29 February 2008. GAM (General de Alquiler de Maquinaria), the leading machinery rental company in Spain and Portugal, has met its growth targets for the fiscal year 2007, which had predicted net sales of more than EUR 300 million. Their strong presence in infrastructure projects and the progressive expansion of its diversification activities allowed the company to maintain its growth rate in the year's fourth quarter despite the general slowdown seen in the residential construction sector, to which the company was hardly exposed. As such, the turnover in the sluggish October-December period of 2007 was 77% greater than that recorded in the corresponding 2006 period (EUR 91 million in the 4thQ07 vs. EUR 51 million in 4thQ06).
For the entire 2007 fiscal year, the turnover reached EUR 307 million, a growth of 66% with respect to the corresponding growth in 2006. As in the previous quarter, the increase in sales can be explained from both a quantitative and a qualitative point of view.
Quantitatively, the increase in revenue largely stems from two factors: organic growth and constant openings of new branch offices with the aim of offering an improved and more localised service to clients (at the close of 2007, GAM had a total of 96 general branch offices – and 7 other specialised offices – compared to the 57 it had on 31 December 2006). Additionally, the acquisitions of Vilatel and Viasolo, which went on to form part of Group’ consolidation boundary from 1 June 2007, have also contributed.
Qualitatively, GAM's ability to increase its penetration rate in the equipment rental industry has been outstanding. And even more so in the current climate of economic uncertainty and credit restrictions where equipment rental, in the majority of cases, proves to be a more efficient alternative than its purchase. Moreover, the strengthening of diversified activities (wind power, logistics and distribution, among others) is allowing GAM to enter new industries with high potential for growth.
During the fiscal year 2007, the operating results in terms of EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation) increased by 86% up to EUR 137 million. And, once again, this growth was accompanied by an improvement in the EBITDA margin, which rose to 44% compared to 40% for the previous full fiscal year.
GAM's net profit for 2007 was EUR 25 million, a 44% increase over the previous year. The figure recorded in 2007 was affected by two circumstances: the consolidation of the costs associated with the issuance of convertible bonds with financial expenses for a total of EUR 125 million that the company successfully completed this past August and the impact of the goodwill amortisation expenses as a result of the Vilatel and Viasolo acquisitions during the second quarter of 2007.
Million euro 2007 2006 Diff. (%)
Turnover 307.46 185.59 65.66
EBITDA 136.62 73.56 85.72
EBITDA Margin (%) 44.43 39.42
Net profit 24.99 17.31 44.36
Net Profit Margin (%) 8.12 9.27
OUTLOOK
GAM's sales for the 2008 fiscal year will show a significant boost due to the incorporation of Vilatel and Viasolo into their consolidation boundary for the full year (they were only included in the 2007 fiscal year since 1 June). Similarly, the recent acquisition of Guimerá, the leading Spanish company providing rental services for temporary energy supply by means of electric generators, will also have a positive influence on the figures.
GAM's core business is forecasted to continue on a positive course in the upcoming months, a period in which an increase is expected in the rate of equipment rental compared to its purchase due to the current economic setting, and the Group will continue increasing the weight of diversified activities as part of the entire volume of its business.
GAM is the leading machinery rental company in the Iberian market; a highly fragmented sector in which GAM is a comprehensive global operator thanks to its extensive network of branch offices. The company now has over 100 branch offices across Spain and Portugal and a fleet of approximately 60,000 pieces of machinery made by the finest manufacturers on the market to serve diverse sectors such as public works, industry, logistics, wind power, events, and energy among others. Their equipment includes platforms, self-propelled mobile cranes, telehandlers, forklifts, electric generators, industrial floor sweepers, rail-ready machinery, lighting and sound equipment and transport vehicles, among others. GAM additionally has a division called ServiGAM which is dedicated to serving the tool and light machinery needs of individuals and professionals.
For further details:
Covadonga Coto
GAM
Director of Corporate Development
ccoto@gamalquiler.com
Tel. (+34) 985 73 22 73
Ignacio Cadahía
GAM
Investor Relations
icadahia@gamalquiler.com
Tel. (+34) 985 73 22 73
Gonzalo Torres / José Luis González Gavin Anderson & Co.
gtorres@gavinanderson.es
jlgonzalez@gavinanderson.es
Tel. (+34) 91 702 71 70
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