16.02.2012

Ramirent growth continues

Finnish based international rental company Ramirent has reported a strong finish to 2011 with revenues up 24.4 percent in the quarter.

Looking first at the year as a whole, total revenues were €649.9 million, 22.3 percent higher than in 2010. This resulted in a tripling of pre-tax profits to €60.76 million. Revenues grew in all of the company’s markets, with East Europe leading the way, up 31%, followed by Norway and Sweden 26% Denmark at 24%, Finland at 13% and Europe Central at 11%.

Looking at the fourth quarter revenues were €186.8 million 24.4 percent up on the same quarter in 2010. Pre-tax profits for the period came in at €22.7 million compared to €8.8 million a year earlier.

Gross capital expenditure for the year was €242.2 million compared to €62 million in 2010, with the percentage growth in expenditure slowing in the fourth quarter. Net debt grew during the year, driven by acquisitions and fleet investments from €177 million in 2010 to €263 million as of the end of December.

Chief executive Magnus Rosén, said: “In 2011, we kept our focus on our existing markets, growing market share and size both organically and through acquisitions. We invested significantly in the acquisitions and the outsourcing deals, but were also simultaneously able to control the level of capital expenditure spent on new equipment fleet. As main drivers for organic growth we were more efficient in utilising our fleet. The Group’s profit development was supported by higher utilisation and rental rates that improved during the year based on the recovery in market activity, especially in the second half of the year.”

“Regionally we also continued to optimise our network, ending the year with 406 depots. We also executed our growth strategy through nine acquisitions and two outsourcing deals in 2011. Ramirent continues to hold the number one position in five out of its six geographical segments, as the competitive environment continues to witness a trend towards consolidation.”

“Activity remained strong in the fourth-quarter in most of Ramirent’s markets, especially in the Nordic countries and Europe East. In Europe Central, Poland was the clear growth engine, while market development was weaker in Hungary, Czech Republic and Slovakia. Sales continued to increase in the fourth quarter compared to last year supported by favourable mild winter weather conditions.”

“The high utilisation rates supported the profit development and price levels remained stable in the fourth quarter. We also continued to execute our growth strategy during the fourth quarter through two acquisitions in Sweden and one outsourcing deal in Denmark.”

“With our eyes directed at 2012, there are major uncertainties relating to general growth prospects in the economy, and these uncertainties may affect the demand for rental products and services. Due to the prevailing state of the markets, the visibility is low. We continue to carefully monitor the development of our market environment and maintain a high preparedness to act upon possible changes in market conditions.”

“We will continue with our current strategic objectives and the work carried out in 2011 to support organic expansion in selected product groups and customer segments. Both the industrial, public and the private sectors offer further potential for Ramirent. Our priority remains on improving price realisation and to further develop our service offering in support of this.”

“Entering 2012, we have prepared actions for different future market scenarios. We aim to be cautious in capital expenditure spending, to have strict cost control and to maintain a strong balance sheet. Adding to this our strong product offering and an extensive outlet network, we believe that we are in a good position to adapt to possible changes in market conditions during 2012.”

Vertikal Comment

This is a very solid set up numbers from Ramirent which has come through the recession in an exemplary manner. The company is well poised for further growth this year, regardless of investment levels, in spite of its cautious outlook. It has strong upside potential in both rental rate improvements and utilisation in most of its markets.

Ramirent is now the third largest publicly quoted rental company in Europe, marginally behind fellow Finn, Cramo – both of which are gaining on market leader Loxam. Ramirent’s profitability continues to compare very well with its peers, something that its on-going investment and solid organic growth are likely to maintain through 2012.