DGAP-News: Cramo–s Interim Report 1 January-30 June 2011

Cramo Oyj

04.08.2011 08:01
—————————————————————————

Strong sales growth, better profitability, increasing market uncertainty

Vantaa, Finland, 2011-08-04 08:00 CEST (GLOBE NEWSWIRE) — Cramo Plc Interim
Report 4 August 2011, at 9.00 am Finnish time (GMT+2)

CRAMO–S INTERIM REPORT 1 JANUARY-30 JUNE 2011

STRONG SALES GROWTH, BETTER PROFITABILITY, INCREASING MARKET UNCERTAINTY

Q2/2011 highlights:

— Sales EUR 161.1 (114.0) million, up 41.4%
— EBITA EUR 14.3 (3.8) million and EBITA margin 8.9% (3.3%)
— Earnings per share EUR 0.09 (-0.15)
— Rights offering in April, EUR 97.4 million raised in new equity after
expenses
— Acquisition of Tidermans in Sweden and Stavdal in Norway in June

H1/2011 highlights:

— Sales EUR 305.4 (215.4) million, up 41.8% of which organic growth 27.6%
— EBITA EUR 16.8 (5.3) million and EBITA margin 5.5% (2.4%)
— Earnings per share EUR -0.07 (-0.37)
— Cash flow after investments EUR -98.3 (18.1) million
— Gearing 91.8% (111.7%)

New guidance:

— In spite of the increased market uncertainty, the Group–s sales in 2011 are
expected to grow both organically and as a consequence of acquisitions. The
Group–s EBITA margin will improve compared with 2010.

KEY FIGURES AND RATIOS (EUR 1,000) 4-6/11 4-6/10 1-6/11 1-6/10 1-12/10
——————————————————————————–
Income statement
——————————————————————————–
Sales 161,135 113,964 305,352 215,363 492,103
——————————————————————————–
EBITDA 38,186 24,840 63,532 47,427 117,623
——————————————————————————–
Operating profit (EBITA) before 14,334 3,766 16,789 5,269 34,478
amortisation and impairment of
intangible assets resulting from
acquisitions
——————————————————————————–
Operating profit / loss (EBIT) 11,733 2,077 11,496 1,963 27,389
——————————————————————————–
Profit / loss before tax (EBT) 5,849 -4,176 1,887 -10,750 4,804
——————————————————————————–
Profit / loss for the period 3,422 -4,953 -2,541 -12,353 -2,203
——————————————————————————–
Share related information
——————————————————————————–
Earnings per share (EPS), EUR 2) 0.09 -0.15 -0.07 -0.37 -0.06
——————————————————————————–
Earnings per share (EPS), diluted, 0.08 -0.14 -0.07 -0.36 -0.06
EUR 2)
——————————————————————————–
Shareholders– equity per share, EUR 10.17 9.62 10.52
——————————————————————————–
Other information
——————————————————————————–
Return on investment, % 1) 4.6 % -1.3 % 3.7 %
——————————————————————————–
Return on equity, % 1) 1.9 % -11.8 % -0.6 %
——————————————————————————–
Equity ratio, % 41.7 % 38.0 % 38.7 %
——————————————————————————–
Gearing, % 91.8 % 111.7 % 103.4 %
——————————————————————————–
Net interest-bearing liabilities 429,631 382,188 382,032
——————————————————————————–
Gross capital expenditure (incl. 188,412 20,172 86,219
acquisitions)
——————————————————————————–
of which related to acq. and 117,240 4,128 33,821
business combin.
——————————————————————————–
Cash flow after investments -98,325 18,092 27,393
——————————————————————————–
Average number of personnel (FTE) 2,465 2,033 2,083
——————————————————————————–
Number of personnel at end of 2,686 2,084 2,131
period (FTE)
——————————————————————————–
1) Rolling 12 month
——————————————————————————–
2) Due to the rights issue completed in April 2011, the earnings per share (EPS)
figures for the previous periods have been adjusted by multiplying the number
of shares used in the calculations by the following adjustment factor: fair
value per share before exercise of rights divided by the theoretical ex-rights
value per share
——————————————————————————–
–

SUMMARY OF FINANCIAL PERFORMANCE IN JANUARY-JUNE 2011

Cramo Group–s consolidated sales continued to grow strongly. Sales grew by 41.8
per cent in January-June to EUR 305.4 (215.4) million. In local currencies,
sales growth was 35.7 per cent. Organic growth was 27.6 per cent. Growth was
achieved in all markets. Sales grew by 41.4 per cent in April-June to EUR 161.1
(114.0) million. In local currencies, sales increased by 46.4 per cent in the
second quarter.

Profitability continued to improve in the second quarter as expected. EBITA for
January-June improved on the previous year to EUR 16.8 (5.3) million,
representing 5.5 (2.4) per cent of sales. EBITDA was EUR 63.5 (47.4) million,
or 20.8 (22.0) per cent of sales. EBITA for April-June was EUR 14.3 (3.8)
million, or 8.9 (3.3) per cent of sales.

EBITA excluding non-recurring items was EUR 18.8 (-0.5) million, or 6.2 (-0.2)
per cent of sales. EBITDA excluding non-recurring items was EUR 65.6 (41.7)
million, or 21.5 (19.4) per cent of sales. In the first quarter of 2011,
non-recurring items include expenses of EUR 2.1 million relating to the
acquisition of Theisen Group, while non-recurring items in the first quarter of
2010 included a net capital gain of EUR 5.7 million.

Profitability improved in all business segments except Norway. In Finlandand
Sweden, the result was good, and Central Europe (Theisen Group) saw an upturn,
swinging into profit during the period. In Norway, demand for rental services
increased more slowly than expected, in addition to which unprofitable projects
were recognised in the second quarter. However, the performance of the
Norwegian operations improved towards the end of the period. In Denmark and
Eastern Europe the result was negative but showed a clear improvement compared
to the previous year.

The Group–s cash flow after investments was EUR -98.3 (18.1) million. Gross
capital expenditure was EUR 188.4 (20.2) million, of which acquisitions
accounted for EUR 117.2 (2.6) million. In the second quarter, Cramo acquired
100 per cent of the shares in Tidermans, a Swedish rental operator in the
Gothenburg region, and Stavdal, a Norwegian rental company operating in the
Oslo region. In the first quarter, Cramo acquired the rental operator Theisen
Group, having operations in Germany, Austria, Switzerland and Hungary. All
acquisitions are of strategic importance to Cramo.

At the end of the period, the Group–s gearing was 91.8 (111.7) per cent. In
April, Cramo carried out a rights offering, which yielded EUR 97.4 million in
new equity after expenses.

POSITIVE MARKET OUTLOOK FOR 2011, OVERSHADOWED BY RECENT RAPIDLY INCREASING
UNCERTAINTY

The construction and equipment rental service markets are expected to grow
stronger in almost all of Cramo–s market areas in 2011. According to the
forecast published by the construction market research organisation
Euroconstruct in June, construction activity will grow by some 4-6 per cent
throughout the Nordic region. In Lithuania and Russia, market growth is
predicted at 5-7 per cent and in Germany, at just under two per cent. Growth
rates in the double figures are forecasted for Poland and Estonia. In Latvia,
the market will remain unchanged. In Hungary, the Czech Republic and Slovakia,
construction is expected to decline.

However, most recent economic development indicates increased uncertainty, and
therefore the forecasts above have to be interpreted with considerable caution.

Cramo–s experience shows that changes in the equipment rental market follow
changes in construction activity with some delay. Cramo anticipates stronger
growth in the demand for rental services compared to that in construction.
Increased interest in equipment rental as an alternative to owning will
contribute to the growth of the rental market. Recent history shows that
arrangements where companies outsource their equipment fleet to a rental
service company are becoming increasingly attractive.

The recent debt crisis in certain eurozone countries has increased the
uncertainty of near-term future economic development in Europe. This has also
increased the risk levels associated with Cramo–s business operations.

GUIDANCE ON GROUP OUTLOOK

The Group has modified its guidance. The new guidance is: –In spite of the
increased market uncertainty, the Group–s sales in 2011 are expected to grow
both organically and as a consequence of acquisitions. The Group–s EBITA margin
will improve compared with 2010.–

The old guidance was: –The market outlook for equipment rental services for
2011 is positive. In 2011, the Group–s sales is expected to grow both as a
consequence of the Theisen acquisition and organically. The Group–s EBITA
margin will improve compared with 2010.–

CEO–S COMMENT

–The second quarter of 2011 developed in line with our expectations. The demand
for rental services and the price levels continued to develop favourably.

Construction activity continued to increase and profitability improved in
Finland and Sweden, our largest market areas. New housing starts are at a good
level in Finland and in Sweden, and the outlook for office and commercial
construction is improving.

I am particularly pleased with the improved performance of our Central European
business segment, which was formed in connection with the acquisition of
Theisen Group. In Germany and Austria, business developed according to our
expectations. It seems that the acquisition occurred at the right time.

Cramo–s Danish and Eastern European operations continued to improve their
performance, and our objective is to achieve a positive result in the second
half of the year. I also expect to see the Norwegian operations to turn back
into profit.

The rights offering carried out in April attracted interest from a wide range
of investors. A stronger balance sheet provides us with a solid foundation for
successful trading also in a less favourable business environment. The debt
crisis in certain EU countries and the increased risk level will be taken into
account in our business planning,– says Vesa Koivula, President and CEO of
Cramo Group.

SALES AND PROFIT

Cramo is a service company specialising in equipment rental services, as well
as the rental and sale of modular space. Its equipment rental services comprise
construction machinery and equipment rentals and rental-related services. These
rental-related services include construction site and installation services. As
one of the industry–s leading service providers in the Nordic countries and
Central and Eastern Europe, at the end of the financial year, Cramo Plc
operated in Finland, Sweden, Norway, Denmark, Estonia, Latvia, Lithuania,
Poland, the Czech Republic, Slovakia, Russia, Germany, Austria, Switzerland and
Hungary.

Cramo Group–s consolidated sales were EUR 305.4 (215.4) million in the period 1
January-30 June 2011, showing an increase of 41.8 per cent. In local
currencies, sales growth was 35.7 per cent. Sales increased in all business
segments. Growth was particularly strong in Finland, Sweden and Eastern Europe.
Operations in Central Europe, which comprise Theisen Group, have been reported
as a new business segment since 1 February 2011.

Sales grew by 41.4 per cent in April-June to EUR 161.1 (114.0) million. In
local currencies, sales increased by 46.4 per cent in the second quarter.

Profitability continued to improve in the second quarter as expected. EBITA for
January-June improved from the previous year, amounting to EUR 16.8 (5.3)
million and representing 5.5 (2.4) per cent of sales. EBITDA was EUR 63.5
(47.4) million, or 20.8 (22.0) per cent of sales. EBITA for April-June was EUR
14.3 (3.8) million, or 8.9 (3.3) per cent of sales.

EBITA excluding non-recurring items was EUR 18.8 (-0.5) million, or 6.2 (-0.2)
per cent of sales. In the first quarter of 2011, non-recurring items included
expenses of EUR 2.1 million relating to the acquisition of Theisen Group, while
non-recurring items in the first quarter of 2010 included a net capital gain of
EUR 5.7 million.

Profitability improved in all business segments except Norway. In Finland and
Sweden, the result was good, and Central Europe saw a clear upturn, swinging
into profit during the period. In Norway, the demand for rental services
increased more slowly than expected, in addition to which unprofitable projects
were recognised in the second quarter. However, the performance of the
Norwegian operations improved towards the end of the period. In Denmark and
Eastern Europe the result was negative but showed a clear improvement on the
previous year.

The Group–s credit losses and credit loss provisions in January-June were EUR
1.9 (2.8) million. The result also includes impairment losses on the fleet
totalling EUR 0.2 (1.0) million.

Expenses associated with options totalled EUR 1.4 (1.2) million.

Consolidated operating profit (EBIT) was EUR 11.5 (2.0) million, or 3.8 (0.9)
per cent of sales. Profit before taxes was EUR 1.9 (-10.8) million and profit
for the period EUR -2.5 (-12.4) million. Net finance costs were EUR -9.6
(-12.7) million.

In accordance with the prudence principle, Cramo did not recognise a deferred
tax asset for most of its loss-making companies in the first half of 2011.

Earnings per share were EUR -0.07 (-0.37). Diluted earnings per share were EUR
-0.07 (-0.36). Second-quarter earnings per share were EUR 0.09 (-0.15).

Return on investment (rolling 12 months) was 4.6 (-1.3) per cent and return on
equity (rolling 12 months) 1.9 (-11.8) per cent.

CAPITAL EXPENDITURE AND DEPRECIATION/AMORTISATION

Gross capital expenditure for the period was EUR 188.4 (20.2) million, of which
EUR 117.2 (4.1) million relates to acquisitions and business combinations.
Company and business acquisitions consist of the acquisition of Theisen Group
as well as of Tidermans and Stavdal.

Reported depreciation and impairment on property, plant and equipment and
software were EUR 46.7 (42.2) million.

Depreciation and amortisation on intangible assets resulting from acquisitions
were EUR 5.3 (3.3) million. At the end of the period, goodwill totalled EUR
171.4 (143.4) million.

FINANCIAL POSITION AND BALANCE SHEET

The Group showed a positive net cash flow of EUR 32.4 (11.2) million from
operating activities in January-June. Cash flow from investing activities was
EUR -130.7 (6.9) million and cash flow from financing activities was EUR 93.2
(-25.1) million.

The Group–s cash flow after investments was EUR -98.3 (18.1) million.

At the end of the period, the Group–s balance sheet included EUR 6.3 (2.8)
million of assets available for sale.

After consolidating the Theisen Group the Group has recognised a pension
liability from Germany (EUR 1.5 million on 30 June 2011) which is presented in
provisions in the balance sheet.

At the end of the period, Cramo Group–s gross interest-bearing liabilities
totalled EUR 446.7 (394.1) million.

Of the variable-rate loans, EUR 181.6 (148.0) million were hedged by way of
interest rate swaps on 30 June 2011. Hedge accounting is applied to EUR 145.2
(101.7) million of these interest rate hedges. On 30 June 2011, Cramo Group had
undrawn committed credit facilities (excluding leasing facilities) of EUR 124.7
(123.8) million, of which non-current facilities represented EUR 104.0 (95.0)
million and current facilities EUR 20.7 (28.8) million.

On 30 June 2011, Cramo Group–s net interest-bearing liabilities totalled EUR
429.6 (382.2) million. Gearing increased in the first quarter, particularly as
a result of the Theisen acquisition, but then decreased due to the rights
offering carried out in the second quarter.

At the end of the period, gearing was 91.8 (111.7) per cent.

Property, plant and equipment amounted to EUR 603.7 (508.2) million of the
balance sheet total. The balance sheet total on 30 June 2011 was EUR 1,133.3
(906.6) million and the equity ratio was 41.7 (38.0) per cent.

Rental liabilities associated with off-balance sheet operational leasing
agreements totalled EUR 53.3 (36.5) million on 30 June 2011. Off-balance sheet
liabilities for office and depot rents totalled EUR 111.7 (83.4) million. At
the end of the period, the hybrid bond-related off-balance sheet interest
liability was EUR 1.0 (1.0) million.

GROUP STRUCTURE

At the end of the period under review, Cramo Group consisted of the parent
company Cramo Plc, which provides group-level services, and as operating
companies, its wholly-owned subsidiaries in Finland, Sweden, Norway, Denmark,
Estonia, Latvia, Lithuania, Poland, the Czech Republic, Slovakia, Russia,
Germany, Austria, Switzerland and Hungary. Cramo Plc also owns a financing
company in Belgium, a company in Sweden which offers group-level services and
Cramo Management Oy, which owns 316,288 Cramo Plc shares.

At the end of the period under review, equipment rental services were provided
through a network of 398 (283) depots, of which 75 (76) were
entrepreneur-managed.

BUSINESS DEVELOPMENT AND STRATEGIC TARGETS

In January, Cramo acquired 100 per cent of the share capital of the German
rental group Theisen Baumaschinen AG, and Theisen Group was consolidated into
Cramo Group on 1 February 2011.

Some 90 per cent of Theisen Group–s sales are generated in Germany. The Group
also has operations in Austria, Switzerland and Hungary. The integration of
Theisen into Cramo Group has progressed as planned. Cramo expects the
acquisition to be earnings-neutral for Cramo Group in 2011 and
earnings-accretive thereafter.

In June, Cramo reinforced its regional market position with the acquisition of
100 per cent of the shares in Tidermans, a Swedish rental operator in the
Gothenburg region, and Stavdal, a Norwegian rental company operating in the
Oslo region. Both companies are consolidated into the Group as of 30 June,
2011.

Equipment rental is characterised by seasonal fluctuations. In line with the
construction industry–s seasonal fluctuations, the first quarter is usually the
weakest quarter, both in terms of sales and profitability. The third quarter of
the year is usually the best. In Cramo–s operations, the modular space product
group and, to a certain extent, construction site services such as heating and
drying help moderate the effects of seasonal variations.

Cramo–s strategic targets for 2010-2013 are to be the customers– first choice
as well as the –best in town– in the rental business. Other strategic targets
are to grow profitably faster than the market and to act as a driver of rental
development.

Cramo Group–s financial targets for 2010-2013 are as follows: sales growth
above 10 per cent per annum, EBITA margin above 15 per cent of sales, return on
equity (ROE) above 15 per cent and maximum gearing at 100 per cent.

HUMAN RESOURCES

During the period under review, Group staff averaged 2,465 (2,033). In
addition, the Group employed some 128 (62) persons as temporary staff. At the
end of the period, Group staff numbered 2,686 (2,084). Group staff at the end
of the period includes the personnel of Tidermans (63 employees) and Stavdal
(25 employees).

The geographical distribution of personnel at the end of the period was as
follows: Finland, 704 (577) employees; Sweden, 797 (705); Norway, 218 (180);
Denmark, 123 (115); Central Europe, 279; and Eastern Europe, 565 (506).

CHANGES IN MANAGEMENT

Mr Dirk Schlitzkus (47), Attorney, was appointed Senior Vice President, Central
Europe, and member of the Cramo Group management team on 9 May 2011. At the
same time he also assumed the position of Managing Director of Theisen
Baumaschinen AG. Mr Schlitzkus reports to Mr Vesa Koivula, President and CEO of
Cramo Group. Mr Schlitzkus joined Theisen in 1994 as a consultant lawyer and
has held several executive positions in the company since 1998.

PERFORMANCE BY BUSINESS SEGMENT

Cramo Group–s business segments consist of Finland, Sweden, Norway, Denmark,
Central Europe, which includes Germany, Switzerland, Austria and Hungary, and
Eastern Europe, which includes Estonia, Latvia, Lithuania, Poland, the Czech
Republic, Slovakia and Russia. In addition to segment information, Cramo also
reports on the order book value for modular space.

Finland generated 19.2 (19.1) per cent of the total consolidated sales for
January-June 2011, Sweden 45.3 (51.4) per cent, Norway 12.1 (14.8) per cent,
Denmark 4.5 (5.7) per cent, Central Europe 9.9 per cent and Eastern Europe 9.0
(9.0) per cent. The Central European business segment consisting of Theisen
Group became part of Cramo Group on 1 February 2011.

Finland

Finland(EUR 1,000) 4-6/11 4-6/10 Change % 1-6/11 1-6/10 Change 1-12/10
%
——————————————————————————–
Sales 31,271 22,694 37.8 % 59,461 41,751 42.4 % 99,583
——————————————————————————–
EBITA 4,248 2,546 66.9 % 6,424 3,096 107.5 % 12,466
——————————————————————————–
EBITA-% 13.6 % 11.2 % 10.8 % 7.4 % 12.5 %
——————————————————————————–
No of employees 682 557 22.4 % 570
(FTE)
——————————————————————————–
No of depots 55 57 -3.5 % 58
——————————————————————————–

The growth in construction which started in the second half in 2010 continued.

The Finnish operations reported sales of EUR 59.5 (41.8) million for
January-June, for an increase of 42.4 per cent. EBITA totalled EUR 6.4 (3.1)
million, or 10.8 (7.4) per cent of sales.

Sales for April-June were EUR 31.3 (22.7) million, up 37.8 per cent. EBITA for
April-June was EUR 4.2 (2.5) million, or 13.6 (11.2) per cent of sales.

Sales increased as a result of the strong recovery in the markets, particularly
in the residential construction segment, and the significant outsourcing
agreements signed at the end of 2010. In industrial construction, demand is the
highest in the energy and mining sectors. Demand for modular space remains
steady.

Fleet utilisation rates were at a good level, and Cramo increased its fleet
investments. The Group–s new reporting system was introduced during the review
period for the purpose of steering depot operations.

According to the estimate published by Euroconstruct in June, construction will
increase in Finland by four per cent in 2011. Both residential construction and
commercial and office construction will increase markedly, while civil
engineering will decrease as the government reduces its measures to stimulate
economic recovery. According to the forecast published by the Confederation of
Finnish Construction Industries RT in April 2011, construction activity will
increase by five per cent in Finland in 2011.

Cramo is the second largest player in the equipment rental market in Finland.
The number of depots at the end of the period under review was 55 (57). Cramo–s
strategic target in Finland is to increase its market share, both in the
construction industry and in the industrial maintenance sector, and to restore
profitability to the pre-downturn level.

Sweden

Sweden(EUR 1,000) 4-6/11 4-6/10 Change % 1-6/11 1-6/10 Change % 1-12/10
——————————————————————————–
Sales 72,488 60,602 19.6 % 140,589 112,498 25.0 % 251,857
——————————————————————————–
EBITA 13,566 8,835 53.5 % 22,911 14,254 60.7 % 41,186
——————————————————————————–
EBITA-% 18.7 % 14.6 % 16.3 % 12.7 % 16.4 %
——————————————————————————–
No of employees 757 668 13.3 % 665
(FTE)
——————————————————————————–
No of depots 124 116 6.9 % 119
——————————————————————————–

The demand for construction and equipment rental services in Sweden continued
to develop favourably. Growth continued to be particularly strong in the
Stockholm region and in southern Sweden. Demand is expected to remain strong
throughout the country.

The Swedish operations reported sales of EUR 140.6 (112.5) million for
January-June, for an increase of 25.0 per cent. In the local currency, sales
growth was 14.1 per cent. The growth in sales was boosted by a strong increase
in construction activity and by industrial investments. Sales for April-June
were EUR 72.5 (60.6) million, up 19.6 per cent. In the local currency, the
second-quarter growth in sales was 11.6 per cent.

Profitability continued to develop favourably. EBITA for January-June was EUR
22.9 (14.3) million, representing 16.3 (12.7) per cent of sales. EBITA for
April-June amounted to EUR 13.6 (8.8) million, representing 18.7 (14.6) per
cent of sales. Fleet utilisation rates were at a good level and Cramo continued
its fleet investments.

In June, Cramo announced it had acquired all the shares in Tidermans
Hyrmaskiner AB and Tidermans Hyrmec AB (–Tidermans–). In 2010, the combined
sales of the companies were approximately EUR 14.2 million, and they have a
total of 63 employees. Tidermans is the leading rental operator in western
Sweden with four depots in Gothenburg, Sweden–s second largest city, and one
depot in Falkenberg. Over the six-plus decades it has functioned as a rental
services operator, Tidermans has achieved a strong market position among
construction sector companies in western Sweden. As a consequence of the
acquisition Cramo becomes a clear market leader in the rental business in the
Göteborg region.

The full-year forecast, published by Euroconstruct in June, for construction
growth in Sweden is five per cent. The Swedish Construction Federation
(Sveriges Byggindustrier) changed its forecast for construction growth from
seven to eight per cent in June. In residential construction, the predicted
rate of growth is up to 14 per cent. Commercial and office construction are
also expected to grow strongly.

Cramo is the clear market leader in the Swedish equipment rental business. At
the end of the period, Cramo had 124 (116) depots in Sweden. Cramo–s strategic
targets in Sweden for 2010-2013 are efficiency and profitability improvement in
particular, as well as achieving the –best in town– position in all areas.

Norway

Norway(EUR 1,000) 4-6/11 4-6/10 Change % 1-6/11 1-6/10 Change % 1-12/10
——————————————————————————–
Sales 17,378 15,332 13.3 % 37,582 32,429 15.9 % 69,120
——————————————————————————–
EBITA -1,150 -303 -279.6 % -735 -406 -81.1 % 303
——————————————————————————–
EBITA-% -6.6 % -2.0 % -2.0 % -1.3 % 0.4 %
——————————————————————————–
No of employees 218 180 21.1 % 189
(FTE)
——————————————————————————–
No of depots 34 28 21.4 % 29
——————————————————————————–

The rate of recovery in the construction sector in Norway has been below
industry expectations; however, an upswing in construction activity is expected
in 2011.

The Norwegian operations reported sales of EUR 37.6 (32.4) million for
January-June, for an increase of 15.9 per cent. In the local currency, the
change in sales was 13.3 per cent. Sales in the second quarter amounted to EUR
17.4 (15.3) million, showing an increase of 13.3 per cent. In the local
currency, the second-quarter growth in sales was 12.3 per cent.

EBITA for January-June amounted to EUR -0.7 (-0.4) million, representing -2.0
(-1.3) per cent of sales. EBITA for the second quarter amounted to EUR -1.2
(-0.3) million, representing -6.6 (-2.0) per cent of sales. Unprofitable
projects were recognised in the second quarter. Measures aimed at improving the
profitability of the Norwegian operations continued, which included the
reorganisation of operations. While the second-quarter result was a
disappointment for Cramo, the result of the Norwegian operations improved by
the end of the period.

In June, Cramo announced the acquisition of all the shares in Stavdal
Utleiesenter AS. The company has a head office in Oslo and a total of 25
employees. In 2010, Stavdal–s sales were approximately EUR 7.3 million, with
growth expected in 2011. The acquisition is in line with Cramo–s strategy to be
best in town in selected areas. Stavdal–s business concept fits well into
Cramo–s existing business and depot network in Norway, and through the
acquisition Cramo strengthens its position among small and medium-sized
construction operators.

According to the estimate published by Euroconstruct in June, construction will
increase in Norway by almost six per cent in 2011. The strongest rates of
growth are predicted for residential construction. Civil engineering activity
is also expected to increase markedly, while commercial and office construction
will decrease further.

Cramo estimates that in terms of market position, it is the second largest
service provider in the sector in Norway. At the end of the period under
review, Cramo had 34 (28) depots in Norway. Cramo–s strategic targets in Norway
are to improve its profitability, be the –best in town– and achieve growth both
organically and through acquisitions.

Denmark

Denmark(EUR 1,000) 4-6/11 4-6/10 Change 1-6/11 1-6/10 Change 1-12/10
% %
——————————————————————————–
Sales 7,750 6,728 15.2 % 14,007 12,468 12.3 % 29,493
——————————————————————————–
EBITA -646 -1,268 49.0 % -2,281 -4,491 49.2 % -5,328
——————————————————————————–
EBITA-% -8.3 % -18.8 % -16.3 % -36.0 % -18.1 %
——————————————————————————–
No of employees 123 115 7.0 % 120
(FTE)
——————————————————————————–
No of depots 18 17 5.9 % 17
——————————————————————————–

In Denmark, construction declined more than expected in 2010. The industry–s
expectations for 2011 are cautiously positive.

The slower than expected rate of recovery in construction also affected Cramo–s
sales and profit. The Danish operations reported sales of EUR 14.0 (12.5)
million for January-June, for an increase of 12.3 per cent. Sales in the second
quarter amounted to EUR 7.8 (6.7) million, showing an increase of 15.2 per
cent. After the harsh winter, sales developed positively in the spring.

EBITA for January-June amounted to EUR -2.3 (-4.5) million, representing -16.3
(-36.0) per cent of sales. EBITA for April-June was EUR -0.6 (-1.3) million.

Cramo–s key target for Denmark in 2011 is to convert the result into profit.
The first-half year result improvement was particularly attributable to
improved fleet utilisation rates. In Denmark, too, a balance has been achieved
between the demand for and the supply of rental equipment after the downturn,
which offers opportunities for improving the profitability of the business.
Profitability is expected to improve further during the year.

In June, Euroconstruct estimated that the Danish construction market will show
an upturn with a growth rate of almost three per cent in 2011. However,
according to the local market forecast (Dansk Byggeri) published in February,
overall construction will show a further decline of one per cent in 2011,
compared with the previous year. In renovation projects, demand is good.

Cramo estimates that in terms of market position, it is the second largest
service provider in the sector in Denmark. At the end of the period under
review, Cramo had 18 (17) depots in Denmark.

Cramo–s key targets in Denmark are to increase profitability to a satisfactory
level and to achieve the –best in town– position in selected areas. The Group
will seek growth in the modular space business in particular. Modular space
sales increased as expected in the first half of the year. In addition to
hospitals, there is increasing interest in the use of modular space as school
premises.

Central Europe

Central Europe(EUR 4-6/11 4-6/10 Change 1-6/11 1-6/10 Change 1-12/10
1,000) % %
——————————————————————————–
Sales 19,945 30,556
——————————————————————————–
EBITA 1,640 451
——————————————————————————–
EBITA-% 8.2 % 1.5 %
——————————————————————————–
No of employees (FTE) 279
——————————————————————————–
No of depots 95
——————————————————————————–

Cramo Group–s equipment rental business sales in Central Europe come from the
German, Swiss, Austrian, and Hungarian markets. The business segment was formed
when Theisen Group, which was acquired in January 2011, was consolidated into
Cramo Group on 1 February 2011.

The integration of Theisen Group progressed as planned in all areas. In May, Mr
Dirk Schlitzkus (47), Attorney, was appointed Senior Vice President, Central
Europe, and member of the Cramo Group management team. He was also appointed
Managing Director of Theisen Baumaschinen AG.

In Central Europe, the market situation in equipment rental improved from the
previous year in all of Cramo–s markets. The German economy in particular
developed more strongly than expected in the first half of the year, which is
also reflected in the demand for equipment rental services. Demand has also
developed positively in Austria. Since the focus of the rental fleet in Central
Europe is on construction machinery, the segment is more strongly affected by
seasonal fluctuations than Cramo–s other business segments. After the winter
season, the second-quarter result developed positively.

The Central European operations reported sales of EUR 30.6 million for
February-June, of which EUR 19.9 million were generated in the second quarter.
EBITA for February-June was EUR 0.5 million, or 1.5 per cent of sales. EBITA
for April-June was EUR 1.6 million, or 8.2 per cent of sales. Fleet investments
continued as planned.

According the estimate published by Euroconstruct in June, construction will
increase in Germany by 1.7 per cent in 2011. In Switzerland and Austria, the
markets are expected to remain unchanged or to grow slightly. In Hungary,
construction is expected to decrease by three per cent.

At the end of the period, the number of depots in Central Europe was 95.
Cramo–s strategic target in Central Europe is to expand its product and service
offering in stages according to the Cramo Concept.

Eastern Europe

Eastern 4-6/11 4-6/10 Change 1-6/11 1-6/10 Change 1-12/10
Europe(EUR % %
1,000)
——————————————————————————–
Sales 14,999 10,698 40.2 % 27,868 19,712 41.4 % 49,886
——————————————————————————–
EBITA -1,524 -4,047 62.4 % -3,741 -8,886 57.9 % -11,464
——————————————————————————–
EBITA-% -10.2 % -37.8 % -13.4 % -45.1 % -23.0 %
——————————————————————————–
No of employees 565 506 11.6 % 532
(FTE)
——————————————————————————–
No of depots 72 65 10.8 % 65
——————————————————————————–

Cramo Group–s equipment rental business sales in Eastern Europe come from
Estonia, Latvia, Lithuania, Poland, the Czech Republic, Slovakia and Russia.
Until 31 December2010, the name of the segment was Central and Eastern Europe

The growth in construction which started in the second half of 2010 continued
in most Eastern European markets. The strongest rates of growth are seen in
Estonia and Poland as well as in the Moscow region in Russia. In the Baltic
States, construction activity has picked up in Estonia and Lithuania in
particular, thanks to residential construction and energy sector investments.

Cramo–s Eastern European operations reported sales of EUR 27.9 (19.7) million
for January-June, for an increase of 41.4 per cent. In local currencies, the
change in sales was 40.6 per cent. Sales for April-June were EUR 15.0 (10.7)
million, showing an increase of 40.2 per cent.

EBITA for January-June amounted to EUR -3.7 (-8.9) million, representing -13.4
(-45.1) per cent of sales. EBITA for the second quarter was EUR -1.5 (-4.0)
million, or -10.2 (-37.8) per cent of sales.

Cramo–s sales increased year-on-year in all markets. Profitability also
developed favourably in all market areas, although a positive result was not
yet achieved. Sales growth and adjustments concluded in earlier years improved
profitability.

According to the forecast published by Euroconstruct in June, construction
activity is expected to increase by up to 18 per cent in Estonia, by seven per
cent in Lithuania and by five per cent in Russia. In Latvia, the size of the
market will remain at the same level as in the previous year. In Poland, civil
engineering is expected to drive construction growth, which is predicted at
almost 13 per cent. In the Czech Republic and in Slovakia, the markets are
expected to decline by 1-2 per cent.

Cramo–s strategic target in Eastern Europe is to grow profitably and faster
than the market and to be the best rental service provider at the local level
in each market. Cramo also intends to decrease its dependence on the
construction industry.

During the period, new depots were opened in St. Petersburg and Tula in Russia
as well as in Estonia, Poland and the Czech Republic. At the end of the period,
the number of depots in Eastern Europe was 72 (65).

SHARES AND SHARE CAPITAL

On 30 June 1011, Cramo Plc–s share capital as registered in the Finnish Trade
Register was EUR 24,834,753.09 and the number of shares was 41,439,086. Cramo
Plc holds 316,288 of these shares through its subsidiary Cramo Management Oy.
During the period, the number of Cramo Plc shares increased by 9,489,877 new
shares due to a rights offering.

Based on the authorisation given by the Annual General Meeting on 24 March
2011, the Board of Directors of Cramo Plc decided to offer up to 9,489,877 new
shares for subscription with pre-emptive rights to existing shareholders. The
subscription price was EUR 10.50 per share, and the subscription right was
three new shares for every ten shares held on 29 March 2011. The share
subscription period was 1 to 15 April 2011. On 18 April 2011, Cramo announced
that the subscription percentage of the shares offered for subscription was
approximately 175 per cent. Of the total shares offered, approximately 97.2 per
cent were subscribed for with subscription rights and the remainder without
subscription rights.

Cramo announced the final outcome of the rights offering on 21 April 2011. As
the offered shares were subscribed for in full in the rights offering, the
underwriting commitments were not utilised. The shares were registered with the
Finnish Trade Register on 26 April 2011.

Cramo–s net proceeds from the rights offering amounted to approximately EUR
97.4 million, which will be used to support the company–s growth strategy and
to strengthen its balance sheet.

As a result of subscriptions made under the stock option rights 2006A, the
number of shares increased by 694,000 new shares in the first quarter. The
share subscription period for these stock options ended on 31 January 2011. In
the first quarter, the number of shares also increased by 374,532 new shares
issued to Arrex Beteiligungs-GmbH, a shareholder of Theisen Baumaschinen AG, in
a directed issue, and by afurther 220,488 new shares due to a share swap in
which Cramo acquired all of the shares in Cramo Management Oy from the Cramo
Executive Committee.

Current option programmes and incentive schemes

On 30 June 2011, Cramo Group–s key personnel held a total of 737,000 stock
options 2006B, 880,500 stock options 2006C, 891,000 stock options 2009 and
998,000 stock options 2010.

Stock options 2006B, 2006C, 2009 and 2010 did not entitle their holders to
participate in the rights offering decided on by the Board of Directors on 24
March 2011. Therefore, the subscription price and subscription ratio of the
stock options was amended in accordance with the terms and conditions of stock
options so that the share-specific subscription price is as follows: for stock
options 2006B, EUR 22.05; stock options 2006C, EUR 6.47; stock options 2009,
EUR 10.85; and stock options 2010, EUR 13.72. The subscription ratio will be
amended so that each stock option entitles the holder to subscribe for 1.3 new
Cramo Plc shares.

The Annual General Meeting held on 24 March 2011 decided that a maximum of
1,000,000 stock options be issued to the key personnel. The stock options will
be issued gratuitously, and they will entitle their owners to subscribe for a
maximum of 1,000,000 new shares in the company or existing shares held by the
company in total. The share subscription price will be based on the prevailing
market price of the Cramo Plc share on NASDAQ OMX Helsinki Ltd. in October
2011. The subscription period for the shares will be 1 October 2014 – 31
December 2015.

CHANGES IN SHAREHOLDINGS

Based on the underwriting agreement signed on 24 March 2011 relating to the
offering of Cramo Plc and the flagging notifications received by the company,
Cramo Plc announced on 25 March 2011 that it had received notifications from
Pohjola Bank plc and the business unit of Handelsbanken Capital Markets,
Svenska Handelsbanken AB (publ) concerning potential changes in the ownership
interest in case the underwriting for the offering were to be fully realised.
On 26 April 2011, Cramo Plc received, in accordance with Chapter 2, section 10
of the Finnish Securities Markets Act, a notification from Pohjola Bank plc and
the business unit of Handelsbanken Capital Markets, Svenska Handelsbanken AB
(publ), according to which no shares had been subscribed for by either party on
the basis of the underwriting agreement.

On 27 April 2011, Cramo Plc received a notification according to which the
combined share of the following companies and private individuals of Cramo
Plc–s shares and voting rights had on 26 April 2011 fallen below one-quarter
(1/4): Hartwall Capital Oy (6,491,702 shares, or 15.67 per cent of shares and
votes), K. Hartwall Invest Oy (2,732,000 shares, or 6.59 per cent of shares and
votes) and Kusinkapital Ab, Gustav Tallqvist, Pinewood Invest OÜ, Christel
Hartwall, Pallas Capital Oy, Fyrklöver-Invest Oy Ab, Antonia Hartwall, Emma
Hartwall, Axel Hartwall, Gulle Therman, Josefina Tallqvist, Victor Hartwall,
Peter Therman and Mats Therman. At the time of the announcement, the combined
holding of the parties listed above was 10,001,681 shares or 24.14 per cent of
Cramo Plc–s shares and votes.

VALID BOARD AUTHORISATIONS

The Annual General Meeting held on 24 March 2011 authorised the Board of
Directors to decide on the repurchase and/or on the acceptance as pledge of the
company–s own shares. The company–s own shares can only be acquired at a price
formed in public trading on the date of the repurchase or otherwise at a price
formed on the market. They can be acquired otherwise than in proportion to the
shareholdings of the shareholders (directed repurchase). The authorisation is
effective until the close of the next Annual General Meeting of Shareholders,
or no later than 24 September 2012.

The Annual General Meeting authorised the Board of Directors to decide on a
share issue which includes the right to decide on the transfer of the company–s
own shares, as well as on the granting of option rights and other special
rights entitling to shares as referred to in Chapter 10 of the Finnish Limited
Liability Companies Act. The shares issued will be new shares in the company or
shares held by the company. Under the authorisation, a maximum of 12,000,000
shares may be issued. The share issue and granting of special rights may be
carried out in deviation from the shareholders– pre-emptive right, provided
that there is a significant financial reason for the company to do so. The
authorisation is effective five years from the date of the decision of the
Annual General Meeting.

ESSENTIAL RISKS AND UNCERTAINTIES

In addition to global economic developments, the main sources of uncertainty in
Cramo–s business are related to the economic cycles and financial development
of each country, fluctuations in interest and exchange rates, availability of
financing, credit loss risks, the success of the Group–s acquisitions and
information system projects, personnel-related risks, the availability of
competent management and recruitment-related risks, tax risks and other
business risks.

As a result of the economic downturn in the last few years, the risks related
to rental prices in different markets as well as credit loss risks have
increased. In addition, the downturn increased the impairment risks to the
balance sheet values resulting from acquisitions.

The recent debt crisis in certain eurozone countries has increased the
uncertainty of near-term future economic development in Europe, which has
increased the risk levels associated also with Cramo–s business operations.

SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE

There have been no significant events after the balance sheet date.

ACCOUNTING PRINCIPLES

This Interim Report has been prepared in accordance with IAS 34: Interim
Financial Reporting. In the preparation of this Interim Report, Cramo has
applied the same accounting principles as in its financial statements for 2010,
except for the revised IFRS standard IAS 24 (Related Party Disclosures), which
the company adopted on 1 January 2011, as well as other changes in other
standards attributable to this change.

The above-mentioned changes in standards have not had a significant impact on
the reported balance sheet, income statement and notes to the Interim Report.

CONSOLIDATED BALANCE SHEET (EUR 1,000) 30 Jun 2011 30 Jun 2010 31 Dec 2010
——————————————————————————-
ASSETS
——————————————————————————-
Non-current assets
——————————————————————-
Tangible assets 603,656 508,210 526,326
——————————————————————————-
Goodwill 171,386 143,368 147,998
——————————————————————————-
Other intangible assets 128,106 91,002 102,001
——————————————————————————-
Deferred tax assets 16,602 15,106 14,301
——————————————————————————-
Available-for-sale financial investments 362 343 347
——————————————————————————-
Derivative financial instruments 2,650 1,053
——————————————————————————-
Trade and other receivables 3,733 2,986 3,613
——————————————————————————-
Total non-current assets 926,496 761,016 795,638
——————————————————————————-
Current assets——————————————————————————-
Inventories 17,988 13,166 13,803
——————————————————————————-
Trade and other receivables 157,685 105,059 125,333
——————————————————————————-
Income tax receivables 7,424 12,481 5,114
——————————————————————————-
Derivative financial instruments 246 218 825
——————————————————————————-
Cash and cash equivalents 17,104 11,885 22,313
——————————————————————————-
Total current assets 200,447 142,808 167,388
——————————————————————————-
Assets available for sale 6,327 2,795 2,671
——————————————————————————-
TOTAL ASSETS 1,133,269 906,618 965,697
——————————————————————————-

——————————————————————————-
EQUITY AND LIABILITIES
——————————————————————-
Equity
——————————————————————-
Share capital 24,835 24,835 24,835
——————————————————————————-
Other reserves 300,722 186,925 188,797
——————————————————————————-
Fair value reserve 117 117 117
——————————————————————————-
Hedging fund 538 -2,773 -1,197
——————————————————————————-
Translation differences 329 -3,079 3,426
——————————————————————————-
Retained earnings 91,751 85,859 103,309
——————————————————————————-
Equity attributable to shareholders 418,293 291,885 319,287
of the parent company
——————————————————————————-
Non-controlling interest 503 503
——————————————————————————-
Hybrid capital 49,630 49,630 49,630
——————————————————————————-
Total equity 467,923 342,018 369,420
——————————————————————————-
Non-current liabilities
——————————————————————————-
Interest-bearing liabilities 367,985 331,915 346,776
——————————————————————————-
Derivative financial instruments 467 5,456 2,543
——————————————————————————-
Deferred tax liabilities 88,548 73,409 78,348——————————————————————————-
Provisions 1,541
——————————————————————————-
Other non-current liabilities 5,615 1,261 4,207
——————————————————————————-
Total non-current liabilities 464,156 412,040 431,875
——————————————————————————-
Current liabilities
——————————————————————————-
Interest-bearing liabilities 78,750 62,158 57,569
——————————————————————————-
Derivative financial instruments 842 896 1,853
——————————————————————————-
Trade and other payables 117,519 84,650 100,984
——————————————————————————-
Income tax liabilities 4,078 4,856 3,997
——————————————————————————-
Total current liabilities 201,190 152,560 164,403
——————————————————————————-
Total liabilities 665,346 564,600 596,277
——————————————————————————-
TOTAL EQUITY AND LIABILITIES 1,133,269 906,618 965,697
——————————————————————————-

CONSOLIDATED INCOME STATEMENT 1 4-6/11 4-6/10 1-6/11 1-6/10 1-12/10
Jan 2011 – 31 Jun 2011 (EUR
1,000)
——————————————————————————–
Sales 161,135 113,964 305,352 215,363 492,103
——————————————————————————–
Other operating income 2,496 1,808 3,790 9,424 15,110
——————————————————————————–
Change in inventories of finished -479 446 101 719 1,015
goods and work in progress
——————————————————————————–
Production for own use 2,486 764 3,282