Ferronordic decides on new financial objectives and dividend policy

Ferronordic has decided on new financial objectives and dividend policy for the Group. The new financial objectives take into consideration the long-term potential for growth, profitability and cash flows in Ferronordic’s current business profile, including its expansion to the US.

In November 2023, Ferronordic acquired Rudd Equipment Company in the US. The acquisition significantly shifted the profile of Ferronordic’s business and balance sheet. In 6M 2024, the US business contributed 62% of the Group’s revenue, while Germany and Kazakhstan made up 34% and 4% respectively. On 30 June, the US business made up 60% of the Group’s assets, while Germany and Kazakhstan made up 32% and 5% respectively. Ferronordic sees opportunities for profitable growth in its core markets.

Ferronordic’s new financial objectives reflect Ferronordic’s current business position and strategic direction in 2024-2029 on an organic¹ basis:

• Double the 2024² revenue in its current markets by 2029
• Operating margin above 6%
• Net debt/EBITDA below 3 times (over a business cycle)

Ferronordic’s financial objectives are aligned with its strategic objectives:

• Leadership in the market for construction equipment and trucks
• Geographic expansion
• Expansion into related business areas
• Development of sustainable transport services
• Industry leading digital service and sales platforms
• Aftermarket absorption³ rate of at least 1.0 x

The Board has also reviewed Ferronordic’s dividend policy. According to the new policy, the ambition for the Company should be to pay at least 50% of net income if net debt/EBITDA is less than 1.0, post dividend payment, and to pay at least 25% if net debt/EBITDA is more than 1.0. The Board will take several factors into account when proposing the level of dividend including legal requirements, the articles of association, the group’s expansion opportunities, its financial position and other investment needs.

1. Ferronordic’s 6M 2024 revenue x 2 is used as a base for growth
2. Current markets are defined as Ferronordic’s current (Q2 2024) sales area in the US, Germany and Kazakhstan. They include expansion to other brands and products and expansion of our network in and directly adjacent to our current area
3. Percentage of fixed costs covered by gross profit from the aftermarket business

About Ferronordic

Ferronordic is a service and sales company in the areas of construction equipment and trucks. It is the dealer for Volvo CE in all or parts of nine states in the United States and also represents Hitachi and Link-Belt in parts of the same area. Ferronordic is dealer of Volvo Trucks and Renault Trucks in Germany and dealer of Volvo CE and certain other brands in Kazakhstan. Ferronordic began its operations in 2010 and currently has 41 outlets and approx. 800 employees. Ferronordic’s vision is to be the leading service and sales company in its markets. The shares in Ferronordic AB (publ) are listed on Nasdaq Stockholm. www.ferronordic.com

Contact

For investors, analysts and media:

Erik Danemar, CFO and Head of Investor Relations

+46 73 660 72 31

ir@ferronordic.com

Nybrogatan 6
SE-114 34 Stockholm
+46 8 5090 7280

Corporate ID no. 556748-7953
www.ferronordic.com

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 1 October 2024, 19:15 CET.