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Ferronordic

Ferronordic

Authorised dealer of construction equipment in Russia

Ferronordic is an authorised dealer of Volvo CE, Terex, Dressta, Mecalac and Rottne in Russia and for Volvo CE and Mecalac in Kazakhstan. In parts of Russia, Ferronordic is an appointed aftermarket partner for Volvo and Renault Trucks and dealer for Volvo Penta. As of 2020, Ferronordic is also the authorised dealer for Volvo and Renault Trucks in parts of Germany. It aims to be the leading service and sales company in its markets. It is currently the only dealer in Russia, and one of few in Europe, allowing it to offer the ‘Certified Rebuild’ warranty extension on Volvo equipment following repairs and service. The company, founded in 2010, has ~100 outlets and 1,500 employees.

The underlying market for western, high-quality CE in Russia/CIS could offer high double-digit growth for several years to come due to general economic recovery, pent-up demand for at least 60,000 units and a change in purchasing behaviour from a focus on initial price to total cost of ownership. Improved operations and market share gains in Germany could generate profit. As a certified Volvo CE distributor, Ferronordic’s ability to gain market share would imply high sales potential.

Russia has historically been notorious for low transparency, poor corporate governance and corruption. Sanctions have also proven to have a significant impact on the Russian economy, which in turn could hamper the recovering market for CE. Approximately 80% of Ferronordic’s sold units are Volvo, which implies a high reliance on that relationship.

SEKm 2021 2022e 2023e
Sales 6212 4950 2940
Sales growth (%) 34 -20,3 -40,6
EBITDA 699 475 231
EBITDA margin (%) 11,2 9,6 7,9
EBIT adj 507 238 51
EBIT adj margin (%) 8,2 4,8 1,7
Pretax profit 451 176 16
EPS rep 23,33 9,4 0,88
EPS growth (%) 53 -59,7 -90,7
EPS adj 24,97 9,4 0,88
DPS 0 0 0
EV/EBITDA (x) 7,3 1,5 2,3
EV/EBIT adj (x) 10,1 3,1 10,6
P/E (x) 14,4 4,4 46,7
P/E adj (x) 13,5 4,4 46,7
EV/sales (x) 0,8 0,1 0,2
FCF yield (%) 1,8 27,3 43
Dividend yield (%) 0 0 0
Net IB debt/EBITDA 0,3 0,3 -0,2
Lease adj. FCF yield (%) 0,1 14 32
Lease adj. ND/EBITDA 0,1 -0,1 -1,3
SEKm 2021 2022e 2023e
EBITA 483 238 51
Goodwill impairment charges 0 0 0
Other impairment and amortisation 0 0 0
EBIT 483 238 51
Other financial items -5 -4 0
Net financial items -32 -62 -35
Associated income 0 0 0
Other EO items 0 0 0
Pretax profit 451 176 16
Tax -112 -40 -3
Net profit 339 137 13
Minority interest 0 0 0
Net profit discontinued 0 0 0
Net profit to shareholders 339 137 13
EPS 23,33 9,4 0,88
EPS Adj 24,97 9,4 0,88
Total extraordinary items after tax -23,8 0 0
Tax rate (%) -24,9 -22,5 -21,2
Gross margin (%) 17,9 16,7 14,7
EBITDA margin (%) 11,2 9,6 7,9
EBITA margin (%) 7,8 4,8 1,7
EBIT margin (%) 7,8 4,8 1,7
Pretax margin (%) 7,3 3,6 0,5
Net margin (%) 5,5 2,8 0,4
Growth rates Y/Y 2021 2022 2023
Sales growth (%) 34 -20,3 -40,6
EBITDA growth (%) 38,6 -32 -51,3
EBIT growth (%) 47,2 -50,7 -78,5
Net profit growth (%) 53 -59,7 -90,7
EPS growth (%) 53 -59,7 -90,7
Profitability 2021 2022 2023
ROE (%) 35,6 11,7 1
ROE Adj (%) 38 11,7 1
ROCE (%) 27,6 10 2,3
ROCE Adj(%) 29 10 2,3
ROIC (%) 34,6 13,7 3,1
ROIC Adj (%) 36,3 13,7 3,1
Adj earnings numbers 2021 2022 2023
EBITDA Adj 722 475 231
EBITDA Adj margin (%) 11,6 9,6 7,9
EBITA Adj 507 238 51
EBITA Adj margin (%) 8,2 4,8 1,7
EBIT Adj 507 238 51
EBIT Adj margin (%) 8,2 4,8 1,7
Pretax profit Adj 475 176 16
Net profit Adj 363 137 13
Net profit to shareholders Adj 363 137 13
Net Adj margin (%) 5,8 2,8 0,4
Sales 6212 4950 2940
COGS -5101 -4126 -2507
Gross profit 1111 825 432
Other operating items -412 -350 -201
EBITDA 699 475 231
Depreciation on tangibles -136 -118 -134
Depreciation on intangibles 0 0 0
Depreciation and amortisation -216 -237 -180
Of which leasing depreciation -42 -42 -44
EO items -24 0 0
Impairment and PPA amortisation 0 0 0
EBITDA lease Adj 641 396 166
EBITDA lease Adj margin (%) 10,3 8 5,7
Leasing payments -81 -79 -65
SEKm 2021 2022e 2023e
EBITDA 699 475 231
Net financial items -32 -62 -35
Paid tax -112 -40 -3
Non-cash items -74 18 0
Cash flow before change in WC 481 392 193
Change in WC -24 -64 87
Operating cash flow 457 328 279
CAPEX tangible fixed assets -239 -148 -24
CAPEX intangible fixed assets 0 -9 -2
Acquisitions and disposals -130 -9 2
Free cash flow 87 162 256
Dividend paid -109 0 0
Share issues and buybacks 0 0 0
Other non cash items -137 -19 -2
Decrease in net IB debt 613 138 262
Balance Sheet (SEKm) 2021 2022 2023
Goodwill 60 69 69
Indefinite intangible assets 0 0 0
Definite intangible assets 8 9 8
Tangible fixed assets 784 744 637
Other fixed assets 65 60 60
Fixed assets 1192 1200 1111
Inventories 1432 965 529
Receivables 581 466 295
Other current assets 0 0 0
Cash and liquid assets 768 851 1042
Total assets 3973 3482 2976
Shareholders equity 1101 1238 1250
Minority 0 0 0
Total equity 1101 1238 1250
Long-term debt 490 509 513
Pension debt 0 0 0
Convertible debt 0 0 0
Deferred tax 5 5 5
Other long-term liabilities 1 2 2
Short-term debt 317 317 317
Accounts payable 1809 1163 647
Other current liabilities 67 67 63
Total liabilities and equity 3973 3482 2976
Net IB debt 198 134 -53
Net IB debt excl. pension debt 198 134 -53
Capital invested 1307 1379 1205
Working capital 137 201 114
EV breakdown 2021 2022 2023
Market cap. diluted (m) 4897 595 595
Net IB debt Adj 198 134 -53
Market value of minority 0 0 0
Reversal of shares and participations 0 0 0
Reversal of conv. debt assumed equity 0 0 0
EV 5095 729 542
Capital efficiency (%) 2021 2022 2023
Total assets turnover (%) 188,2 132,8 91
Capital invested turnover (%) 404,9 651,3 719,1
Capital employed turnover (%) 273,2 354,5 348,8
Inventories / sales (%) 24,9 20,8 21,1
Customer advances / sales (%) 0,9 0,8 0,7
Payables / sales (%) 22,7 24,1 24,1
Working capital / sales (%) 2,8 3,4 5,4
Financial risk and debt service 2021 2022 2023
Net debt / equity (%) 18 10,8 -4,2
Net debt / market cap (%) 5,7 22,5 -8,9
Equity ratio (%) 27,7 35,5 42
Net IB debt adj. / equity (%) 18 10,8 -4,2
Current ratio (%) 123,3 141,8 171,4
EBITDA / net interest (%) 2656,3 1212 660,5
Net IB debt / EBITDA (%) 28,3 28,2 -22,8
Interest cover (%) 1836,5 607,4 146,2
Lease liability amortisation -81 -79 -65
Other intangible assets 21 22 19
Right-of-use asset 222 259 280
Total other fixed assets 105 105 105
Leasing liability 159 159 159
Total other long-term liabilities 29 29 27
Net IB debt excl. leasing 39 -25 -212
Net IB debt / EBITDA lease Adj (%) 6,1 -6,3 -127,4
SEKm 2021 2022e 2023e
Shares outstanding adj. 15 15 15
Fully diluted shares Adj 15 15 15
EPS 23,33 9,4 0,88
Dividend per share Adj 0 0 0
EPS Adj 24,97 9,4 0,88
BVPS 75,78 85,17 86,05
BVPS Adj 70,2 78,88 79,96
Net IB debt / share 13,6 9,2 -3,6
Share price 241,11 40,95 40,95
Market cap. (m) 3504 595 595
Valuation 2021 2022 2023
P/E 14,4 4,4 46,7
EV/sales 0,82 0,15 0,18
EV/EBITDA 7,3 1,5 2,3
EV/EBITA 10,5 3,1 10,6
EV/EBIT 10,5 3,1 10,6
Dividend yield (%) 0 0 0
FCF yield (%) 1,8 27,3 43
P/BVPS 4,45 0,48 0,48
P/BVPS Adj 4,8 0,52 0,51
P/E Adj 13,5 4,4 46,7
EV/EBITDA Adj 7,1 1,5 2,3
EV/EBITA Adj 10,1 3,1 10,6
EV/EBIT Adj 10,1 3,1 10,6
EV/cap. employed 2,5 0,3 0,2
Investment ratios 2021 2022 2023
Capex / sales 3,9 3,2 0,9
Capex / depreciation 137,5 80,4 19
Capex tangibles / tangible fixed assets 30,5 19,9 3,7
Capex intangibles / definite intangibles 1,9 38,2 12,1
Depreciation on intangibles / definite intangibles 0 0 0
Depreciation on tangibles / tangibles 22,2 26,2 21,3
Lease adj. FCF yield (%) 0,1 14 32

Equity research

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Media

Ferronordic - Company presentation with CFO Erik Danemar
Ferronordic - Company presentation with CFO Erik Danemar

Main shareholders - Ferronordic

Main shareholders Share capital % Voting shares % Verified
Håkan Eriksson (Skandinavkonsult) 14.5 % 14.5 % 25 Feb 2022
Lars Corneliusson 6.4 % 6.4 % 31 Mar 2022
Avanza Pension 6.3 % 6.3 % 31 Mar 2022
Per Arwidsson med närstående 3.7 % 3.7 % 31 Dec 2021
Axel Johnson Gruppen 3.6 % 3.6 % 31 Dec 2021
Investor Asset Management BVBA 2.8 % 2.8 % 31 Dec 2021
Magallanes Value Investors SGIIC 1.5 % 1.5 % 30 Apr 2022
Swedbank Robur Fonder 1.3 % 1.3 % 30 Apr 2022
Norges Bank 1.1 % 1.1 % 31 Mar 2022
PEG Capital Partners AB 1.0 % 1.0 % 31 Mar 2022
Source: Holdings by Modular Finance AB

Insider list - Ferronordic

Name Quantity Code Date
Erik Eberhardson - 7 000 SELL 16 Jul 2021
Martin Konrad Bauknecht + 1 000 BUY 3 Jun 2021
Carl Erik Mikael Danemar + 15 500 ALTM 28 May 2021
Henrik Carlborg + 15 500 SUBS 28 May 2021
JONATHAN TUBB + 12 000 ALTM 28 May 2021
Ceren Wende + 1 158 ALTM 28 May 2021
JONATHAN TUBB - 694 SELL 12 May 2021
Dan Håkan Ulf Eliasson + 630 BUY 6 Apr 2021
Henrik Carlborg + 2 201 BUY 18 Dec 2020
Dan Håkan Ulf Eliasson + 168 BUY 18 Dec 2020

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