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Ferronordic AB: Interim report 1 January - 31 March 2022

07:30 / 12 May 2022 Ferronordic Press release

Troubled times 

  • Revenue increased by 38% to SEK 1,746m (1,267)
  • Operating profit increased by 36% to SEK 108m (80)
  • Operating margin decreased to 6.2% (6.3)
  • The result for the period increased by 12% to SEK63m(56)
  • Basic earnings per share amounted to SEK 4.30 (3.85)
  • Cash flows from operating activities amounted to         SEK-16m (91)
  •                                     Preliminary revenue in Russia standalone in April of SEK375m. Other preliminary select financials for Russia standalone in April are disclosed on page 8 of the report

SEK m (or as stated) 2022 2021 %
Q1 Q1
Revenue 1,746 1,267 38%
Gross profit 300 215 40%
Operating profit 108 80 36%
Result for the period 63 56 12%
Result per ordinary share, SEK* 4.30 3.85 12%
Cash flow from operations -16 91
Net debt (cash) 255 -33

Gross margin, % 17.2% 17.0% 0.3pp
Operating margin, % 6.2% 6.3% -0.1pp
Working capital/LTM Revenue, % 3% 4% -0.4pp
Equity/total assets, % 32% 28% 3.7pp
Return on capital employed, % 31% 21% 9.8pp
Return on equity, % 35% 31% 4.2pp

Lars Corneliusson, President and CEO, comments: As we publish this report, the military conflict in Ukraine continues. For Ferronordic, the situation causes significant disruption and uncertainty. Some of our key partners have suspended sales and deliveries to Russia. We follow the laws and regulations that apply to our business in Russia and are working to adapt our organisation to the new circumstances. Where not affected by restrictions, we continue to service our customers and sell products from inventory or from partners that continue to deliver. If protracted however, the situation poses significant risks to our business model in Russia. Our businesses in Kazakhstan and Germany are not directly impacted by the situation. In the first quarter of 2022, total revenue for the Group increased by 38% to SEK 1,746m and the operating profit increased 36% to SEK 108m. In Russia/CIS the market was strong leading up to 24 February. Most of our sales in the first quarter 2022 mainly reflect contracts agreed in this period. Total revenue in Russia/CIS grew by 32% to SEK 1326m. The operating margin declined, mainly due to the provisions made during the quarter. The German market for heavy trucks was largely flat in the first quarter 2022. Our new trucks sales, however, increased by 66% in units and we gained further market shares. Our used trucks business more than doubled its revenue contribution and aftermarket sales grew by 36%. We began operations at a new workshop in Bad Hersfeld, filling another important gap in our growing network. We continued to market and demo electric trucks to our customers and we signed an order for two fully-electric Volvo FM trucks. Total revenue in Germany grew by 62% to SEK 420m and the operating result improved by 25% to SEK -10m. As a result of the military conflict in Ukraine, the prospects for our operations in Russia have deteriorated significantly. If the situation continues, it poses risks to our business in Russia. In Germany, we believe that a continued recovery from the pandemic will lead to increased demand for trucks and service. The geopolitical situation may however also affect the German economy and market. In a longer perspective, we nevertheless believe that the underlying conditions and business opportunities in the German market remain strong.

This information is information that Ferronordic AB (publ) is obliged to disclose pursuant to the EU Market Abuse Regulation and the Swedish Securities Market Act (2007:528). The information was submitted for publication on 12 May 2022, 07:30 CET.

Ferronordic is a service and sales company in the areas of construction equipment and trucks. It is the dealer of Volvo Construction Equipment, Sandvik Rock Processing Solutions and certain other brands in all of Russia and Kazakhstan, aftermarket partner of Volvo Trucks and Renault Trucks in part of Russia, and dealer of Volvo Trucks and Renault Trucks in part of Germany. The Company also offers contracting services where it owns and operates equipment to carry out works for customers. Ferronordic began its operations in 2010 and now has approx. 100 outlets and approx. 1,800 employees. Ferronordic's vision is to be regarded as the leading service and sales company in its markets. The shares in Ferronordic AB (publ) are listed on Nasdaq Stockholm.

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