Interim report 1 January – 30 September 2022
THIRD QUARTER 2022
- Revenue decreased by -11% to SEK 1,479m (1,661)
- Operating profit increased by 206% to SEK 451m (147)
- Adjusted* operating profit decreased by -12% to SEK 130m (147)
- Adjusted* operating margin decreased to 8.8% (8.9)
- The result for the period increased by 237% to SEK 366m (109)
- Basic earnings per share amounted to SEK 25.20 (7.48)
- Cash flows from operating activities amounted to SEK 240m (327)
JANUARY - SEPTEMBER 2022
- Revenue increased by 9% to SEK 4,915m (4,517)
- Operating profit increased by 91% to SEK 706m (371)
- Adjusted* operating profit increased by 4% to SEK 385m (371)
- Adjusted* operating margin decreased to 7.8% (8.2)
- The result for the period increased by 84% to SEK 461m (251)
- Basic earnings per share amounted to SEK 31.70 (17.27)
- Cash flows from operating activities amounted to SEK 263m (538)
* “Adjusted” here and in the report refers amounts and ratios excluding the effect of the compensation payment from Volvo CE of SEK 321m.
Lars Corneliusson, CEO, comments: “Conditions for our business in Russia continue to deteriorate. We take all measures to ensure that our operations in Russia comply with applicable laws. Our business is limited in scope, but where possible, we continue to serve our customers. Facing an uncertain future, we are actively trying to divest our business in Russia. During the quarter, we agreed with Volvo CE and Sandvik to terminate our dealership agreements for Russia. From Volvo CE, a compensation of SEK 321m was paid for incurred and potential costs and losses related to the termination.
Meanwhile, we continue to develop our businesses in Kazakhstan and Germany. In the quarter, we became distributor for Sandvik mobile crushers and screens in Germany and Kazakhstan. In Germany, we are increasing our efforts to promote electric trucks from Volvo and Renault, both through our dealer business and as a rental product. In line with this effort, we received our first state subsidies for electric trucks in the quarter. In Kazakhstan, we are looking for opportunities to develop our contracting services business. We also look for opportunities to expand our operations, both in terms of new products and services and new markets.
In Germany, our new trucks sales declined by 5% in units, mainly as a result of supply constraints. By contrast, our aftermarket business grew by 42%. As a result of this shift in product mix, our gross margin increased by 3 percentage points. We need to continue to expand our service coverage and increase market shares in both trucks and service sales. In the third quarter, we started a new workshop in Aschaffenburg and signed a lease for a used trucks centre in Coswig. Total revenue in Germany grew by 10% to SEK 359m. The operating result improved by 78% to SEK -7m. We believe that we are on our way to reach a breakeven operating profit run rate in Germany by year-end.
In Germany, we continue to see strong demand for service and trucks, with supply constraints so far limiting market growth. However, the macroeconomic uncertainty will likely affect the German economy. In a longer perspective, we nonetheless believe that the underlying conditions and business opportunities in the Kazakh and German markets remain strong.”
Ferronordic is a service and sales company in the areas of construction equipment and trucks. It is dealer of Volvo Trucks, Renault Trucks and Sandvik in Germany and dealer of Volvo Construction Equipment, Mecalac and Sandvik in Kazakhstan. Ferronordic is also operating in Russia where it is dealer of Dressta and Mecalac and 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. www.ferronordic.com
For investors, analysts and media:
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 11 November 2022, 07:30 CET.
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Latest press releases
Interim report 1 January – 30 September 2023
Q3 2023: Weak operationally. Key strategically.
Ferronordic expands to the USA – acquires one of the country’s largest Volvo Construction Equipment dealers
Ferronordic has entered into an agreement to purchase Rudd Equipment Company, Inc. (“Rudd”), one of the largest dealers of Volvo CE in the United States with operations in all or parts of nine states. Ferronordic thereby takes its first step to expand into the important US market. The purchase price amounts to USD 95.0m, corresponding to 5.8 x 2022 adjusted earnings before tax. In 2022, Rudd had sales of USD 308.3m with an operating income of USD 16.5m and earnings before tax of USD 16.4m (both adjusted to IFRS). In addition, Ferronordic acquires two real properties for USD 10m, currently rented by Rudd.