Press Release

Year-end Report January – December 2013

24 Feb 2014


  • Revenue amounted to EUR 79.0m (67.9m)
  • Revenue increase of 16.3% Y-o-Y (27.7% in rubles)
  • Operating profit amounted to EUR 2.4m (1.5m)
  • Operating margin was 3.0% (2.2%)
  • EBITDA amounted to EUR 4.8m (4.6m)
  • Foreign exchange gains amounted to EUR 0.5m (0.4m)
  • The after-tax result amounted to EUR 1.1m (-0.5m)
  • Earnings per ordinary share amounted to EUR -0.17 (EUR -0.05)
  • Cash flow from operating activities amounted to EUR -3.9m (13.0m)


  • Revenue amounted to EUR 286.6m (275.8m)
  • Revenue increase of 3.9% Y-o-Y (10.4% in rubles)
  • Operating profit amounted to EUR 5.9m (3.1m)
  • Operating margin was 2.1% (1.1%)
  • EBITDA amounted to EUR 17.6m (13.4m)
  • Foreign exchange losses amounted to EUR -3.3m (-0.4m)
  • The after-tax result amounted to EUR -5.2m (-5.8m)
  • Earnings per ordinary share amounted to EUR -0.80 (EUR -0.58)
  • Cash flow from operating activities amounted to EUR 5.2m (16.6m)

* Comparative figures for previous year are in brackets.


  • Strong revenue growth despite flat market for construction equipment in Russia
  • Significant market share gains in key product groups
  • Decrease of financial indebtedness following successful issuance of preference share
2013 Q4
2012 Q4
2013 12M
2012 12M
2013 Q4 79.0
2012 Q4 67.9
2013 12M 286.6
2012 12M 275.8
2013 Q4 4.8
2012 Q4 4.6
2013 12M 17.6
2012 12M 13.4
Operating Profit
2013 Q4 2.4
2012 Q4 1.5
2013 12M 5.9
2012 12M 3.1
Net Debt
2013 Q4 6.7
2012 Q4 63.9
2013 12M 6.7
2012 12M 63.9
Net debt / EBITDA
2013 Q4 0.4x
2012 Q4 4.8x
2013 12M 0.4x
2012 12M 4.8x

All-time high revenue and margin expansion

Ferronordic Machine’s CEO Lars Corneliusson comments:
During 2013 Ferronordic Machines generated all-time high revenue of EUR 286.6m. Compared to 2012 this represents a 4% revenue increase in reporting currency and a 10% revenue increase in ruble terms. The total market for construction equipment in Russia has been flat for three consecutive years. Despite this, the total number of machines delivered (including machines added to the rental fleet) also reached an all-time high for the 3rd year in a row, exceeding 1,500 units.

Revenue from new machine sales amounted to EUR 201.7m, which was at the same level as the previous year (6% increase in rubles). Revenue from parts and service grew 6%. Service revenue isolated increased by 43%. This in combination with a more efficient pricing structure of machines and parts generated an increase of our gross profit margin by 1.3 percentage points during the year, from 15.2% to 16.5%.

EBITDA for 2013 was EUR 17.6m, an increase of 31% compared to an EBITDA of EUR 13.4m in 2012. We had total one-off expenses in 2013 of approximately EUR 2.4m related to the preference share issue, bond redemption, severance payments, etc. EUR 1.2m of these one-off expenses are related to the bond redemption and thus recorded as financial costs. Excluding these expenses, EBITDA was EUR 18.8m, which is 40% higher than EBITDA for 2012. The result before income tax, excluding one-off expenses, amortization of transaction related intangibles and FX losses, amounted to EUR 3.3m. Cash flow from operating activities was EUR 5.2m and cash used in investing activities was EUR -2.5m. This together with the issuance of the preference shares resulted in a net debt position at the end of the year of EUR 6.7m.

The revenue in Q4 2013 amounted to EUR 79.0m, an increase of 16% compared to the same period in 2012 (28% increase in rubles). December was the strongest month in Ferronordic’s history. We are especially pleased with the strong performance in service revenue, which was up by 36% compared to the same period in 2012. Parts sales, however, only increased by 1% compared to Q4 2012 (9% in rubles), partly due to high sales of spare parts under warranty campaigns in 2012.

Gross profit for Q4 2013 increased from EUR 12.1m to EUR 12.4m. EBITDA in Q4 2013 was EUR 4.9m (excluding one-off expenses of EUR 0.1m), which is EUR 0.3m higher than same period of 2012. The result before income tax, excluding one-off expenses, amortization of transaction related intangibles and FX losses, amounted to EUR 0.7m, compared to almost breakeven last year.

We are particularly pleased with the performance of some product groups during the year. We increased our market share for crawler excavators significantly during the year and in the fourth quarter isolated we had a market share of approximately 12%, which is twice as high as the market share we had in 2012.We are also pleased with our market share increases for articulated haulers and pavers.

In 2013, in addition to the continued growth of the Volvo CE network, we opened three service stations incorporating both Volvo CE and Volvo Trucks business in the same facilities.

During the fourth quarter we successfully raised SEK 500m in equity through a preference share issuance. The preference shares started trading on Nasdaq OMX First North Premier on December 3. We are very pleased with the strong demand in our preference share, both from new investors as well as from then existing bondholders. This signals a substantial interest and confidence in our business and a comfort in the way Ferronordic Machines has performed in Russia since the start of operations in 2010. With the capital from the preference share issue and with new investors on board, we will continue to execute our growth strategy.

During the fourth quarter, we also redeemed the remaining part of our bond loan, which significantly strengthened our balance sheet. The bonds were redeemed at 102% and we had one-off financial expenses related to the redemption of more than EUR 1.2m.

We also have seen a significant depreciation of the ruble during the year. This has negatively affected our growth in the reporting currency. The euro appreciated 12% during the year and the Swedish krona 8% against the ruble. The depreciation of the ruble has continued in 2014 and the euro strengthened 5% and the Swedish krona 7% in January 2014. Despite the turbulence surrounding the ruble and other emerging market currencies in the beginning of the year, most forecasts predict a higher economic growth rate for 2014 than was the result in 2013, and an increase in infrastructure spending. The deprecation of the ruble also have positive effects for the export industry such as oil & gas, and the mining sector, which are important customer segments for Ferronordic.

The oil price remained at high levels during most of the year, except for just a few days when the price fell below USD 100 per barrel. The average and closing price was close to USD 110 per barrel. The oil price is expected to remain above USD 100 per barrel during 2014. There is usually a strong correlation between the oil price level and the spending in the construction equipment market and, hence, our revenue generation. We continue to monitor the oil price development closely.

We have built a strong organization all over Russia with over 70 sales and/or service outlets and over 730 employees. We have an organization that is well prepared to capture the long-term growth potential which exists in the Russian market. We are looking forward to some important product launches in 2014, as well as increased production in the new Volvo excavator factory in Kaluga.

Overall, we remain cautiously optimistic as we look forward into 2014. It is however difficult to estimate the short- and medium term market development but underlying long-term market fundamentals are strong.

About Ferronordic Machines

Ferronordic Machines is the authorized dealer of Volvo Construction Equipment in Russia. The Company began its operations in June 2010 and has expanded rapidly across Russia and today is well established in all eight federal districts with more than 70 outlets and over 700 employees. In addition to distributing and providing aftermarket support to Volvo Construction Equipment machines, the Company has also been appointed aftermarket dealer for Volvo Trucks as well as dealer for Volvo Penta in certain parts of Russia. The Company has also signed up some other high quality brands such as LogSet and several attachment manufacturers. The vision of the Company is to be regarded as the leading service- and sales company in the CIS markets.

For further information please contact:

Ferronordic Machines AB
Anders Blomqvist
Chief Financial Officer
Phone: +46 70 7766 485

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