Post on 17-Aug-2020
transcript
NEW GROUP STRATEGY 2020:
Shape & Share
Capital Markets Day, February 2017
Leif Gustafsson
President and CEO
1
12.00-12.05 Welcome & Introduction Mattias Rådström, SVP Communication, Marketing and IR
12.05-12.45 New group strategy Shape & Share
Leif Gustafsson, President and CEO
12.45-13.15 Financial performance & targets Aku Rumpunen, CFO
13.15-14.00 Modular Space
Strategy and growth ambitions
Petri Moksén, SVP Modular Space
14.00-14.30 Enable people to perform Petra Schedin Stergel, SVP HR
14.30-15.00 Coffee break
15.00-15.30 Improved fleet efficiency Martin Holmgren, SVP Fleet Management
15.30-16.00 Cramo Customer Centric program and Digital concept
Jonas Pärssinen, Director Business Development
Elina Aalto, eChannel Manager
16.00-16.45 Equipment Rental
Panel interview:
Central Europe, Eastern Europe and
Scandinavia
Dirk Schlitzkus, EVP Central Europe
Tatu Hauhio, EVP Eastern EuropePeter Bäckström, EVP Scandinavia
16.45-17.00 Closing and summary Leif Gustafsson, President and CEO
17.00-18.00 Closing drinks and snacks
Agenda
WWW.CRAMOGROUP.COM2
Cramo Group today1
Strategy 2020 – Shape & Share3
Agenda
2 Megatrends & growth drivers
3
#1in the Nordics (MS)
Cramo is in a strong position
14countries
324depots
15countries
230,000
rental units
150 000
#2in Europe
150,000
customers
Cramo Fortrent
Russia
Denmark
GermanyPoland
CzechRepublic
Austria Hungary
Slovakia
Belarus
Lithuania
Latvia
Estonia
Norway
Sweden
Finland
Bulgaria
Slovenia
Croatia
Bosnia and
HerzegovinaSerbia
Macedonia
Albania
Kalinin-
grad
Romania
Moldova
Ukraine
4
Sales, MEUR
712.3
6.6%
Comparable EBITA, MEUR
111.1
27.9%
Comparable EPS, EUR
1.70 ROE, %
14.9
Sales per geographical split
Profitable growth – and a mix with large potential
50%
18%
9%
4%
11%
7%
Sweden Finland Norway Denmark CE EE
5
Two stand-alone divisions
Modular Space Equipment Rental
6
7
The Cramo Rental Concept
A wide range of rental-related
SERVICES
ranging from different site services, such as
proactive site monitoring, construction site
logistics, dust-control and weather-sheltering, to
safety-related services, equipment and training.
INDUSTRIAL PROJECTS
including infrastructure, offshore and mining.
Tailor-made total
RENTAL SOLUTIONS
for more efficient, safe and environmentally
sound construction projects.
MODULAR SPACE
SOLUTIONS
matching the standards
of permanent structures
from classrooms and
daycare facilities to
high-tech offices and
accommodation.
SITE HUTS
adaptable for
various purposes
and capacity needs.
COMPREHENSIVE
RANGE OF TOOLS
and complete package
solutions in building
equipment.
Modern,
comprehensive fleet of
CONSTRUCTION
EQUIPMENT
for any type of assignments,
from major road projects to
small-scale jobs.
ACCESS
EQUIPMENT
with comprehensive
safety solutions for
working at heights.
Growth in new services and
solutions
Growth of rental and
modular space in new
sectors
Increasing rental
penetration, outsourcing
Internet of things, intelligent
life-cycle follow-up
Multichannel connectivity
with customers
7
Cramo Group today1
Strategy 2020 – Shape & Share3
Agenda
2 Megatrends & growth drivers
8
What is going on in the world?
9
50billion
600cities 70%
33%1.2billion
Generation
Connected
Urbanisation
Sustainability
Digitalisation
10
Business Environment
CSR and
sustainability are
becoming core
values
Competitors are
more active, new
ones will come and
existing ones will
develop
Will increasing
demands close the
gap between
permant and
temporary
buildings?
Digitalisation:
Creates both
opportunities and
challenges
Transparency -
Customers more
aware of cost/value
If you are not a
shaper you are a
follower
and you have to
rely on others to
shape
your tomorrow
11
Underlying drivers support propensity to rent
Outsourcing - Increasing
rental penetration
Growth in rental-
related services
Switch from manpower
to machine
Growth in renovation
construction in mature
construction markets
MEGATRENDS
Migration
Urbanisation
Ageing
Globalisation
Digitalisation
Sustainability
Environmental and
climate awareness
Increased energy
efficiency
requirements
Accelerating technological
development
Global and local
demographic changes
More stringent
environmental laws and
international agreements
to mitigate climate change
SOCIETY PUBLIC SECTOR CONSTRUCTION OTHER INDUSTRIES
Growth in new services and
solutions
Growth of rental and
modular space in new
sectors
Increasing rental
penetration, outsourcing
Internet of things, intelligent
life-cycle follow-up
Multichannel connectivity
with customers
EQUIPMENT
RENTAL
DRIVERS
MODULAR
SPACE GROWTH
DRIVERS
Economic benefits,
change in mindset
Greater preference
for total solutions
Need to improve
productivity
Quality problems
(mold and moisture)
in construction
Ageing of buildings
Dynamic, changing
environment
creates demand
Site-specific space needs
during renovation periods
Fluctuating space needs:
daycares, schools,
accommodation
End users increasingly require
permanent-like quality
Need for energy-efficient
solutions
12
Cramo Group today1
Strategy 2020 – Shape & Share3
Agenda
2 Megatrends & growth drivers
13
Do you want to be a shaper or a follower?
Do you want to share?
14
PurposeWhy do we exist?
VisionWhat do we want to be?
MissionWhat do we want to accomplish?
StrategyOur plan to reach vision, mission and purpose
Focus areasHow we drive our strategy
ValuesOur common platform and foundation
Strategy: Shape & Share
15
We will capture the potential in our markets
• We enable Cramo people to achieve top
performance
• We significantly stretch our core business
models
• We rapidly grow Modular Space in chosen
European markets
• We establish game changing offerings in
sharing resources
Strategy: Shape & Share
We shape our
We share
• Industry
•Offerings
•Organisation
•Attitudes
•Resources
•Best Practices
• Ideas
•Values
16
The roadmap is clear
AlignImplementing common processes and tools
Living the Cramo Story
Operational efficiency
OptimiseShaping the business structure and model
Enhancing the performance culture
Creating a digital concept
GrowthBuilding a new footprint in chosen markets
Targeting organic growth
Evaluating potential acquisitions target companies
17
Key focus areas
Enable People
to PerformStretch business
models
Game-changing
offerings
Secure resources
in Modular Space
& capture potential
in Germany
18
We enable Cramo people to achieve
top performance
The Cramo future starts with the development of our culture
and people.
We strive to have a culture build on pride in performance and
passion for improvements. We have a clear understanding of
roles and responsibilities throughout the organisation. We work in
teams and focus on customer satisfaction.
We use digital tools in our daily work and understand the value
of ecommerce, mobility, internet of things.
By 2020 Cramo will attract the best people. We hire for attitude
and train for skills. We share best practises and grow our people
by job rotation and continuous competence development.
Develop
People’s Core
Competences
Root
Performance
Culture
Drive Cramo
Story
Roll-out
Cramo Care
CSR program
1
19
We significantly stretch our core
business models
We will look for opportunities both in the borderland to our
current offerings and business model, as well as totally new ways
of creating value with our organisation and customers.
We nurture a truly innovative culture in our organisation.
– Create an independent organisation to drive the
innovations and new business development,
– Enhance the innovation harvesting in our current
organisation, searching for and gathering good ideas and
possibilities from our staff.
– Test and possibly implement the innovations in a fast trial
and error method utilising an established Proof of Concept
process.
By 2020 we have created new business models and concepts
which can and will shape the future of construction machine
rental business.
2Establish
Cramo
Innovation
Lab
Beat Cramo
Business
Model
20
We establish game changing
offerings in sharing resourcesBy differentiating our offerings and pricing to different
customer segments and behaviour we will sharpen our go
to market activities and deliver more spot-on offers
based on customers’ needs.
We will restructure our logistic network based on the
segmentation and customer offerings to enable precision
and efficiency in ordering and delivering processes. We
focus on value creating items that our customers
perceive, using our depots, digital and sales channels to
strengthen and clarify our offers to the market.
By 2020 Cramo has a new structure that is based on
efficient internal processes and set up as well as being
customer oriented; “the right products and solutions for
the right customers at the right time and to the right price”.
3Differentiate
Segment
Offerings
Roll out new
Order &
Delivery
Platform
Shape
Cramo Brand
21
In order to pursue strong organic growth Cramo Modular
Space needs to increase its resources – both personnel,
product and network.
We change the game plan: our delivery channels are easy
to understand and simple to use. Our process and
organisation supports our customer operations and allows
us to deliver projects fast and with high quality – we even
aim to exceed our customers’ expectations.
We will better be able to predict and estimate our near
future need for different resources. Our systems are
supporting us in our actions and decisions. We can adjust
our production capacity quickly and cost efficiently
according to the market demands.
By 2020 we have harmonised our sourcing and purchasing
operations which allow us to increase our efficiency and
improve our timing of the needed capital.
We break new grounds in
Modular Space…4Enable
people to
perform
Simplify
delivery
platform
Shape
scalable
production
capacity
22
Central Europe, and Germany especially, is the main
organic growth area for Modular Space.
We will expand our offering both geographically as
well as with all products and segments in the region.
We will build a strong network of our own sales
offices, hubs and warehouses, supported by well
working sub-contractors. We harmonise our
processes, systems and operations to get scale
benefits.
In order to even boost our growth plans, we will carry
through few acquisitions. We will integrate the new
organisations systematically to Cramo Adapteo.
…and capture the potential in
GermanyExpand in
line with
our current
offering
Execute
additional
growth
through
M&A
5
Invest to a
comprehensive
network
23
Way forward to capture potential
Align,
optimise,
grow
Leading
position
2divisions
Enable
people
to
perform
Innovation
24
Conclusion• New strategy ”Shape & Share”
• Two stand alone divisions
• Align, optimise, grow
• New financial and non-financial targets
25
Financial
performance &
targetsCapital Markets Day, February 2017
Aku Rumpunen
CFO
26
Financial performance 2013-20161
3
Agenda
2
Financial targets 2017-2020
Segment structure and market outlook
27
Sales growth and profitability improvement
Sweden
ER: #1
MS: #1
103 104 111124
19 20 22 28
18,8%
19,6%
20,2%
22,0%
15%
16%
17%
18%
19%
20%
21%
22%
23%
0
50
100
150
200
250
300
350
400
Finland
ER: #2
MS: #1
317 313331
356
55 56 62 74
17,5%17,8% 18,6%
20,7%
15%
16%
17%
18%
19%
20%
21%
22%
23%
0
50
100
150
200
250
300
350
400
2013 2014 2015 2016
Sales, EBITA & EBITA marginmEUR
Note: Numbers presented as comparable EBITA and EBITA margin
28
In Norway solid profitability with sliding sales, in Denmark
profitability improvement
29 30 28 32
0,3-1
2 40,1%
-4,0%
6,6%
12,6%
-5%
0%
5%
10%
15%
-20
0
20
40
60
80
100
2013 2014 2015 2016
Norway:
ER: #3
MS: #4
Denmark
ER: #5
MS: #1
9183
70 67
7 4 5 5
7,3%
5,4%
7,7%7,7%
0%
5%
10%
15%
0
20
40
60
80
100
Sales, EBITA & EBITA marginmEUR
Note: Numbers presented as comparable EBITA and EBITA margin
29
Central Europe turned profitable, while stable development
in Eastern Europe
75 78 77 79
-1-6 -2
4-1,4%
-7,7%
-3,2%
5,0%
-10%
-5%
0%
5%
10%
15%
20%
-20
0
20
40
60
80
100
2013 2014 2015 2016
Central
Europe
DE: #4
AU: #2
Eastern
Europe#2 in Baltics, and
one of the leading
rental companies
in Poland, Czech
Republic and
Slovakia
53 50 51 50
8 6 6 6
15,5%
12,3% 12,3%12,2%
0%
5%
10%
15%
20%
0
20
40
60
80
100
Sales, EBITA & EBITA marginmEUR
Note: Numbers presented as comparable EBITA and EBITA margin
30
578 560 568595
8353 66 90
14%
9%12% 15%
0%
5%
10%
15%
20%
25%
30%
35%
0
100
200
300
400
500
600
700
81 93 100 118
26 27 30 31
32%29% 30% 26%
0%
5%
10%
15%
20%
25%
30%
35%
0
100
200
300
400
500
600
700
Equipment
Rental
Modular
Space
Financial performance by business divisions
2013 2014 2015 2016
mEUR Sales, EBITA & EBITA margin
Note: Numbers presented as comparable EBITA and EBITA margin
31
1,0
1
0,9
1 1,1
3
1,5
4
0,6
0
0,5
5
0,6
5
0,7
5
13
14
15
16
72,9
%
84,7
%
75,1
%
74,5
%
13
14
15
16
8,3
%
8,3
% 10,9
%
14,9
%
13
14
15
16
Financial targets from previous strategy period
achieved
Profitability
EBITA-% > 15 % of
sales over a
business cycle
Gearing
Gearing maximum
100 %
Sales
Sales growth faster
than the market
Return on equity
ROE > 12 % over a
business cycle
Profit distribution
Profit distribution
policy: stability, with
appr. 40 % of EPS
EPS DPS
Target Level Target Level
Target Level
Note: EBITA margin and ROE presented before items affecting comparability.
* ERA market report 2015-2016 with constant 2012 FX rates in markets in question.
12,2
%
11,2
%
13,0
% 15,6
%
13
14
15
16
Target
Level
2,9
%
3,1
%
Rentalmarket*
Cramocomparablesales growth
CAGRs 13-16
32
Financial performance 2013-20161
3
Agenda
2
Financial targets 2017-2020
New segment structure and market outlook
33
Net sales (mEUR)
EBITA (margin-%)
379
65 (17%)
New segment structure and financials 2016
ER ScandinaviaER Finland and
Eastern EuropeModular SpaceER Central Europe
ROCE %
17%
Net sales (mEUR) Net sales (mEUR) Net sales (mEUR)
EBITA (margin-%)
22 (16%)
ROCE %
EBITA (margin-%)
4 (5%)
ROCE %
EBITA (margin-%)
31 (26%)
ROCE %
139 79 118
12% 4% 11%
FORTRENT
Numbers presented as comparable EBITA, EBITA margin and comparable ROCE %
34
FINLAND
SWEDEN
GERMANY
NORWAY
ER FINLAND
MS FINLAND
Sales disclosed from largest countries by business division
ER SWEDEN
MS SWEDEN
ER GERMANY
MS GERMANY
ER NORWAY
MS NORWAY
98
31
299
58
62
9
60
7
2016 sales (mEUR)
35
Rental penetration (%)
Construction
market
(BEUR)
Rental
Market
(BEUR) 2.9
Economical indicators and market outlook
ER ScandinaviaER Finland and
Eastern EuropeModular SpaceER Central Europe
Construction
market
(BEUR)110
Rental penetration (%)
0.7
90Rental penetration (%)
Market position
Construction
market
(BEUR) 370
#3-5
1.2
#1 Nordics
Construction market growth (%),
Euroconstruct Dec 2016
Rental market growth (%), ERA June 2016
3,6
%
2,2
%
2,5
%
2,7
%
1,6
%
3,1
%
4,8
%
4,4
%
5,3
%
2,1
% 2,5
%
2,3
%
2,0
%
1,2
% 0,6
%
3,7
%
1,7
%
2,5
%
2.6
Rental
market
(BEUR) 0.6Rental
market
(BEUR) 4.5
2016E 2017F 2018F2016E 2017F 2018F2016E 2017F 2018F
Share of sales from public
sector
Urbanisation rate in EU*
>60%
6,9
% 8,0
%
Organic rentalorderbook growth
Organic rentalsales growth
GAGR 14-16
1990 2014 2050E
70% 73% 82%
*) World urbanisation prospects 2014, United Nations
36
Financial performance 2013-20161
3
Agenda
2
Financial targets 2017-2020
Segment structure and market outlook
37
Fleetefficiency
People perfor-mance
Innovation
More out of engine
Enable people to
Perform
Capturing operational
excellence
Simplifying customer
offerings
Shaping the future
38
Enable people to
Perform
Secure resources
Capture potential in
Germany
Shaping the future
Equipment Rental Modular Space
38
Specific financial targets for two business divisions to
better drive growth & returns
Profitability
EBITA-% > 15 % of
sales over a
business cycle
Debt leverage
Gearing maximum
100 %
Sales
ROE > 12 % over a
business cycle
Profit distribution
Stability, with appr. 40
% of EPS
Sales growth faster
than the market
STRATEGY
2013-2016SHAPE & SHARE
2017-20
Individual ROCE
targets for ER and MS
GROUP ROE target
NET DEBT / EBITDA
Different sales targets
for ER and MS
Pay-out ratio
Two individual business models
ROCE better target measure for
capital intensive businesses
Leverage strong balance sheet, net
debt / EBITDA better measures the
debt paying capacity
39
Organic sales growth
> market
ROCE > 14.5%
Financial targets for Cramo Group 2017-2020
Equipment Rental Modular Space
Net Debt / EBITDA < 3x
ROE > 15%
Dividend payout ratio ~40%
GROUP
Double digit organic rental sales
growth
ROCE > 12.5%
* Financial targets: on average during 2017- 2020
* ROCE = EBIT / capital employed (average)40
14,0 %
12,7 % 12,4 %
11,1 %
12,5 %
2013 2014 2015 2016 2017-20
MS ROCE Target Avg. 2013-16
7,3 %6,5 %
9,2 %
13,6 %
14,5 %
9,1 %
2013 2014 2015 2016 2017-20
ER ROCE Target Avg. 2013-16
ROCE targets to drive efficient capital allocation to
capture return and growth potential
Equipment Rental Modular Space
41
8,3 % 8,3 %
10,9 %
14,9 %
15,0 %
12,0 %
2013 2014 2015 2016 2017-20
Comparable ROE Target 2017-20 Target 2013-16
Return on equity target increased to 15 %
• ROE target increased by
300 basis points from
previous target
• Target increased based
on higher targeted ROCE
by two business divisions
ER / MS
42
Strong balance sheet enables to grow when
returns available
• Debt capacity for growth and M&A when returns
are available
• Financial headroom > EUR 250m
NET DEBT / EBITDA
• Complementing services, capabilities, products
and know-how
• Entry to new attractive markets
• Integration and cultural assessment
Strategic fit
• Fulfilling financial targets i.e. return on capital
employed
• Shareholder value creative
Valuation and returns
Capacity to grow
2,10
2,30
1,98
1,77
3,00
2013 2014 2015 2016 2017-20
Net debt / EBITDA Group
Net debt / EBITDA Target
43
Debt maturity structure and available facilities
• Undrawn committed credit
facilities EUR 206.1m
• EUR 250m revolving credit
facility
• EUR 150m senior bond
maturing in February 2018
• EUR 375 unsecured syndicated
facilities maturing in January
2020 and 2021, consisting of EUR
125m term loan and EUR 250m
revolving credit facility
• EUR 200m commercial paper
program
Current debt financing
arrangements
Liquidity position
-50
50
150
250
350
450
550
650
12/2016 12/2017 12/2018 12/2019 12/2020 12/2021 12/2022
EU
R m
illi
on
Bond 2022 Bond 2018
Syndicated Term Loan & RCF Commercial Papers
Other Debt Undrawn Committed Facilities
44
Targeted higher returns will generate higher operative and free cash flow, however
leaving room for growth investments when returns are available
Flexibility in cash flowsInvestment cash flow largely subject to Cramo’s discretion
45
104
139121
77
68
138 146160
118
175 172
-96
-175
-217
-11 -41
-194
-84-110
-125-139
-165
8
-37
-96
65
27
-55
62 50
-6
367
-300
-200
-100
0
100
200
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
EU
R m
illi
on
Cash flow from operations Cash flow from investments
Free cash flow
45
Summary: Group financial
targets – Vision 2020
AlignAlign operations within two individual business divisions to create operational
excellence and realise group synergies
OptimiseOptimise capital allocation to generate higher returns and
capture growth potential in chosen markets
GrowthGrow organically supported by acquisitions
Perform to achieve higher returns that satisfies stakeholders
while Shaping the whole industry with Sharing Economy
MS + ER
46
Conclusion
• Growth and performance
improvement targeted for 2017-2020
• Financial targets set separately for
two business divisions
• More focus on capital efficiency
• New reporting segments to reflect
strategy execution
47
Petri Moksén
SVP, Modular Space
Modular Space
48
Overview of Modular Space
Complete
package
Central
Europe#1
Nordic market
leader
Full
life-cycle
4Solutions
Driving
customer
advantages
49
How it works
Analysis &
design
Assembly Maintenance &
service
Disassembly
& removal
50
51
To whom
Schools
Offices Accommodation Daycare
52
Services in addition to the rental offering
During deliveryCustomisation of the units
Transport to project site
Assembly of the units
Other services
During rental period
Maintenance
During returnDisassembly of the units
Transport off-site
Reset of customisation of the units
Other services
53
Number of modules returned & delivered
• Units delivered
– 2016: 5572
– 2015: 3530
• Units returned
– 2016: 3938
– 2015: 2428
54
55
Cramo AdapteoTemporary space needs
Schools Daycare
Office space Accommodation
Cramo rebranded its high
quality modular space
operations as Cramo Adapteo
in early 2014
Adapteo’s main customer
group is the public sector.
Industrial companies and large
projects also important
Temporary need
Site-specific
Initial need often for 2-3 years, but contracts typically
extended up to 5 years
Competitive solutions especially for site-specific space need
(e.g. schools)
The Cramo Modular space conceptFlexible solutions for wide array of temporary space needs
55
56
Cramo Modular SpaceTemporary space needs
Modular space provides stability and visibilityFlexible solutions for a wide array of temporary space needs
Schools &
Daycare
Offices
Accommodation
Share of group 2016
Steady cash flow with a
significant contribution to
group profitability
Key focus segment in
investments and an
important growth area for
the group
Highlights
The fact that the main customer group is the public sector provides diversification
benefits
EBITASales EBITDA
Capital
employed
16%
21%
26%
32%
56
Cramo Story and Adapteo Proofs of Promise
Always
responsive
A perfect
delivery
Uptime is
key
57
• Sales growth + 18,6 %
• Strengthened position in Germany
• Product and solution development
• New innovative solutions
Highlights of 2016
58
Slush event, Helsinki, Finland 2016
59
Bauma 2016 in Munich, Germany
60
61
Organisational and operational model
• Best-in-Class, business excellence model built-
in to the organisation and to the way of working
• Fully operating cross-border model
• Target improvement
– Price management and price increases
– Cost control
– Efficiency in all operations
– Securing maximised profit
• Decentralised organisation and operational
responsibility
• Organisational model supporting our expansion
in current countries as well as to new countries
62
Growth drivers – constant demand for new space
Increased
flexibility
Rapid
changes in
dynamics
Increasing
urbanisation
Shorter
lifecycles
Increased
sustainability
awareness
Faster
speed of
delivery
Improved and
transparent
cost capital
efficiency
Matching
quality
Business model, operational model driversMarket and customer growth drivers
63
Actions to pursue growth opportunities
ORGANIC + ACQUISITIVE GROWTH
• Utilising brand
• Leveraging the large and versatile fleet
• Technical expertise
• Differentiation opportunities
• Best-in-Class
• Proactive sales work
• Cost competitive, flexible and scalable
• Synergies from Cramo Group
• Energy efficient - new fleet
• Consolidation opportunities in selected
markets
64
Shaping
the futureResourcesPeople Germany
Strategy focus points
65
Conclusion• Strong sales growth
• Capturing potential in Germany
• New strategy focus areas about people,
resources, Germany and shaping the
future
66
Enable people
to perform
Petra Schedin Stergel
SVP Human Resources
67
“Always treat your employees
exactly as you want them to treat
your best customers.”
– Stephen R. Covey
68
People Vision 2020 – a part of Shape & Share
• We recruit• We develop• We learn and share• We are role models
69
70
We live in a changing world…
Shift in global economic power
Demographic and social change
Resource scarcity
Technological break-throughs
…with a changing talent market
Differentiate
Distinct
Relationships
Leaders
Collaborate
71
Our People-work is clearly linked to the
overall business strategy, vision and goals.
AlignImplementing common processes and tools
Living the Cramo story
OptimiseShaping the business structure and model
Enhancing the performance culture
Creating a digital concept•Enhancing the pe
GrowthBuilding a new footprint in chosen markets
Targeting organic growth
Evaluating potential acquisitions target companies in
new markets
72
Develop our People Business
Vision
WhatBusiness strategy
HowPeople strategy
Marketing
Sales
Product -
development
Employer Branding
Recruitment
Employee
Engagement
Our People-work is
clearly linked to the
overall business
strategy, vision and
goals.
73
What makes us great: professional experience
CUSTOMER JOURNEY EMPLOYEE JOURNEY
Determines whether potential and
existing customers will buy and
recommend our products and services
Determines whether potential and existing
employees will choose us, feel the
engagement and recommend us as an
employer
74
Focus area: Enable people to perform
Develop
People to
Perform
Roll-out
Cramo CareDrive
Cramo Story
Root
Performance
Culture
1 2
43
75
Next step: create a People strategy
PURPOSE. Describe…
• … and explain expected behaviors and Cramos values
• … which activities we will prioritise in order to attract and retain the
right employees
• … what and how to communicate regarding our employee value
proposition
CONTENT. Define and describe…
• … our common people processes.
• … our common people KPI’s.
• … managers responsibilities visavi their employees.
• … HR responsibilities.
76
Employee lifecycle: the people business
Define common processes within
every area to make sure we follow
our strategy and deliver quality.
Employee
lifecycle
Exit Attract
Develop &
Motivate
Introduce
Recruit
Customer
77
Cramo Story
• Differentiate from
competitors
• Strengthen brand
• Passion to meet
expectations
• Contribute to customers’
success
78
Cramo Story – next step
Package all HR-tools
and communicate
great internal stories
Your performance:
How should I create
a great day at work
Consequence
Create a clear
People perspective
How:
My great day at work
Link Strategy
Cramo Story
Values and
Behaviors
Employee lifecycle:
Systems and tools
Happy people
Happy customers
Define leadership
Be a role model
Own Cramo Story from
the top
See the
individuals and
build the team
spirit
One Cramo also on
the inside
79
Sustainability• Growth
• Risk
management
• Return on
capital
CUSTOMER CARE
• Customer
satisfaction
• Safe solutions
• Energy-efficient
solutions
• Anti-corruption
and high business
ethics
EMPLOYEE CARE
• Diversity and equality
• Safety
• Recruitment and
competence
development
• Dialogue,
empowerment and
satisfaction
ENVIRONMENTAL CARE
• Energy efficiency
• Resource efficiency
• Waste management
• Low emissions
SOCIAL CARE
• Local engagement
• Compliance with laws,
regulations
• Waste management
• Low emissions
COMMITMENT AND PRINCIPLES
Code of Conduct and Business Ethics
Supplier Code of Conduct
UN Global Compact
ISO
Cramo Care – our strategic approach on
sustainability
80
Conclusion• We will enable people to perform
• We will root performance culture
• We will drive Cramo Story
• We will roll-out Cramo Care
81
Fleet optimisation and
the digital journey
Martin Holmgren
SVP Fleet Management
82
Introduction to Fleet Management
Mission:
Optimise
assets and
drive
digitalisation
Objective:
focus on
ROCE
Fleet size:
230,000New digital
strategy
83
Key success factors
• Harmonised and digital fleet
processes
• Strict control of investment
releases
• Fleet efficiency focus and
common fleet KPI’s
• Professional purchasing
organisation
• Internet of Things innovations
84
Next level of fleet optimisation to meet new financial targets
Continuous
development
Cramo
Field
TMS
C-
Buy
85
Digitalisation trends and drivers
Sustainability IoT
Digital
development
for a
sustainable
business
New
governance
model
86
Harmonisedprocesses and
It-systems
-2013
Performance management
and digitalisation of
processes
2014-2016
IoT and new business solutions
2017-2020
The future of IoT in rental
2020-
Cramo’s digital development path
87
OEM systems
Cramo - Generic
connection box
and user
interface
Data exchange
standards
IoT value chain development and obstacles
Rental companies and
multiple fleet owners
have invested in generic
systems disconnected to
the OEM systems
OEM ’s have invested
in their own application
software systems,
mostly used by small
fleet owners and
themselves
Associations develops
towards standardisation
(ERA, VDBUM, ISO,
AEMP/AEM) OEM takes
part in this development
Propriety system
A major success factor is further
standardisation of data collection and
data communication to connect OEM’s
data sources with rental companies
application systems
88
We have track units on 10,000 machines
TODAY FUTURE NEEDS
• Identifying where the equipment is in
case of theft
• Engine hours are updated with
information of running hours to trigger
preventive service orders and alert us
that it is time for service.
• Invoice customers
• Included in equipment insurance model
• Access control, meaning if you
don’t have the right training, you
can’t use the equipment.
• Reception of machine failure codes
so we can use them for our needs.
• Automated return control process
solutions
89
Value proposition
Machine health
Run time data
Customer
Sell data
Machine Control
Positioning Remote error
Firmware
90
Conclusion• Well positioned to capture the potential
in digital
• Next level of fleet management will
support financial target
• Moved towards fully connected fleet
• We are shaping the way of doing
business
91
Cramo Customer
Centric Program
Jonas Pärssinen
Director Business Development
92
New types of companies are taking over
93
Before
Now
94
We are in the Age of the Customer
Age of Manufacturing
Mass manufacturing
makes industrial
powerhouses
successful
• Ford
• General Electric
• Boeing
Age of Distribution
Global connections
and transportation
systems make
distribution key
• Grocery Chains
(Wal-mart,
Target)
• Toyota
• IKEA
• UPS
Age of Information
Internet connects
information, supply
chains and value.
• Google Search
• Amazon
• Comcast
Age of the Customer
Empowered buyers
with full mobile
access demand a
new level of
customer obsession.
• Uber
• AirBnB
• Sunfleet
• Google Now
1900 1960 1990 2010
Evolution of Value Creation
95
Rethink how we create value for our customers
96
97
Arenas of Development & Transformation
Digital Business Production
Cramo Customer Centric Initiatives
98
DigitalHome pages and social
media presence
Digital platform with
tools and near endless
possibilities to serve
our Customers
BusinessDepot roles, market
presence and
Customer Service
Customer Offerings,
Pricing & smart
Segmentation
Production
Efficient Supply Chain &
Fleet optimisation
Enhanced network
and structure
Cramo Customer Centric Initiatives
99
Conclusion• We rethink what creates value
• Cramo will enter the age of the
customer
• We focus on clear initiatives:
Digital, Business, Production
100
Elina Aalto
eChannel Manager
DIGITAL CRAMO
101
Digital at Cramo
New
website
2017:
Breaking
year
eCommerce
tool:
Cramo
eCRent
New digital
strategy
102
Digital vision & mission
Vision:
Digital change leaders
Shapers, not
followers!
Mission:
Easy accessible, always
open channels that adds
value
103
eCommerce solution Cramo eCRent supports the
customer throughout the customer journey
Efficient portal for account and rental
management
Easy to find products
Detailed product data
Accurate availability information
Easy to make transactions
Easy access
104
Cramo eCRent eCommerce value proposition
A GREAT DAY AT WORK
Quick and easy to use
Ordering and returning one
click away
Next day delivery with
wished time slot
All order information and history in one
source
Enhanced and accurate product
information always available
All jobsites in one portal
Always open
105
Collecting customer data has never been easier
Improve
Analytics
Customer
behavior
Big
Data
106
Prioritisation
Digital channel development is a journey that
should never end
Digital channels 1.0
Analytics Testing Backlog Innovations
Optimised digital channels & engaged customers
107
Conclusion• 2017 is a breaking year for Digital
Cramo
• We want to be digital change leaders
• We are shapers, not followers!
• New websites and Cramo eCRent
108
New segment structure
17% 12% 4% 11%
FORTRENT
ER ScandinaviaER Finland and
Eastern EuropeModular SpaceER Central Europe
Net sales (mEUR)
EBITA (margin-%)
379
65 (17%)
ROCE %
Net sales (mEUR) Net sales (mEUR) Net sales (mEUR)
EBITA (margin-%)
22 (16%)
ROCE %
EBITA (margin-%)
4 (5%)
ROCE %
EBITA (margin-%)
31 (26%)
ROCE %
139 79 118
17% 12% 4% 11%
109
Highlights from 2016Footprint
XX% YY%
Equipment Rental in Scandinavia
Scandinavia
Eastern Europe
Central Europe
Focus going forward
Net sales (mEUR)
EBITA (margin-%)
379
65 (17%)
ROCE %
17%
• Increased revenue and EBITA at the same time
• Performance management
• Customer centric improvement
• Shape and Share attitude
• Right leadership - retain and attract talent
• Digitalisation
110
Focus going forward
Footprint
XX% YY%
Equipment rental Finland and Eastern
Europe
Scandinavia
Eastern Europe
Central Europe
Highlights from 2016
Net sales (mEUR)
EBITA (margin-%)
22 (16%)
ROCE %
139
12%
• Strong sales growth and improved profitability in
Finland
• Successful implementation of Cramo Story
• Good results from Performance management
• Differentiation through customer experiences
• Leverage possibilities in digitalisation –
e-commerce and Internet of Things
• Drive performance management
FORTRENT
111
Footprint
XX% YY%
Equipment rental in Central Europe
Scandinavia
Eastern Europe
Central Europe
Highlights from 2016
Focus going forward
Net sales (mEUR)
EBITA (margin-%)
4 (5%)
ROCE %
79
4%
• Long and tough journey last 4 years –
Turnaround done!
• Major change program regarding business
model, peoples mind set, processes and
supporting systems
• Rolling out new order and delivery platform >
Simplify customers Life
• Excel in price management
112
FOR A GREAT DAY AT WORK
CRAMO Capital Markets Day
SUMMARY AND Q&A
Leif Gustafsson,
President and CEO
16 February 2017
113
Cramo Strategy 2020: Shape and Share
3
Focus on further profitable growth
• Existing and new markets
• Organic growth + M&A
• Customer centric and innovation
Focus on further alignment and optimisation
• Leverage group synergies
• Unified processes and tools
• Further digitalisation
Focus on people performance
• Talent management
• Enhance performance culture
• Living the Cramo Story2020
Align
Optimisation
Growth
114
Conclusion
• New strategy to shape the future
• New financial targets
115
Appendix
116
Equipment Rental Strategy
Enable People to
Perform
Shape the FutureCapture Operational
Excellence
Simplify Customer
Offerings
1 2
43
2.1 Differentiate Segment
Offerings
2.2 Roll out new Order &
Delivery Platform
2.3 Shape Cramo Brand
4.1 Cramo Innovation Lab
4.2 Beat Cramo3.1 Develop Sales
Performance
3.2 Excel in Price
Management
3.3 Improve Fleet
Efficiency
1.1 Develop People’s
Core Competences
1.2 Root Performance
Culture
1.3 Drive Cramo Story
1.4 Roll-out Cramo Care
117
Modular Space Strategy
Enable People to
Perform 1.1 Living Individual
Performance Culture
1.2 Drive Cramo Story
1.3 Attract & Develop
Strategic Competences
Secure Resources2.1 Recruit and integrate
people
2.2 Simplify Delivery
Platform
2.3 Shape scalable
production capacity
Shape the Future4.1 Create digitalized
concepts
4.2 Increase sustainability
in business
4.3 Commercialise new
Adapteo Business Units
Capture the Potential
in Central Europe 3.1 Expand in line with
our current offering
3.2 Invest to a
comprehensive network
3.3 Execute additional
growth through M&As
1 2
43
118
Videos shown during the Capital Markets Day can be found at:
https://www.youtube.com/playlist?list=PL9mLcx7rpIPfBcwNNMiowr92hz6WsC7HO
119