Businesses

Capturing opportunities in the market

Cramo is focusing on further strengthening its leading position as a European equipment rental player and reaching the number one or two position in each local market of relevance. In several markets Cramo already is a strong player and sees potential for further uplift. Diversified end-market exposure drives balance between growth and stability.

Our strategy aims at capturing opportunities in the market via differentiation through products, services and innovative digital solutions designed to increase productivity for our customers. In Sweden, Norway and Finland we see growth opportunities in both the industrial segment and through digital offerings as well as in the high demand for rental-related services. In our markets in Germany, Czech Republic, Estonia, Lithuania, Poland, Austria, Hungary and Slovakia, the growth opportunities are rooted in increasing rental penetration, outsourcing deals and in the possibility to proactively build on the demand for rental-related services. In all markets we are also looking to grow both organically and inorganically.

Market outlook

The estimated size of the rental market in the countries where Cramo operates totalled about EUR 10 billion in 2019.

In 2019, the market growth levelled out in many countries. Our sales decreased largely due to overall weaker market conditions in Sweden, but was also affected by the ending of two large industrial projects. New projects were commenced only in late 2019 and will have positive sales impact in 2020.

For 2020, the European Rental Association (ERA) estimates that growth in the equipment rental industry will be between 4-5% in all of Cramo’s operating countries, except in the Czech Republic and Polish market, where growth is forecasted to be 6% and above 8%, respectively.¹

In equipment rental, ERA sees two trends that are pushing rental penetration. One is the better understanding rental customers have regarding the advantages of renting out a piece of equipment, such as savings, modern equipment, more flexibility and less capital expenditure. Secondly, the rental market is consolidating, which plays a major role in the rental industry’s efficiency and promotion.

1 ERA Equipment Rental Industry 2019 Market Report

Market overview and our position
  ERA Forecon  
  Market size 2019 (ERA), MEUR Market CAGR 19-21 Market size 2019 (Forecon), MEUR Market growth 2020, % Market position estimate
Scandinavia 2,500 3.9% 2,800 2.2%  
Sweden 1,600 3.6% 1,800 0.0% #2
Norway 900 4.5% 1,000 6.0% #3
Finland and Eastern Europe 1,500 5.8% 1,700 6.4%  
Finland 600 4.5% 800 5.0% #2
Eastern Europe1 900 6.6% 900 7.5% #1, #44
Central Europe 5,600 4.1% 5,600 4.3%  
Germany 4,900 4.0% 4,900 4.0% #4
Other Central Europe2 700 4.7% 700 4.8% #23
Total market 9,600 4.3% 10,100 4.0%  

 

Forecon data for Poland and Central European countries based on ERA outlook for 2019 and 2020

1 Estonia, Lithuania and Poland
2 Austria, Czech Republic and Slovakia
3 #2 in Austria and one of the leading equipment rental companies in Czech Republic and Slovakia
4 #1 in the Baltics and #4 in Poland

Sources: ERA market report and Forecon

Market with long term structural growth and robust mid-term outlook

Equipment rental outgrowing the construction market

Equipment rental

Source: ERA Market Reports, Forecon, EIU, Euroconstruct, World Bank

1 In Cramo’s geographic markets. Data for Sweden, Finland and Norway are based on average between ERA and Forecon (starting 2013/2014 depending on data availability). No historical data available for Austria and Czech Republic beyond 2013; 2013 figures applied as base numbers for years before

A diversified end-market exposure drives balance between growth and stability
  Mature markets Developing markets
End-markets

Flags1 2x 3

Flags2 2x 3

Share of sales (2019) ~70% ~30%
Construction rental penetration High Low
Growth and volatility
  • Robust mid-term growth outlook
  • Less amplitude in cycles
  • Mid to high single-digit growth outlook
  • Higher amplitude in cycles
Growth opportunities
  • Industrial and digital offering enabling growth
  • High demand for rental-related services
  • Organic and non-organic growth opportunities
  • Large outsourcing deals
  • Medium demand for rental-related services
  • Organic and non-organic growth opportunities