20.03.2018

48% jump for Loxam

Loxam has now published its full reports and results for 2017, showing an almost 48 percent jump in revenues with a sharp rise in profits.

Looking at the full year revenues were €1.37 billion 47.6 percent up on 2016, much of it due to acquisitions, including Lavendon and Hune. Like for like growth was still respectable at 8.5 percent. €835.4 million of the total revenue was generated in France up almost 14 percent on the year, with the bulk of the growth coming from its specialist divisions – boosted by Lavendon France. Overseas revenues almost tripled to €532.3 million. Pre-tax profits more than doubled to €103.2 million, in spite of extra financial costs involved with the mechanics of the Lavendon acquisition.

Capital expenditure for the year was €400 million - the vast majority spent on new equipment for the rental fleet - compared with €198 million last year while disposals of old equipment totalled €246 million compared to €171 million in 2016.

Net debt increased from €1.4 to €2.12 billion.

Quarterly revenues were 52.5 percent higher at €368.2 million, of which €222.5 million came from France and 145.7 million from other countries – almost 40 percent of the total.

Chief executive Gérard Déprez said: “We are particularly satisfied by our performance during the fourth quarter, which concludes an outstanding year for Loxam, combining both organic and external growth. Our 50th anniversary year will represent a milestone in the history of the company since we recorded a growth of nearly 50 percent and increased the weight of our international operations to 40 percent of our total turnover, in line with one of our main strategic objectives. We fully benefited from the confirmed recovery of the equipment rental market in all geographies, to which we responded by increased capex. The positive free cash flow recorded during the fourth quarter contributed to improve slightly our net debt to EBITDA ratio to 4.43x as of 31 December 2017. We are confident that Loxam should keep growing its revenue and EBITDA in 2018 in light of favourable prospects in both the construction market and macroeconomic trends overall.”

Vertikal Comment

The 2017 acquisitions made by Loxam are transformative and are likely to convert the company from the major French rental company with some overseas operations to a group that is not only 40 percent international, but one with senior managers with publicly quoted corporate experience who are not French.

The company also continues to discuss new acquisitions and is building a solid reputation for professionalism in its approach. While many thought it had overpaid for Lavendon it could look like a bargain in years to come, not so much for the return it brings, but more the fact that it looks set to be the key factor that took the group to a new level.

Loxam is way out in front of its competitors in Europe, with enormous growth potential. Even in this year when additional costs were incurred with the takeover battles it fought, the company turned in a reasonable profit in comparison with its peers, although net debt remains high.

Expect the company to easily exceed €1.6 billion, given the ongoing growth in the French market and completion of several smaller acquisitions in the fourth quarter. The company will of course be looking to consolidate the 2017 additions but is still well placed for further acquisitions in 2018.