A successful year of shaping and sharing
2017 was the first year of Cramo’s new four-year strategic period, which runs from 2017 to 2020. We started to execute our Shape and Share growth strategy, and took several strategic steps on our journey towards our vision, Shared Resources Simplified. In addition, we also sharpened our role as the shaper of the industry.
One of the major changes was in Cramo’s business structure, with the separation of operations into two business divisions – Equipment Rental and Modular Space. This was done in order to provide the best basis for future growth for the two different businesses. In 2017, the demand for equipment rental and modular space was good in our main markets.
The Equipment Rental division’s performance was strong. Sales increased sharply in Sweden and Eastern Europe. Our sales in Central Europe also increased in most markets. In Finland, Norway and Germany organic sales growth was more modest. Actions were taken in these markets to steer sales back on the growth track. We aim to strengthen our position in markets where we have market-leading potential and during the year divested our operations in some markets where we saw that the long term return potential was weaker. All in all, the outlook for the European market for equipment rental for 2018 is positive and the market is expected to grow.
In Modular Space, the development of rental sales was good, but the result was a disappointment. The profitability was burdened by cost overruns among other things. In the end of the year, we reorganized our activities and improved the efficiency of our project management. Positive effects are expected to follow these actions in 2018. To capture the potential in the Danish market, we acquired the assets of Just Pavillon A/S. The market outlook for modular space rental is positive, and we will continue to invest in further growth in this strongly growing market.
Responsible sharing of resources
Our two divisions differ in several aspects, such as business dynamics, business models and customers, and also have partly different growth drivers. That is why we decided to develop them separately and thus ensure optimal growth for both. What the divisions have in common is that they both offer solutions for some of the biggest challenges of our time, such as urbanisation, demographic changes, migration and the urgency to expedite sustainable development. Sharing resources responsibly is one way to address these developments.
Executing the Shape and Share strategy
As part of our new strategy, we have also defined new financial and non-financial targets. The new financial targets, which provide more relevant information about our performance, are now set for the Cramo Group and the two divisions separately.
Looking at the business and the operational level, our divisions share many beneficial factors. These are embedded in our Shape and Share strategy, including a strong innovation and performance culture, sustainable solutions and digitalisation, which enables new ways to share solutions, processes and insights with our stakeholders, just to name a few.
The operational synergies, however, are limited. That is why, also in line with this strategy, Cramo has decided to further investigate and assess the potential separation of the Modular Space division. The assessment of different strategic alternatives will be carried out in 2018.
Our aim is to shape not just our own operations but the whole industry. Capturing the opportunities inherent in digitalisation is one good example. Our ground-breaking digital solutions already enhance our operational excellence and have taken interaction with our customers, suppliers and partners to a totally new level. This enables us, for example, to develop solutions that meet the changing needs of our customers even more precisely and to offer state-of-the-art customer experiences.
“Cramo people have the right attitude
and the high level of ambition needed to
become the shapers of the industry.”
Enabling innovations and top performance
The importance of building a strong innovation culture throughout Cramo cannot be stressed enough. In a rapidly changing world where entire industries are disrupted almost overnight, we need every employee’s competence, know-how and ability to identify development areas in order to create novel, value-adding solutions and services for our customers.
In terms of building our innovation culture and achieving our ambition of enabling our employees to perform, a new People Strategy was introduced at the end of the year. This strategy will help us support competence development and attract potential employees with the right qualifications to foster the future success of Cramo. Our new brand platform, also launched during the year, is closely linked to the ambitions of our People Strategy. The new brand platform more clearly expresses what Cramo is and what it stands for, and sends a strong, engaging message to internal and external stakeholders.
I want to thank shareholders for your loyalty and trust in 2017. We continue our efforts to generate increasing value for you in the long term. By delivering on our Shape and Share strategy, we are building an operational model and platform for future growth that will ensure our success in all phases of the economic cycle.
President and CEO