Ferronordic Ab · OMXSTO:FNM
Ferronordic Ab — Q3 2022 Earnings Presentation
18 slides from Ferronordic Ab's earnings presentation, November 2022
Slide 1: Third quarter 2022
IN FERRONORDIC Third quarter 2022 November 2022
Slide 2: Refocusing resources
Refocusing resources Group • Revenue decrease of 11% to SEK 1,479m partly offset by currency effects • One-off SEK 321m payment from Volvo CE related to termination of dealership in Russia • Russia effectively isolated from rest of Group Germany: • Trucks sales in units decreased by 5%, partly due t
Slide 3: The conditions for our business in Russia continue to deteriorate
Q3 2022 The conditions for our business in Russia Refocusing resources have continued to • Conditions for our business in Russia continue to deteriorate deteriorate • We take all measures to ensure that our operations in Russia comply with applicable laws. As a result, our business is limited in sco
Slide 4: Group summary financials
Q3 2022 Group summary financials SEK 1,479m Group revenue -11% to SEK 1,479m (-11%) revenue • Russia/CIS revenue -44% in local currency and -16% in SEK 1,119m • Equipment sales -67% (-78% in RUB), aftermarket sales +15% (-24%) and contracting services +117% (+44%) • German revenue +10% to SEK 359m (
Slide 5: Russia/CIS operational highlights
Q3 2022 -67% Russia/CIS operational highlights in equipment sales (-78% in RUB) • According to aebrus.ru, which does not include all brands, the Russian market declined 43% in Q3 2022 • Ferronordic’s assessment is that the total market has indeed declined but that Western brands are being replaced b
Slide 6: Germany operational highlights
Q3 2022 German trucks Germany operational highlights market increased 6% Y-o-Y • Based on registrations of new trucks, the total German market for heavy trucks increased by 6% in Q3 20221 • Rigids declined by 11% while tractors grew by 24% • The market remains strong and supply constraints currently
Slide 7: Business development
Business development Russia Working towards a sale of • Working towards a sale of the business to free up and reallocate resources the Russian business to Group and new business areas • Complex market for corporate control • International capital flows are restricted and subject to certain approvals
Slide 8: German network expansion
German network expansion • Fulda - Transaction closed in January 2021 • Limburg - Transaction closed in April 2021 • Nordhausen - Transaction closed in June 2021 Hannover • Service and sales hub in Hannover Barleben Coswig • Greenfield Dessau Nordhausen • Investments in 2021 and 2022 Kassel Leipzig
Slide 9: Economic development
Economic development Germany’s economy • Germany • +1.1% GDP in Q3 20226 +1.1% in Q3 2022 • +1.5% GDP expected in 20222 • -0.3% GDP expected in 20232 • Inflation reached 10.4% and energy prices were +43% Y-o-Y in October Kazakhstan’s economy • Kazakhstan • +3.5% GDP in 9m 20224 +3.5% in 9m 2022 • +2
Slide 10: Income statement (adjusted)
Q3 2022 Income statement (adjusted) Q3 2021 Q3 2021 Q3 2021 Q3 2022 Q3 2022 Q3 2022 % change Q3 2022 SEK MM • FX important factor Y-o-Y Russia / Russia / Group Germany Group Germany Group Group CIS CIS (adjusted) • Total revenue of SEK 1,479m FX (SEK/RUB, 8.50 10.20 5.63 10.62 EUR/SEK) o 76% Russia/
Slide 11: Cash flows
Q3 2022 Cash flows Q3 2022 • In Q3 2022, Group cash flows were Q3 2021 Q3 2022 Q3 2022 Q3 2022 impacted by the SEK 321 compensation SEK MM Group Group Russia/CIS Germany Group payment from Volvo CE to the parent (adjusted) company Cash flow from: • Adjusted for this inflow, cash flow from Cash flows
Slide 12: Balance sheet
Q3 2022 Balance sheet SEK MM Q3 2021 Q2 2022 Q3 2022 • Y-o-Y changes in the balance sheet were significantly driven by the stronger RUB FX (SEK/RUB, EUR/SEK) 8.82, 10.14 5.04, 10.68 5.07, 10.92 • PP&E increased Y-o-Y mainly due to the appreciation of the RUB Property, plant and equipment 850 1,301 1
Slide 13: Russia standalone financial statements
Russia standalone financial statements Q1, Q2 and Q3 2022 and preliminary October 2022 sales SEK MM 31 Mar 2022 30 Jun 2022 30 Sep 2022 SEK MM Oct 2022 FX (SEK / RUB) 5,04 5,04 5,07 FX (SEK / RUB) 5.47 ASSETS Non-current New units 5 PPE 529 829 757 Used units 3 Current: Inventories 861 977 803 Total
Slide 14: NAV Russia 30 September 2022
SEKm 0 1 000 2 000 3 000 4 000 Cash and equivalents 375 Trade and other 872 receivables EBIT Q4 19 New (76m) and used (47m) machines inventory 123 Parts (579m) and other 680 (101m) inventory Contracting Services PPE 549 Other PPE 208 Other assets 761 Trade and other payables 833 Contracting Services
Slide 15: Financial objectives and dividend policy
Financial objectives and dividend policy Subject to review KPI Objective Last Twelve months (LTM) Double the 2020 revenue in its 1.5 x Revenue 1 current markets by 2025 (in SEK) 2020 revenue Operating margin Above 7% 7.6% Below 3 times (over a business Net debt / EBITDA 0.5 x cycle) The ambition is
Slide 16: Outlook
Outlook The prospects for our operations in Russia continue to deteriorate and we are currently working towards divesting our Russian business. Our operations in Kazakhstan continue to develop positively and we actively seek opportunities to grow our product and business portfolio. In Germany, we co
Slide 17: Refocusing resources
Refocusing resources Group • Revenue decrease of 11% to SEK 1,479m partly offset by currency effects • One-off SEK 321m payment from Volvo CE related to termination of dealership in Russia • Russia effectively isolated from rest of Group Germany: • Trucks sales in units decreased by 5%, partly due t
Slide 18: IN FERRONORDIC
IN FERRONORDIC