Strategy

Cramo NXT – a strategy for growth and differentiation

We created a new vision and strategy to better serve our growth and other strategic ambitions as a focused equipment rental company. We aim to capture the opportunities in the market through differentiation with a comprehensive offering that enables improved productivity for our customers. A deep understanding of our customers’ key concerns is central for our success.

From the perspective of a fully focused equipment rental company, we thoroughly analysed our operating environment and the key concerns of customers in order to create a new vision and strategy for Cramo.

The analysis showed that enhanced performance and differentiation will be the most critical success factors for a rental industry company in the future. We also identified significant opportunities to increase our core business, equipment rental, through, for example, intensified initiatives towards the industrial segment. The most important finding in discussions with our key customers was that their ultimate concerns are strongly related to the productivity of construction projects – concerns that we are able to address through our services and digital initiatives.

Based on these key findings and a deep understanding of the different markets where we operate, we defined and started implementing our new vision and a strategy that we believe best supports our growth and future success as a top-tier company in our field of business.  

Our new vision is Your productivity partner in rental and beyond. We aim to achieve our vision by providing our customers with value-adding services that also differentiate us from the competition.

Our new Cramo NXT strategy focuses on growth, further enhancing operational efficiency, strengthening our market position in the industrial segment, increasing our service offering and developing innovative digital solutions to improve customer efficiency. We have also defined four key enablers that will support us in realising our strategic objectives. Our values – credibility, creativity and commitment – remain unchanged.

 

A video from Capital Markets Day in September 2019 summarising Cramo’s vision, Cramo NXT strategy and financial targets.

Top-tier performance across group

  • to improve our operational efficiency and further strengthen Cramo's position as a leading European equipment rental player

Target:
#1-2 position in each local market of relevance

Read more

Stronghold in the industrial segment

  • to expand the business and to balance the cyclicality of construction business

Target:
30% of revenues from industrial segments

Read more

Leading partner for services

  • to provide a differentiating service offering promoting long-term customer partnerships that enable value-added benefits for customers while supporting equipment rental

Target:
30% of revenue from services

Read more

Digital leader in the rental industry

  • to increase productivity for our customers through digital initiatives that enable superior customer experience and productivity

Target:
100% of construction and access equipment fleet connected

Read more

New financial targets focusing on growth and operational efficiency

We have four new financial targets based on the Cramo NXT strategy for the 2019–2023 strategy period. These targets cover growth, capital efficiency, leverage and shareholder return, offering a good balance between growth and operational efficiency.

Financial targets 2019–2023

  • Double-digit EPS growth between 2019 and 2023¹
  • Operative ROCE² >15% by year-end 2023
  • Net debt to EBITDA lower than 3.0x
  • Dividend pay-out ratio >50% of EPS³

1 CAGR. Comparable EPS
2 Excluding goodwill and intangible assets. Operative ROCE defined as comparable EBITA to average of tangible assets and net working capital
3 Excess capital can be distributed through dividends or share repurchases

Comprehensive approach to sustainability

Sustainability is embedded in our strategy, and we have assured our industry position as a frontrunner in this field. During the year, we updated our sustainability strategy, in line with our new Cramo NXT business strategy. In the coming years we will increase our focus on sustainable customer use, transports and logistics as well as sustainable sourcing. Our aim is to have the most satisfied customers in the industry and to work together with our customers, suppliers and other stakeholders to further decrease the environmental and social footprint of rental equipment.

We will also continue to improve our internal operations, integrating sustainability into all parts of our organisation. Our focus on business ethics, occupational health and safety, mitigating our environmental impact and taking an active role in the communities we operate in will remain strong.

Cramo NXT enables us to take the lead in advancing sustainability in the rental industry and to move towards circularity.

Non-financial strategic targets

Customer Care

Strategic target: Most satisfied customers in the industry
Target: Customer satisfaction index >75
Target: Share of units powered by electricity within the energy powered fleet 90% by 2023

Employee Care

Strategic target: Zero accidents
Target: LTIR¹ 0 by 2023

Environmental Care

Strategic target: Zero emissions
Target: Emissions² (t/MEUR revenue) <15 t/MEUR by 2023

Social Care

Strategic target: Top ranking in business ethics
Target: 0 legal proceedings

1 Number of work-related accidents with at least one full-day absence/million working hours
2 CO2e emissions, scope 1 and 2 (relative to sales). A market-based method is used to calculate the CO2e emissions from electricity