Fraikin, which employs some 3,500 people, primarily provides long-term leases of industrial and commercial vehicles, including all services related to their use (77% of revenues, with a standard term of three to five years). The company also offers short-term leases.
Its customer base covers a broad spectrum of activities: transporters, distributors and logisticians, and industrial and commercial companies of all sizes. The group has a historical presence in France, the United Kingdom, Belgium, Luxembourg and Spain, and more recently expanded into Poland, Slovakia and Switzerland.
With a renewed marketing and commercial policy, Fraikin continuously develops new service offers for its different activities in order to provide solutions that best meet its customers’ expectations.
The year was marked by a severe deterioration of the economic environment early on, with no subsequent rebound in demand. For Fraikin, these conditions resulted in:
- In long-term leasing (77% of total revenues): stability of revenues, reflecting the stability afforded the group by its strategy of using long-term contracts;
- In short-term leasing (11% of total revenues): a significant (-25.7%) decrease in revenue, stemming from the group’s strategy of rapidly adapting its customers’ capacities to the lower level of demand.
- In the sale of used vehicles: in light of the worsening conditions in the used vehicle market, due notably to the dramatic drop-off in demand from Eastern Europe, gains on sales were considerably lower, but the group continued to generate gains (E4.2 million in 2009) and the net carrying amount of the vehicles sold rose by 13%.
To address these market difficulties, since the end of 2008 Fraikin has undertaken an ambitious program to right-size its cost structure, improve certain horizontal functions (purchasing, etc.) and optimize its fleet (reduction of capex by 46% to E220 million). In 2009, this program generated satisfactory results that improved the group’s operating margins: the EBITA rental margin (i.e. excluding gains) increased from 13.2% to 14.6%.
The major strategic initiatives for 2010 will be:
- Strengthening proximity to customers and assisting them with their operations;
- Continuing efforts to optimize costs and organization, in order to continue to improve operational performances;
- Optimizing assets by extending existing contracts and signing new contracts at rates that incorporate the impact of new financing constraints.
|
