Loxam commits to digital transformation

France-headquartered rental company Loxam is to focus on digital transformation and emissions reduction, following a “record 2021” and rebound from the Covid-19 crisis.

The group also indicated a positive outlook for 2022 tempered by uncertainty resulting from the conflict in Ukraine. 

A Loxam depot in France. (Photo: Loxam).

Loxam’s consolidated revenue for the full year 2021 was up 9.9% to €2,185 million. EBITDA was €777 million, up by 6.8%.

For the final quarter of 2021, revenue was €585 million, up by 9.7%. EBITDA was €202 million while the group also posted its tenth consecutive quarter of positive recurring free cash flow. Gross Capex for the quarter was €178 million.

Gérard Déprez, Chairman and CEO of Loxam, said that with revenue exceeding €2 billion for the first time in its history, “2021 was a record-breaking year for Loxam that demonstrated the pertinence of the Group’s strategy, as the crisis has been largely overcome.

“The rebound that began in France in H2 2020 and progressively in 2021 in other countries gained momentum in the second half of the year. Our financial objectives for the year have been exceeded thanks to both our geographical diversification and our ability to adapt quickly when the market recovers.

“Fixed costs returned to their pre-Covid level and we also increased discretionary spending. Nevertheless, EBITDA margin remained strong, reflecting our financial discipline. We also increased our capex to an amount of €444 million, a level exceeding depreciation costs.

He said Loxam had “continued and accelerated” its digital transformation through the launch of Cap Digital, a new three year IT plan, which will encompass digitalisation initatives over three years with a focus on operational improvements, customer services and Big Data.

Déprez also described 2021 as a ground-breaking year for the Group in terms of CSR, particularly its commitment to the reduction of CO” emissions by 2030. 

“In 2021, capex with low or zero CO2 emissions represented 46% of the Group’s total capex.”

Gérard Déprez, Chairman and CEO of Loxam. (Photo: Loxam).

Last year saw Loxam committing to supporting Science Based Targets, starting with energy performance improvements at its branches and the use of renewable energies.

As of January 1, 2022, Loxam’s 500 French branches are powered by electricity and gas from renewable sources. 

In 2022, the company said it anticipates “a significant acceleration” of business, supported by positive market trends in the construction sector and by the dissipation of the negative effects of the Covid pandemic.

“The Group’s capex program of €700 million has been designed to increase the group’s capacities and boost revenue growth, and we expect it to contribute to the improvement of the group’s profitability.”

The group added that the economic consequences of the war in Ukraine, were “expected to undermine the growth rate of the European countries in which we operate.”

“Shortages in construction materials, delays in delivery of equipment and increased costs could negatively affect our customers’ businesses and therefore our activity.

“Business trends have been generally well oriented during Q1 2022, but visibility is now reducing as the consequences of the war have not yet been fully felt. The current increase in energy costs has so far had little effect on our profitability as we are able to re-invoice most of them to our clients.

The group said it was closely monitoring the situation to anticipate potential impacts on its supply-chain or business activity.

The Group has no activity in Ukraine and operates in Russia through a 50% owned joint venture. It said its stake in this entity had a “negligible contribution” to the Group’s assets and results as of and for the year ended December 31, 2021.

“Loxam is deeply concerned by the situation in Ukraine and its thoughts are with all the people suffering from this terrible conflict.”