Ferronordic Ab · OMXSTO:FNM
Ferronordic Ab — Investor Presentation (November 2023)
35 slides from Ferronordic Ab's investor presentation, November 2023
Slide 1: Company Presentation November 2023
IN FERRONORDIC Company Presentation November 2023
Slide 2: Introduction to Ferronordic Group
CIS Central Asia Introduction to Ferronordic • Dealer of Volvo CE in Kazakhstan from January 2019 Group • Dealer of Mecalac in Kazakhstan from January 2019 • Founded in 2010 • Dealer for Sandvik mobile crushers • Listed on Nasdaq Stockholm and screens in Kazakhstan from in 2017 September 2022 • Serv
Slide 3: Introduction to Ferronordic
Introduction to Ferronordic Development Employees Revenue (SEKm)1 Outlets 2010 (Start) ~160 1,184 6 Employees Revenue (SEKm)1 Outlets Q3 2023 502 2,653 29 Revenue by Activity (LTM) Revenue by Industry - Central Asia (2022) Other Revenue 4% General Quarries & Construction & Aggregates Aftermarket Equ
Slide 4: Value pyramid
Value pyramid Vision • Being the leading service and sales company in our markets Mission • Support the growth and leadership of our customers • Quality Values & • Excellence Operating Principles • Respect • Diversified experience • Innovative solutions Our Offer • Complex approach • Superior servic
Slide 5: Germany: Europe's largest truck market
Germany Europe’s largest truck market Heavy truck registrations in Germany (units) 80,000 120 70,264 70,000 67,797 68,450 67,908 115 65,280 66,441 61,940 60,218 58,574 110 60,000 55,167 55,215 55,386 55,089 50,427 105 48,827 50,000 40,322 100 40,000 95 30,000 90 20,000 85 10,000 80 0 75 2008 2009 20
Slide 6: Kazakhstan: Key regional hub
Kazakhstan: Key regional hub Central Asia Kazakhstan at a glance Kazakhstan’s GDP development5 • Population: ~19 million1 6.0% 4.8% • Area: 2.7 million sq. km1 4.2% 4.1% 4.1% 4.5% 4.3% 3.3% 4.6% 4.2% • Major transport and logistics hub in the region linking Europe and Asia • Rich in oil & gas (35% o
Slide 7: Strategic objectives
Strategic objectives Leadership in the market Aftermarket absorption Expansion into related for construction rate of at least 1.0 x business areas equipment and trucks Expansion and Industry leading digital development of Geographic expansion service and sales platforms contracting services 7
Slide 8: Strategic cornerstones
Strategic cornerstones Customer Orientation Build on Strong Brand - Volvo ▪ Customer centricity ▪ World leading manufacturer of trucks and construction equipment ▪ Leading service and product availability ▪ Strong brand position ▪ Tailored customer solutions (including contracting and other business
Slide 9: UN Sustainable Development Goals
UN Sustainable Development Goals 7 12 13 14 15 3 4 5 10 ▪ Minimum emissions and waste ▪ High-quality, long-life, fuel- efficient and safe machines ▪ Injury-free objective ▪ Maximising uptime for efficient ▪ 57,000 hours of training and production development ▪ Focus on sustainable transport ▪ Strivi
Slide 10: Product offering
Product offering Volvo CE Volvo & Mecalac Sandvik Renault Trucks Since Since Since Since 2019 2020 2019 2022 Product Range Product Range Product Range Product Range Mobile Crushers and Full VCE Range Full Volvo & Renault Trucks Backhoe Loaders and Range Compact Equipment Screens Area Area Area Area
Slide 11: Germany
Germany Network • Ferronordic expanded to become dealer for Volvo and Renault Trucks in Germany in January 2020 • Germany is Europe’s largest trucks market Hanover with 55,000 registrations in 2022 Peine Barleben Coswig • Ferronordic’s sales area covers approx. 20% Northeim Dessau Nordhausen of the
Slide 12: Kazakhstan
Kazakhstan Network Astana Ust-Kamenogorsk Aktobe Karaganda Atyrau Aschaffenburg Almaty Shymkent 12 (7) Ferronordic outlets in Kazakhstan as of October 2023
Slide 13: Complexity of Customer Demand
Moving torward further customer integration Complexity of Customer Demand Business Consultancy Business Services Open Platform Total Cost of Ownership Customised Solutions Upcycling Part Sales Services Rental Segment Experience Grow in new Machine/Truck Sales Finance Segment Ferronordic’s Offering 1
Slide 14: Aftermarket focus
Aftermarket Sales Aftermarket focus • Proactive customer coverage based on real- time data from the existing machine population Share of sales Share of sales (LTM) Central Asia (LTM) Germany • Proprietary system transforms machine Other telematic signals (e.g. VCE’s CareTrack) into 4% sales leads on
Slide 15: Connectivity & Digitalisation
Connectivity & Digitalisation Focus on growing sales Telematics System Rules Engine Customer Proposals Sales Action Follow Up • Telematics systems, e.g. • Signals from the telematics • Sales leads and concrete • Responsible sales • Customer proposals Volvo CE’s CareTrack, systems flow through the cu
Slide 16: Contracting services
Contracting services Integrating with our customers Traditional method Contracting services • Part of strategy to become increasingly integrated in the business of our customers • In addition to supplying and maintaining machines, we Machines provide customers with operators to carry out specific wo
Slide 17: Volvo & Renault Trucks
Volvo & Renault Trucks Germany Authorised aftermarket dealer for Volvo and Renault Trucks in parts of Germany • Ferronordic services and sells Volvo and Renault trucks, trades and restores used trucks and manages a trucks rental business • Ferronordic will invest to grow and improve network in area
Slide 18: Cash flow & capital allocation
Cash flow & capital allocation Working Capital Development Net Debt/(Cash) Development 1,200 30% 800 1184 23% 1,000 20% 25% 400 20% 579 800 18% 20% 0 SEKm SEKm 600 11% 15% -378 -400 -539 -681 400 503 472 538 10% -800 -957 200 5% 215 0 0% -1,200 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q3 2022 Q4 2022
Slide 19: Ferronordic expands to the US
Ferronordic expands to the US
Slide 20: Ferronordic enters the United States
Ferronordic enters the United States Ferronordic has entered into an agreement to purchase 100% of the shares of Rudd Equipment Company, Inc. (“Rudd”), one of the largest dealers of Volvo Construction Equipment in the US • Geographic expansion Visionwas always a strategic objective for Ferronordic •
Slide 21: About Rudd
About Rudd • Rudd Equipment Company was founded in 1952 • The Company is based in Louisville, Kentucky, has 13 outlets and approx. 360 full-time employees • Rudd is one of the largest Vision distributors of Volvo Construction Equipment in the US with operations in all or parts of nine states • The c
Slide 22: Financial history
Financial history USD m *8M 2023 *6M 2023 2022 2021 2020 2019 Revenue 180.7 Vision 138.1 308.3 252.9 210.8 246.5 EBIT 13.3 9.7 16.5 0.5 1.7 12.7 EBT Mission 12.7 9.3 16.4 7.9 0.3 9.0 • Information on 2019-2022 Valuesare & based on the company’s audited US GAAP financial statements and adjusted for t
Slide 23: Transaction summary
Transaction summary • Ferronordic to purchase 100% of Rudd for a price of USD 95.0m • In addition, Ferronordic will also acquire two real properties for USD 10m Vision • After the transaction, Rudd will own 8 of its 13 locations • The total price for the stock in Rudd and the two properties amounts
Slide 24: Third quarter 2023
IN FERRONORDIC Third quarter 2023 November 2023
Slide 25: Q3 2023: Weak operationally. Key strategically.
Q3 2023: Weak operationally. Key strategically. • Subsequent event: Ferronordic acquires major Volvo CE dealer in the US Group • 56% increase in revenue with growth in both operating segments • Lower margins, higher costs, higher working capital • Operating result decreased to SEK -28m and operating
Slide 26: Q3 2023 Group summary financials
Q3 2023 Group summary financials SEK 643m Group revenue +56% to SEK 643m (+56%) revenue • German revenue +60% to SEK 574m (+44% in EUR) • Truck sales +88% (+69% in EUR), aftermarket sales +27% (+14%) and other sales -14% (-22%) • CA revenue +30% (+23% in local currency) to SEK 69m SEK -28m • Equipme
Slide 27: Q3 2023 Germany operational highlights
Q3 2023 Our new truck sales in Germany operational highlights units increased by 45% • Based on registrations of new trucks, the total German market for to 241 units in Q3 2023 heavy trucks increased by 45% in Q3 2023 1 • Tractors grew by 50% and rigids by 40% • The market grew mainly as supply impr
Slide 28: Q3 2023 CA operational highlights
Q3 2023 Sales of new machines CA operational highlights in units increased by 6% to 17 • The Kazakh market for construction equipment is supported by Kazakhstan’s growing role as a regional hub, strong commodity prices and big infrastructure projects • Excluding Chinese wheel loaders, the Kazakh mar
Slide 29: Germany: Trend in operating result and margin
Germany: Trend in operating result and margin 10 2% 0.8% 5 5 2 0 0% -5 -2 0.3% -16 -0.4% -5 -1.4% -10 -2% -2.8% -15 -20 -4% Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Operating profit (SEK m) Operating margin (%) 6
Slide 30: Kazakhstan: Trend in operating result and margin
Kazakhstan: Trend in operating result and margin 10 10% 9% 9% 8% 8 8% 6% 7 6 7 6% 5 4 4% 4 2 2% 0% 0 0 0% Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Operating profit (SEK m) Operating margin (%) 7
Slide 31: Q3 2023 Income statement
Q3 2023 Income statement Q3 2022 Q3 2022 Q3 2022 Q3 2023 Q3 2023 Q3 2023 % change • Total revenue up by +56% to SEK 643m SEK MM CA Germany Group CA Germany Group Group o 89% Germany and 11% CA o 70% equipment and trucks, 27% FX (SEK/KZT, EUR/SEK) 45.15 10.62 42.10 11.76 aftermarket and 3% other New
Slide 32: Q3 2023 Segment reporting
Q3 2023 Segment reporting Unallocated Germany CA Group costs1 Total Q3 Q3 Q3 Q3 Q3 Q3 Q3 Q3 SEK m (or as stated) 2023 2022 2023 2022 2023 2022 2023 2022 External revenue 574 359 69 53 643 412 Equipment and truck sales 396 211 54 38 449 249 Aftermarket sales 158 125 15 15 173 140 Other revenue 20 23
Slide 33: Q3 2023 Balance sheet
Q3 2023 Balance sheet SEK MM Q3 2022 Q2 2023 Q3 2023 • PP&E decreased Y-o-Y mainly due to the disposal of Russian subsidiaries FX (SEK/KZT, EUR/SEK) 42.17, 10.92 42.05, 11.79 43.84, 11.49 • In CA, net working capital decreased Q-o-Q from 32% to 23% of LTM revenue Property, plant and equipment 1,263
Slide 34: Outlook
Outlook Uncertainty about the German economy increased during the third quarter. Although there were some signs of improvement in recent weeks, higher interest rates and inflation make customers more cautious. The market recovery seen in 2023 will likely slow down. However, we expect stronger demand
Slide 35: IN FERRONORDIC
IN FERRONORDIC