Modular Space – ensuring future growth by shaping our way of working

The non-cyclical modular space business offers stability as well as promising organic and inorganic growth opportunities. During our first year as a separate business division, we took several actions to secure a solid platform for future business growth. Special emphasis was put on shaping and optimising our organisation, resources and processes along with refining our solution offering.

The Modular Space business division, Cramo Adapteo, encompasses the company’s premium modular space rental and rental-related service operations. Our solutions are high quality, flexible, cost-effective, energy-efficient and sustainable, and they deliver a user experience comparable to that with permanent buildings. They are especially designed to meet the demanding needs and requirements that apply to temporary space solutions for schools, daycares, offices and accommodation, but are also used for events, exhibitions, shops and other application areas, to name a few.

We serve both the public and private sector and deliver comprehensive temporary space solutions as turn-key projects that include needs analysis, design, planning, assembly, maintenance and other services during the rental period as well as disassembly. Approximately two thirds of the division’s business consists of modular space rentals and about one third consists of rental-related services.

#1

 IN MODULAR SPACE IN THE NORDIC COUNTRIES 

5,960

NUMBER OF UNITS DELIVERED IN 2017

Deliveries on a good level in 2017

The demand for flexible temporary space solutions grew during the year, and the large number of deliveries was driven especially by the good economy, an increase in housing renovation, the urbanisation trend under way and demographic changes that have led to an increased need for daycare, school and office facilities in our main markets, among other things. However, we still see a lot more development potential in our division and have taken major steps to ensure long-term competitiveness, growth and profitability. These actions are aimed at strengthening our customer orientation, for example, through deeper understanding of customer needs and more focused and intensified sales activities. 

Our objective is to keep our position as the number one modular space company in the Nordic countries and become a leading player in Central Europe. During the year, we strengthened our position in the Nordic market by acquiring the assets of Just Pavillon A/S in Denmark. The acquisition complements our modular space fleet well, with its high-quality, flexible solutions. 

In Central Europe, the large German market is important to us, and we have invested in several development actions to capture the opportunities for profitable growth. Building and shaping a strong, scalable organisation, investing in efficient logistics and an effective hub network, and creating a strong solution offering are some examples of the actions we took during the year.

We put extra effort into understanding and analysing the real needs of our current and potential customers and the end users of modular solutions.

Deeper understanding of customer needs

To further execute the Shape and Share strategy throughout the division, we have aligned our processes, secured the right competences and resources, and strengthened our performance and innovation culture. Additionally, in order to drive the sharing economy in our field, we are continuously seeking new business models enabled, for instance, by digitalisation or new kinds of partnerships.

During the year, we also put extra effort into understanding and analysing the real needs of our current and potential customers and the end users of modular solutions. Deeper insight into customer needs related to quality, functionality, services, energy efficiency and the indoor climate, for example, will enable us to develop the most value-adding, sustainable and competitive solutions. 

Sustainability is very important to us, and we continuously enhance our solutions and processes in that respect. We work proactively to comply with the latest environmental regulations and to drive development beyond that. By doing so, we also help our customers achieve their sustainability targets. Our energy-efficient solutions are designed for demanding Nordic weather conditions. We have chosen to use wood as the main material in most of our high-quality modules, and we continuously seek new ways to enhance our resource efficiency throughout the value chain. Our operations are certified to ISO 9001, ISO 14 001 and OHSAS 18001 standards in Finland, to ISO 9001, ISO 14 001 and SCC/SCP standards in Germany, and to ISO 9001 and ISO 14 001 standards in Sweden and Norway.

A number of drivers affect demand

Over the long term, the demand for rental services is supported by numerous megatrends which, along with the demographic changes and urbanisation mentioned above, include the global economy, migration, sustainable development, digitalisation and the rise of the sharing economy. These, in turn, are transformed into growth drivers of the modular space business, such as fluctuating space needs for different functions in a community – including daycare, schools, elderly care and student accommodation – as well as a growing need for office space as a result of increased economic activity. Furthermore, unstable public finances, which slow down the willingness to invest in building new facilities, together with a growing understanding of the cost-effectiveness of temporary solutions, enhance the attractiveness of modular space solutions for public facilities.

Long-term targets 2017-2020 and outcome 2017

Organic rental sales growth1

Double digit

Target

9.3%

Outcome

Comparable ROCE2

>12.5%

Target

9.1%

Outcome

1 Organic rental sales growth excludes the impact of acquisitions, divestments and exchange rates
2 ROCE = EBIT (rolling 12 months) / capital employed (average start and end of the period)

Case

Functionality meets design in Norway

Western Lofoten High School in Leknes, in the middle of Norway's Lofoten Islands, was to be refurbished. Temporary school facilities were needed to keep the school running for its students and teachers. Cramo Adapteo had the solution.

The municipality chose Cramo Adapteo’s top-of-the-line modules, designed to meet the high demands of schools and other facilities. In fact, they meet the same standards as permanent buildings. The modules, with superior energy efficiency and stability to cope with extreme conditions, are fit for purpose even beyond the Arctic Circle in Leknes. 

“The sharing of ideas and experiences at Cramo was important in the delivery phase since the modules needed to comply with stringent Norwegian regulations for fire safety and ventilation. This was ensured with the support of other Cramo teams, and the solution will be included in our standards in the future,” explains Erik Chapman, Country Manager for Cramo Adapteo Norway.

The modules, totalling 74 units in three different sizes, are rented out for a period of 42 months. They are spread over two and three storeys and provide pleasant, functional school premises covering 2,658 m2. Students at what is the northernmost modular school ever are expected to move back into their refurbished premises at the end of 2020. 

“The modular school has exceeded our expectations. All 300 students and their teachers are very happy in their permanent-like temporary school. Cramo Adapteo has clearly proved to be the best option in selecting temporary school facilities,” says Arne Lund, Operations Manager of Western Lofoten High School.

Photo: Tommy Andreassen, PhotoView