25.03.2009

Loxam up 15%

In an interview with the local press, Loxam has reported that group revenues in 2008 were €848 million, 15 percent up on 2007. Net profits dropped 32 percent to €37.1 million.

Loxam’s president Gérard Déprez said that he expects revenues in 2009 to fall back between five and 15 percent, but that the company is prepared for the downturn.

He added that 2008 started well but began to soften in the third and fourth quarters as the financial crisis began to bite. 2008 revenues benefited from the full year contribution of several acquisitions in Denmark and Spain made during 2007 plus the addition of LEV purchased from Haulotte in January 2008.

At the end of the year the total number of outlets was 543, compared to 541 at the end of 2007. All but 88 of the locations are located in France.

Déprez says that he expects the current slow down to last around 18 months to two years, but is still targeting revenues of a €1 billion by the end of 2010. However he adds that the company is slowing its acquisition plans and cutting some costs in order to adjust to the current climate. These include a six percent reduction in employees, currently 4,400 mostly by natural attrition.

At the same time the company will trim its fleet of equipment by around five percent and look to improve utilisation.

Vertikal Comment

Loxam appears to be in a better shape than some of its major competitors, although as it is not a public company information is scant. The company has made a large number of acquisitions over the past few years but does not seem to develop them outside of France.

While the headline revenues for 2008 are up 15 percent, if all the acquisitions are taken into consideration the group grew very modestly at best.

However assuming that the group’s debt level is manageable and secured, the fact that it is closely held and that a large portion of its revenues and profits come from France, which appears to be faring better than many other markets, could allow it to move ahead of its publicly held competitors.

Déprez is a shrewd operator and will be well prepared to take advantage of the opportunities that are likely to arise.