After a very strong second half of the year, the diversification and recurrence of the company's business have helped to minimize the impact of the crisis caused by the pandemic. The balance sheet has been strengthened with a capital increase (€31.5 million) and the restructuring of syndicated debt (€75.4 million), which has also been converted into sustainable debt.
The Spanish multinational GAM (General de Alquiler de Maquinaria - BME: GALQ), a company specialized in comprehensive machinery solutions for industry, has just published its results for the 2020 financial year. During this period, the company quickly responded to the COVID-19 crisis and has proven to have a flexible and resilient business.
The past year has been the most challenging for the global economy in the last 75 years, and despite this, GAM achieved a sales figure of €133.6 million, reaching an EBITDA of €38.2 million (29% of sales) and a net profit of €1.2 million. Revenue fell by a minimal 6% compared to the €142.7 million achieved in 2019, due to a first half of 2020 particularly affected by the pandemic.
These results were achieved by focusing on protecting the people who make up the team, servicing its clients, satisfying its investors, and contributing to society. Last year, during the early months of the pandemic, the company was forced to implement an ERTE (temporary layoff) due to a decline in activity, which was gradually phased out as activity began to recover, reflecting GAM’s commitment to its employees.
The activity evolution in the second half of the year (H2) was very positive, and compared to the first half of the year (H1), revenue grew by 26% and EBITDA by 47%, resulting in a profit of €5.1 million during that period, which more than compensated for the negative impact of the first half (sales of €59.2 million vs. €71.9 million in H1 2019 and losses of €4 million).
In addition to the strong business performance, the company has strengthened its balance sheet by carrying out a €31.5 million capital increase (disbursed in November 2020) and restructuring its syndicated debt of €75.4 million, converting it into sustainable debt through a "KPI Linked" model, which ties it to certain environmental and social KPIs (Key Performance Indicators). Thus, at the end of 2020, GAM had a net financial debt of €108.6 million, 11% lower than in 2019, maintaining similar leverage levels to that year.
According to GAM's Executive Chairman, Pedro Luis Fernández, "GAM has focused on the well-being of our employees and on maintaining a close relationship with all our clients during this pandemic, even strengthening it. The results we have just presented are a testament to our strength and the ability of our employees to face adversity with effort and determination. We are undoubtedly well-prepared to tackle this uncertain 2021, during which we will continue to expand our service portfolio to support our clients and generate more value for them."
The high diversification in services and business lines has led to a quick recovery of high activity rates, achieving a "V-shaped recovery." Thus, at the lowest point, the company maintained 55% of its pre-pandemic activity, and by the end of the year, activity had fully recovered in the domestic market, with somewhat slower performance in Latin America.
One of the keys to GAM's good performance is its business mix, as approximately 54% of revenue comes from recurring services and businesses that do not require investment ("Capex-Free Businesses"), making the company less dependent on economic cycles or crises such as the one experienced in 2020 due to COVID-19.
The main figures at the end of the past financial year highlight the company's resilience to the crisis caused by the pandemic, with revenue of €133.6 million (-6% vs. 2019), EBITDA of €38.2 million (29% of sales), and a net profit of €1.2 million.
GAM has a high level of available liquidity (€56 million), which will allow it to seize opportunities for both organic and inorganic growth.
Main Figures
Consolidated Data (millions of euros)
During the past year, GAM has initiated a transformation process by launching a digitalization program in collaboration with the specialized company Rooter, focusing on people, processes, and data efficiency.
Additionally, GAM is engaged in a Sustainability Plan after joining as a partner with EIT InnoEnergy, working on both circular economy and last-mile projects, with the goal of ensuring environmental preservation.
