Year-end report 1 January – 30 December 2023

Q4 2023: A restart

FOURTH QUARTER 2023

  • Revenue increased by 30% to SEK 915m (705)
  • Operating profit decreased by 361% to SEK -62m (-13)
  • Operating margin decreased to -6.8% (-1.9)
  • The result for the period decreased by 329% to SEK -89m (-21)
  • Basic earnings per share* amounted to SEK -6.11 (-1.42)
  • Cash flows from operating activities amounted to SEK 147m (-48)

JANUARY - DECEMBER 2023

  • Revenue increased by 45% to SEK 2,863m (1,973)
  • Operating profit decreased by 149% to SEK -115m (233)
  • Operating margin decreased to -4.0% (11.8)
  • The result for the period decreased by 124% to SEK -107m (440)
  • Basic earnings per share* amounted to SEK -7.39 (30.28)
  • Cash flows from operating activities amounted to SEK -27m (215)
SEK m (or as stated)
2023 Q4
2022 Q4
%
2023 12M
2022 12M**
%
Revenue
2023 Q4 915
2022 Q4 705
% 30%
2023 12M 2,863
2022 12M** 1,973
% 45%
Gross profit
2023 Q4 133
2022 Q4 97
% 37%
2023 12M 377
2022 12M** 250
% 51%
Operating profit
2023 Q4 -62
2022 Q4 -13
% -361%
2023 12M -115
2022 12M** 233
% -149%
Result from continuing operations
2023 Q4 -89
2022 Q4 49
% -281%
2023 12M -107
2022 12M** 183
% -159%
Result for the period
2023 Q4 -89
2022 Q4 -21
% -329%
2023 12M -107
2022 12M** 440
% -124%
Earnings per share from continuing operations, SEK*
2023 Q4 -6.11
2022 Q4 3.38
% -281%
2023 12M -7.39
2022 12M** 12.58
% -159%
Earnings per share, SEK*
2023 Q4 -6.11
2022 Q4 -1.42
% -329%
2023 12M -7.39
2022 12M** 30.28
% -124%
Cash flow from operations
2023 Q4 147
2022 Q4 -48
%  
2023 12M -27
2022 12M** 215
%  
Net debt (cash)
2023 Q4 1,349
2022 Q4 -957
%
2023 12M 1,349
2022 12M** -957
%
Gross margin, %
2023 Q4 14.5%
2022 Q4 13.8%
% 0.8pp
2023 12M 13.2%
2022 12M** 12.7%
% 0.5pp
Operating margin, %
2023 Q4 -6.8%
2022 Q4 -1.9%
% -4.9pp
2023 12M -4.0%
2022 12M** 11.8%
% -15.8pp
Working capital/LTM Revenue, %
2023 Q4 20%
2022 Q4 11%
% 9.1pp
2023 12M 20%
2022 12M** 11%
% 9.1pp
Equity/total assets, %
2023 Q4 34%
2022 Q4 58%
% -23.8pp
2023 12M 34%
2022 12M** 58%
% -23.8pp
Return on capital employed, %
2023 Q4 -3%
2022 Q4 11%
% -13.5pp
2023 12M -3%
2022 12M** 11%
% -13.5pp
Return on equity, %
2023 Q4 -6%
2022 Q4 30%
% -35.7pp
2023 12M -6%
2022 12M** 30%
% -35.7pp

*Before dilution.

**Including the effect of a one-off compensation payment from Volvo of SEK 321m

Lars Corneliusson
Lars Corneliusson, CEO Ferronordic

Fourth quarter 2023


Q4 2023 marks a new chapter in Ferronordic's history. As of 30 November 2023, Ferronordic is present in nine states in eastern USA. The acquired operations have a long history and are profitable. We are excited about the business and the opportunities to work with our new colleagues to grow market share and further improve profitability. In December, the revenue in the US operations amounted to SEK 308m with an operating profit of SEK 25m and an operating margin of 8.0%, including SEK 11m of transaction costs.

In Germany, we had a challenging quarter and face a weaker market. Although we saw continued good demand in our workshops, we do not get sufficient returns on our organisation. We are rebalancing our business to make it better fit for the future. We are reducing administrative costs and creating a leaner organisational structure under a new leadership. Our efficiency program is expected to result in savings of approx SEK 60m per year from Q2 2024, but it cost us SEK 23m in restructuring provisions in Q4 2023. Meanwhile, long delivery lead times from suppliers and declining demand contributed to continued growth in inventory and debt during the quarter. We are taking measures to reduce inventory in H1 2024. To further increase our flexibility and free up capital, we have decided to reduce our used inventory and our rental fleet. Interest in electric trucks is however growing and we keep expanding our aftermarket business.

Q4 2023 was also challenging in Kazakhstan. Despite a strong economy, the market and our sales decreased. Aftermarket sales were more stable and our used machine sales increased. There is a lot of upside for our business in Kazakhstan.

For the Group, including one month of operations in the US, net sales increased by 30% to SEK 915m. The operating result was SEK -62m, or SEK -15m excluding the one-off costs and impairments recognized in the quarter. Mainly as a result of the acquisition in the US, the Group moved into a net debt position of SEK 1,349m. Due to the negative result, Ferronordic's Board recommends that no dividend be paid in 2024.

After a challenging and transformative 2023, we look forward with confidence to a restart in 2024. We are optimistic about our expansion to the USA and the opportunities there. The German market looks weak but we are taking measures to adapt our organisation to improve resilience and profitability. We are confident that we will emerge stronger from the current challenges and remain optimistic about the long-term potential in Germany. Our operations in Kazakhstan continue to develop, even if they will constitute a smaller part of the Group's total operations in the future.