Loxam profits hit but still grows in 2008

The impact of the economic slowdown has hit Loxam's profitability in 2008 but not stopped the company from growing. Sales rose 14.9% to €847.7 with net profits falling 32% to €37.1 million. Revenues were almost flat on a like-for-like basis.

Gerard Deprez, in a briefing to the French press in mid-March, said the company was expecting revenues to fall by between 5% and 15% this year and that the economy would remain difficult for the next 18 to 24 months. He told journalists that Loxam now believed it would not hit its previous target of €1 billion turnover in 2010.

The company is responding to the downturn by reducing its capital investment in new equipment and by making job cuts, although Mr Deprez said the approximate 6% reduction in staff would be accounted for mainly by voluntary redundancies and by non-renewals of short-term contracts.

Loxam's published financial data shows that its EBITDA profits were €302.4 million, or 35.7% of revenues. Just over 70% of its revenues are from rental activities, with fuel, transport and other charges representing 21.9% of revenues and sales of equipment just 7.8%.

Revenues outside France accounted for €141 million, or 16.9% of the total. The company has 14 depots in Spain, 17 in UK/Ireland, 10 in Belgium, 7 in The Netherlands, 19 in Denmark, 13 in Germany, 1 in Luxembourg and 7 in Sweden.