant Hire GAM Liebherr-Mietpartner Mediaco Lifting HSS Hire Source: IRN June 2008, ERA Convention 2008 0 200 400 600 800 1000 7 26 August, 2008 Nordea Construction Seminar 2008 Ramirent
Cornerstones of Ramirent s strategy Profitable growth Local leadership positions Balanced geographic portfolio Emphasis on organic growth Pursuing acquisitions or consolidation opportunities supporting profitable growth Strong balance sheet 8 26 August, 2008 Nordea Construction Seminar 2008 Ramirent
Ramirent targets profitable growth Compound annual growth rate 1998-2007: 39% MEUR 700 Entry in Czech Republic, acquisitions in Sweden and Poland 30 % 600 500 400 300 200 100 Start of growth strategy Acquisition of Bautas and Stavdal Acquisition of Altima and Treffco Acquisition in Poland and Hungary 25 % 20 % 15 % 10 % 5 % 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Finland Sweden Norway Denmark Europe EBIT,% 0 % 9 26 August, 2008 Nordea Construction Seminar 2008 Ramirent
Leading market positions across 13 countries Segments R12 Sales 6/2008 Employees (average) Outlets Market Position Finland 144 707 95 1 Sweden 167 656 57 2 Norway 153 682 38 1 Denmark 59 255 18 1 *Europe East 96 679 52 1 *Europe Central 71 1 001 97 1 Group 688 3 996 357 * Europe East Russia Estonia Latvia Lithuania Ukraine Europe Central Poland Hungary Czech Republic Slovakia 10 26 August, 2008 Nordea Construction Seminar 2008 Ramirent
Ramirent s long-term financial targets 2003 2004 2005 2006 2007 Target EPS (diluted), EUR 0.20 0.15 0.33 0.73 1.02 EPS change, % -17.9-26.1 120.0 119.0 39.7 > 15% ROI, % 10.3 14.2 17.2 28.1 31.7 > 18% Dividend per share, EUR Dividend payout ratio, % 0.03 15.4 0.06 37.5 0.15 45.5 0.30 41.1 0.50 49.3 > 40% 11 26 August, 2008 Nordea Construction Seminar 2008 Ramirent
Key business drivers for Ramirent Growing construction markets Increasing penetration rates Increased equipment usage Market consolidation Undeveloped rental markets Entry into new markets 12 26 August, 2008 Nordea Construction Seminar 2008 Ramirent
Renting becoming the new standard Financial Benefits Release of capital for your core business Minimizing assets & better cost control No maintenance costs No transportation vehicle fleet Equipment and Service benefits Large diversity of products Availability of state-of-the art equipment Use it when you need it Proximity & delivery on the site Safety Benefits Pre-rental safety check Regulation compliance Well maintained fleet 13 26 August, 2008 Nordea Construction Seminar 2008 Ramirent
Large potential in Central and Eastern Europe Construction output by Ramirent market 34 24 5 27 145 Inhabitants (million) Construction Output (billion EUR) 5 5 Norway 30 9 Sweden 38 35 Finland 1 3 Estonia 2 3 Latvia 3 3 48 90 Denmark Lithuania 20 10 Poland 5 5 Czech Rep. 10 11 Slovakia 8 *Ukraine **Russia Hungary Source: Euroconstruct June 2008, *Business Monitor International, **Ministry for Economic Development of Russian Federation 14 26 August, 2008 Nordea Construction Seminar 2008 Ramirent
Rental penetration still low in Ramirent markets 90 % 80 % 70 % 60 % 50 % 40 % 30 % 20 % 10 % 0 % Europe (ex. UK) 2010E Europe (ex. UK) Poland Baltics Finland Norway Denmark Sweden UK Penetration rate measured as machinery sold directly to rental companies as percentage of total machinery sales Source: International Rental News/ Kaplan 2006 15 26 August, 2008 Nordea Construction Seminar 2008 Ramirent
H108 Interim Report: Growth continued, but profits declined H1 2008 Highlights Net sales increased by 18.8% to MEUR 342.9 (288.6) EBITDA up 9.7% to MEUR 112.1 (102.2) EBIT was MEUR 65.0 (65.5) with a margin of 19.0% (22.7%) Earnings per share of EUR 0.38 (0.42) Gross Capital expenditure was 172.1 (147.2), of which machinery and equipment MEUR 139.2 (145.7) Net debt of MEUR 373.5 (279.6), gearing of 112.5% (99.4%) Return on invested capital (ROI) of 25.8% (28.4%) Q2 2008 Highlights Net sales increased by 18.9% to MEUR 180.8 (152.0) EBIT was MEUR 35.5 (36.5) with a margin of 19.6% (24.0%), EBIT excl. property sale gains was MEUR 35.1 (33.9) Earnings per share of 0.20 (0.24) 16 26 August, 2008 Nordea Construction Seminar 2008 Ramirent
H1- Finland Strong development in overall Finnish construction market, shipyards and industrial projects Increased usage of leasing had a slight negative effect on margins MEUR 4-6/08 4-6/07 Change 1-6/08 1-6/07 Change Net sales EBIT 39.3 9.8 34.6 8.3 14% 19% 72.7 16.3 61.7 14.7 18% 12% EBIT-margin 25.0% 23.9% 22.5% 23.9% Employees (average) Outlets 707 95 674 95 MEUR 45 40 35 30 25 20 15 10 21 27 33 24 35 39 28 36 36 29 35 % 33,2 % 32,2 % 30 % 25,0 % 23,9 % 23,9 % 25 % 23,6 % 22,8 % 23,0 % 20 % 19,6 % 16,8 % 15 % 10 % 2006 2007 2008 5 5 % 0 Q1 Q2 Q3 Q4 Sales 0 % Q1 Q2 Q3 Q4 EBIT -margin 17 26 August, 2008 Nordea Construction Seminar 2008 Ramirent
H1-Sweden Profitability improvement continued due to better utilisation of the fleet and organisational resources, an enhanced outlet network and new customer groups. Good market development and the acquisition of Hyresmaskiner i Stockholm AB contributed to sales growth MEUR 4-6/08 4-6/07 Change 1-6/08 1-6/07 Change Net sales 45.4 36.7 24% 87.1 72.5 20% EBIT 10.3 7.6 35% 19.3 15.0 29% EBIT-margin 22.6% 20.7% 22.2% 20.7% Employees (average) 656 587 Outlets 57 48 MEUR 50 45 40 35 30 25 30 36 42 45 37 37 31 32 38 43 30 % 25 % 20 % 15 % 26,0 % 21,7 % 24,0 % 22,6 % 20,6 % 20,7 % 19,2 % 19,6 % 14,4 % 12,5 % 2006 2007 20 15 10 % 2008 10 5 % 5 0 0 % Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Sales EBIT- margin 18 26 August, 2008 Nordea Construction Seminar 2008 Ramirent
H1- Norway Profitability burdened by cost increases and lower utilization. Weaker market demand in some geographical areas especially in Oslo area. MEUR 4-6/08 4-6/07 Change 1-6/08 1-6/07 Change Net sales 38.5 33.3 16% 75.6 68.1 11% EBIT 7.8 8.3-5% 14.8 16.1-8% EBIT-margin 20.4% 24.9% 19.5% 23.6% Employees (average) 682 619 Outlets 38 37 45 42 30 % 40 35 30 39 37 35 36 33 29 29 29 33 25 % 20 % 25,0 % 25,7 % 24,9 % 25,2 % 22,4 % 22,9 % 21,8 % 20,4 % 18,6 % 18,7 % MEUR 25 20 15 % 2006 2007 15 10 % 2008 10 5 5 % 0 Q1 Q2 Q3 Q4 Sales 19 26 August, 2008 Nordea Construction Seminar 2008 Ramirent 0 % Q1 Q2 Q3 Q4 EBIT -margin
H1-Denmark The decline in the construction market continued Tougher price competition and increased overall costs. MEUR 3-6/08 3-6/07 Change 1-6/08 1-6/07 Change Net sales 15.0 14.0 7% 28.7 26.5 8% EBIT 1.7 2.5-33% 2.5 3.8-34% EBIT-margin 11.2% 17.8% 8.7% 14.2% Employees (average) 255 220 Outlets 18 16 18 25 % 24,2 % MEUR 16 14 12 10 8 6 4 10 14 13 12 15 14 16 15 14 14 18,3 % 20 % 17,8 % 17,8 % 17,4 % 15 % 11,4 % 11,2 % 10,4 % 10 % 6,8 % 5,9 % 5 % 2006 2007 2008 2 0 0 % Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Sales EBIT -margin 20 26 August, 2008 Nordea Construction Seminar 2008 Ramirent
H1 - Europe Central (Poland, Hungary, Czech Republic, Slovakia) Europe Central business operations continued to grow rapidly except in Hungary. Ramp up costs in Poland, Czech republic and Slovakia and the negative development in Hungary decreased profitability. MEUR 4-6/08 4-6/07 Change 1-6/08 1-6/07 Change Net sales 21.0 12.8 64% 37.6 22.3 69% EBIT 2.0 2.7-28% 3.5 4.9-29% EBIT-margin 9.3% 21.4% 9.3% 22.2% Employees (average) 1,001 598 Outlets 97 52 25 30 % 27,9 % MEUR 20 15 10 10 17 13 21 16 18 25 % 20 % 15 % 10 % 23,3 % 21,4 % 20,4 % 9,2 % 9,3 % 2007 2008 5 5 % 0 Q1 Q2 Q3 Q4 0 % Q1 Q2 Q3 Q4 Sales EBIT-margin 21 26 August, 2008 Nordea Construction Seminar 2008 Ramirent
Ramirent in Poland Operations started in 2000 42 outlets Market leader in scaffolding, machinery and equipment rentals for construction and industry Market environment Stable economic growth High construction market growth Increased competition as everyone wants to be in the market Key facts 2008e 2009e 2010e GDP (growth %) 5.0 4.5 5.0 Inflation % 3.8 3.5 3.0 Population (million) Construction output, % change (2007: 35 EUR billion) Source: PMR Research, GUS, Euroconstruct 38 14.6% 38 10.7% 38 9.4% 22 26 August, 2008 Nordea Construction Seminar 2008 Ramirent
H1 - Europe East (Russia, Estonia, Latvia, Lithuania, Ukraine) Sales decreased in Estonia and Latvia; strong growth continued in Russia, Ukraine and Lithuania. Profitability decreased due to the negative development in Estonia and Latvia. Adjustment of the fleet capacity and cost structure continued in Estonia and Latvia. MEUR 4-6/08 4-6/07 Change 1-6/08 1-6/07 Change Net sales 23.4 21.0 11% 43.5 38.4 13% EBIT 3.7 6.2-39% 7.9 10.9-28% EBIT-margin 16.0% 29.4% 18.1% 28.4% Employees (average) 679 551 Outlets 52 49 30 26 26 40 % 36,0 % 34,3 % MEUR 25 20 15 10 17 20 21 23 35 % 30 % 25 % 20 % 15 % 29,4 % 27,2 % 20,6 % 16,0 % 2007 2008 10 % 5 5 % 0 Q1 Q2 Q3 Q4 Sales 0 % Q1 Q2 Q3 Q4 EBIT-margin 23 26 August, 2008 Nordea Construction Seminar 2008 Ramirent
Ramirent in Russia Operations started in 1988 6 outlets Strong market position in St. Petersburg and Moscow Rental customers also outside St Petersburg and Moscow area Market Environment Growth considerably above European average Considerable foreign investments Growing construction market Key facts 2008e 2009e 2010e GDP 6.1 5.7 5.8 Inflation 9-10.5 6-7.5 5-7.0 Population (million`s) 141.7 141.6 141.5 Change % Construction output (2007: EUR 95 bn) 12.3 12.0 11.5 Source: Ministry for Economical Development of Russian Federation 24 26 August, 2008 Nordea Construction Seminar 2008 Ramirent
Ramirent in Ukraine Operations started in 2003 3 outlets Strong market position Market environment Growth considerably above European average Considerable foreign investment activities Favourable labour conditions Key facts 2008e 2009e 2010e GDP 17.0 18.0 17.0 Inflation 8.0 9.0 9.5 Population (million`s) 46.5 46.0 45.5 Change % Construction output (2007: EUR 8 bn) 10.2 n/a n/a Source: Business Monitor International 25 26 August, 2008 Nordea Construction Seminar 2008 Ramirent
Ukraine Market environment Availability of modern real estate facilities 2-3 times behind Central Europe depending on type of property Availability of modern real estate facilities by type, sq.m Sq.m. 3 000 000 2 500 000 2 000 000 1 500 000 1 000 000 500 000 - Office Warehouse Retail Source: Colliers International and Business Monitor International Kiev Warsaw Prague Budapest 26 26 August, 2008 Nordea Construction Seminar 2008 Ramirent
Outlook 2008 The operating environment has in 2008 become more challenging and we expect overall equipment rental market growth rate to slow down. In Nordic region, strongest growth expected in Sweden and Finland while growth slowing down in Norway and Denmark. In Central and Eastern Europe, sustained growth expected in most operating countries expect for the Baltics and Hungary. Priority set on bolt-on acquisition and reallocation of existing equipment and cost reductions in countries with weak market expectations. Since Ramirent will delimit investments, cash flow is expected to be positive for the second half of 2008 and gearing to improve. 27 26 August, 2008 Nordea Construction Seminar 2008 Ramirent
Outlook 2008 For the full year 2008, we estimate net sales growth to continue, but profit before taxes and earnings per share to be below the 2007 level. 28 26 August, 2008 Nordea Construction Seminar 2008 Ramirent
Q&A 29 26 August, 2008 Nordea Seminar 2008 Ramirent