Interim report 1 January – 30 June 2024

Q2 2024: Continued strength in the US

SECOND QUARTER 2024

  • Revenue increased by 62% to SEK 1,095m (674)
  • Operating profit increased by 63% to SEK -4m (-10)
  • Operating margin increased to -0.3% (-1.5)
  • The result for the period decreased by -226% to SEK -81m (64)
  • Basic earnings per share1 amounted to SEK -5.56 (4.41)
  • Cash flows from operating activities amounted to SEK 270m (40)

JANUARY - JUNE 2024

  • Revenue increased by 74% to SEK 2,267m (1,305)
  • Operating profit increased by 169% to SEK 17m (-25)
  • Operating margin increased to 0.7% (-1.9)
  • The result for the period decreased by -115% to SEK -11m (71)
  • Basic earnings per share1 amounted to SEK -0.73 (4.87)
  • Cash flows from operating activities amounted to SEK 394m (-86)
SEK m (or as stated)
2024 Q2
2023 Q2
%
2024 6M
2023 6M
%
2023 FY
Revenue
2024 Q2 1,095
2023 Q2 674
% 62%
2024 6M 2,267
2023 6M 1,305
% 74%
2023 FY 2,863
Gross profit
2024 Q2 202
2023 Q2 84
% 139%
2024 6M 433
2023 6M 169
% 156%
2023 FY 377
Operating profit
2024 Q2 -4
2023 Q2 -10
% 63%
2024 6M 17
2023 6M -25
% 169%
2023 FY -115
Result for the period
2024 Q2 -81
2023 Q2 64
% -226%
2024 6M -11
2023 6M 71
% -115%
2023 FY -107
Earnings per share, SEK*
2024 Q2 -5.56
2023 Q2 4.41
% -226%
2024 6M -0.73
2023 6M 4.87
% -115%
2023 FY -7.39
Cash flow from operations
2024 Q2 270
2023 Q2 40
%
2024 6M 394
2023 6M -86
%  
2023 FY -27
Net debt (cash)
2024 Q2 1,671
2023 Q2 -539
%
2024 6M 1,671
2023 6M -539
%  
2023 FY 1,349
Gross margin, %
2024 Q2 18.4%
2023 Q2 12.5%
% 5.9pp
2024 6M 19,1%
2023 6M 12.9%
% 6.2pp
2023 FY 13.2%
Operating margin, %
2024 Q2 -0.3%
2023 Q2 -1.5%
% 1.2pp
2024 6M 0,7%
2023 6M -1.9%
% 2.6pp
2023 FY -4.0%
Working capital/LTM Revenue, %
2024 Q2 21%
2023 Q2 20%
% 1.7pp
2024 6M 21%
2023 6M 20%
% 1.7pp
2023 FY 20%
Equity/total assets, %
2024 Q2 33%
2023 Q2 62%
% -28.4pp
2024 6M 33%
2023 6M 62%
% -28.4pp
2023 FY 34%
Return on capital employed, %
2024 Q2 -2%
2023 Q2 11%
% -12.4pp
2024 6M -2%
2023 6M 11%
% -12.4pp
2023 FY -3%
Return on equity, %
2024 Q2 -7%
2023 Q2 23%
% -30.6pp
2024 6M -7%
2023 6M 23%
% -30.6pp
2023 FY -6%

*Before dilution.

Lars Corneliusson
Lars Corneliusson, CEO Ferronordic

Second quarter 2024


“The second quarter of 2024 was mixed with continued strong performance in the US but continued challenges in our other markets.

The US operations continued to perform well. Total revenue was SEK 707m and the operating profit was SEK 51m with an operating margin of 7.3%. Equipment sales remained strong but were lower than in the first quarter 2024. Aftermarket operations were, however, stronger. During the quarter, the market for larger construction equipment in our area declined, but we delivered more machines and increased our market share. As the construction season got under way, so did the utilization of the rental fleet and the demand for service and spare parts. We spent further time with our new colleagues to learn more about the organization and the opportunities available. We had a strategy meeting with all branch managers where we exchanged ideas and shared our impression and vision for the business.

In Germany, we had a challenging quarter. In the market for new trucks, we saw the effects of increased supply and price competition from previous periods. Unit sales declined and we lost market share. On the other hand, a larger share of truck sales was rigid trucks, which typically have better aftermarket potential. Despite lower business activity, aftermarket sales were stable. We continued to implement our efficiency program and estimate that we reached our goal of saving approximately SEK 60m per year at the end of the second quarter. As a result of lower sales, inventory remains too high. The work to normalise the stock level will continue throughout 2024. At the same time, we continue to invest in electric trucks and sustainable transport. Overall, turnover decreased by 44% to SEK 332m. Operating profit decreased to SEK -27m.

In Kazakhstan, the market for construction equipment remained challenging. Our new equipment sales, measured in units, decreased to 11. The aftermarket also decreased as business activity slowed. Due to lower-than-expected sales, the stock level is too high in Kazakhstan as well. Turnover decreased to SEK 56m, or 5% of the Group's total. Operating profit decreased to SEK -1m.

For the Group, turnover increased by 62% to SEK 1,095m. Operating profit amounted to SEK -4m. Net debt increased to SEK 1,671m, mainly due to the acquisition of the American operations in November 2023.

We are optimistic about our expansion into the US and the opportunities there. Demand is supported by a dynamic economy and a significant need to upgrade the country's infrastructure. The German economy is weak and we are taking steps to make our organization more resilient. However, we believe in continued strong demand in the aftermarket business and remain optimistic about the long-term prospects in Germany. We also see long-term potential in Kazakhstan.”