Loxam not expecting strong recovery in 2021
By Murray Pollok17 March 2021
Loxam has reported a 6% increase in revenues to €1,989 million for the year 2020, although like-for-like – adjusting for the acquisition of Ramirent in July 2019 – revenues were 13% down.
Europe’s largest rental business said it was expecting a rebound in markets in 2021 but that government and EU stimulus efforts were unlikely to produce a strong recovery in its business this year.
The final quarter to 31 December 2020 saw revenues 9.2% lower year-on-year at €533.4 million, with Loxam’s international business down 12.8%.
Its generalist business in France was 5.4% lower at €165.2 million, while its specialist businesses in France proved more resilient, growing almost 1% to €62.8 million in the three months.
Gérard Déprez, Loxam’s Chairman and CEO, said he was very satisfied with the year, which has been a “real stress test for our business model, the engagement of our teams and our financial strength.
“In the face of unforeseen circumstances, we have demonstrated our ability to quickly take appropriate decisions, enabling us to safeguard the health and safety of our staff and customers, while delivering a high standard of quality of service, keeping a high EBITDA margin and strong positive free cash flow beyond market expectations.”
Déprez added; “I salute the professionalism and solidarity of our 10,800 staff members who demonstrated their relentless engagement, flexibility and adaptability”.
EBITDA profits for the year rose by 3.7% to €727.9 million. EBITDA margins were in the 34%-40% range for all its businesses, and 36.6% overall.
On the energy transition, Déprez said Loxam was favouring equipment “with no or low carbon emission levels and that we are working on our trajectory to reduce carbon emissions.”
Loxam said it expected a market rebound this year, but that it was too early for national and European stimulus plans to create a strong recovery.
“Although all governments in Europe have announced substantial relief packages, which should bolster the construction sector”, said Déprez, “it is too early for those plans to have a material impact on our industry before the end of 2021.
“We will therefore continue to apply our strict cost and capex control policy for the foreseeable future, continue to lower our debt and reduce our financial leverage.” Loxam’s gross fleet CapEx in 2020 decreased by 59% to €192 million.