Introduction
Table of contents
The statutory annual report comprises pages
37–52, 57–61 and 66–119.
Introduction
This is Ferronordic 3
The year in brief 4
CEO comments 5
Business model 7
Background and history 8
Vision, values and
strategic cornerstones 10
Strategic objectives 12
Value creation 13
Ferronordic as an investment 14
Market outlook & operations
Markets and driving forces 16
Germany 18
CIS 25
Sale of russian business 31
Brands 32
Digital platform 34
e-mobility 35
Sustainability
Ferronordic’s sustainability approach 37
In line with international standards 38
Transparency 39
Planet rst 40
Fair workplace 42
Sustainable offer 44
Sustainability risks 45
Outlook for 2023 46
EU Taxonomy 47
KPI index 51
The share
The Ferronordic share 54
Corporate governance
Corporate governance report 57
The Board 62
Management and auditors 64
Formal annual report
Directors’ report 66
Risks and uncertainties 69
Financial reports 71
Notes 84
Board signatures 119
Auditor’s report 120
3
FERRONORDIC ANNUAL REPORT 2022
This is Ferronordic
Ferronordic is a service and sales company operating in the areas
of trucks and construction equipment in Germany and the CIS.
The Group has 28 workshops and employs approx. 450 people in
Germany and CIS.
Germany
Since 2020, Ferronordic is a dealer of Volvo and
Renault Trucks in parts of Germany and is re-
sponsible for sales, service and repairs of Sandvik
mobile crushers and screens in most of the country.
Ferronordic’s sales area covers approx. 20 percent
of the total German truck market and includes large
commercial hubs such as Frankfurt and Hannover,
as well as fast-growing cities in the east part of the
country, such as Dresden and Leipzig.
CIS
The CIS segment currently consists of Kazakhstan.
Ferronordic is the dealer of Volvo Construction Equip-
ment and Mecalac. The Company is also responsible
for sales, service and repairs of Sandvik mobile crushers
and screens throughout the country.
Contracting services
In addition to service, sales and rental, Ferronordic
offers contracting services, where the Company owns
and operates machines or trucks to provide efficient
and sustainable transport solutions to its customers.
Ferronordic has, for example, worked in the mining
industry to excavate and transport overburden or
rock for customers. Ferronordic is paid based on the
amount and distance of earth and rock transported.
Ferronordic sees great potential in employing electric
trucks to deliver sustainable transport services.
Headquarters in Stockholm, Sweden
Ferronordic started its business in 2010 and is head-
quartered in Stockholm. The shares in Ferronordic AB
(publ) are listed on Nasdaq Stockholm since 2017.
Introduction
This is Ferronordic
The year in brief
CEO comments
Business model
Background and history
Vision, values and
strategic cornerstones
Strategic objectives
Value creation
Ferronordic as an investment
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual reportIntroduction
4
FERRONORDIC ANNUAL REPORT 2022
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual reportIntroduction
The year in brief
2022 2021 %
New units sold, SEK m 1,052 854 23
Revenue, SEK m 1,973 1,511 31
Growth, % 31 40 -9pp
EBITDA adjusted, SEK m 1 -52 102
EBITDA margin adjusted, % 0 -3 3pp
Operating profit, SEK m 247 -112 321
Operating margin, % 13 -7 20pp
Operating profit adjusted, SEK m -74 -112 34
Operating margin adjusted, % -4 -7 4pp
Result per share after full dilution, SEK 30.28 23.26 30
Net debt/(Net cash), SEK m -957 198 -583
Return on capital employed, % 11 29 -19pp
Working capital/Revenue, % 11 2 9pp
Total assets, SEK m 3,217 3,973 -19
Equity/total assets, % 58 28 31pp
CIS
• New workshop opened in Astana with focus on
road construction.
• Reorganisation to better reflect industry seg-
mentation and further drive customer orientation.
• Organised resources to manage contracting
services in Kazakhstan.
• Dealer for Sandvik mobile crushers and
screens in all of Kazakhstan.
• Sales of construction equipment in units
increased by 11% in a market that increased
by 25%.
• Strong growth in used equipment.
• Aftermarket sales increased by 30%, partly
on better market penetration.
• Total revenue increased by 42% to
SEK 203m (143).
• Operating profit increased by 21% to
SEK 16m (13) with an improving trend
through 2022.
• Operating margin declined to 7.6% (8.9),
partly due to greater overhead costs.
4
Group
• Ferronordic divested its Russian business at end of
2022 for a sales price of SEK 1,334m.
• Net sales proceeds of SEK 1,097m from the sale
brought the Group to a net cash position of SEK 957m
at year-end 2022.
• Key Group functions relocated to offices outside Russia.
• Further development of our businesses in Germany
and Kazakhstan.
• Continued focus on a sustainable offer to our customers.
• Total revenue for the continuing Group increased by
31% to SEK 705m (475).
• The operating result for the continuing Group was
SEK 247m.
• The adjusted
1
operating result for the continuing Group
was SEK -74m.
• The Board recommends a dividend of SEK 7.5/share.
1
“Adjusted” here and in the rest of this report means excluding the
effect of the compensation payment from Volvo of SEK 321m.
Germany
• Greenfield service and sales hub project in Hannover
completed in Q4 2022.
• New centre and workshop for used trucks opened in
Coswig.
• Three additional workshop acquisitions announced.
• Total network of 20 workshops at year end.
• Further investments to promote electric trucks and
sustainable transport solutions.
• Dealer for Sandvik mobile crushers and screens in
most of Germany.
• Continued investments in organisation and infrastructure.
• Sales of trucks in units increased by 24% in a market
that increased by 4%.
• Aftermarket sales increased by 31% on a mix of organic
and acquired growth.
• Total revenue increased by 29% to SEK 1,770m (1,368).
• Operating profit increased by 55% to SEK -32m (-71).
• Operating margin increased to -1.8% (-5.2) as operating
margin improved through 2022.
• Reached a breakeven pace for operating profit by end
of 2022.
Introduction
This is Ferronordic
The year in brief
CEO comments
Business model
Background and history
Vision, values and
strategic cornerstones
Strategic objectives
Value creation
Ferronordic as an investment
5
FERRONORDIC ÅRSREDOVISNING 2022
CEO comments
2022 was a challenging year that changed Ferronordic fundamentally. As a result of the conflict in Ukraine,
we had to direct significant attention and efforts at separating the Russian operations and preparing them
for divestment. Despite considerable difficulties, we managed to sell our Russian subsidiaries. Meanwhile,
we continued to develop our businesses in Germany and Kazakhstan. In Germany we invested further
into our network and organisation. We also increased our efforts to promote electric trucks and sustainable
transport solutions. As a result, we achieved higher market shares, a stronger aftermarket business and
an improved operating margin. In Kazakhstan, we expanded our workshop coverage and continued to
work towards closer customer orientation and integration. In 2023, we look forward to committing our full
focus and energy to these businesses and to developing new opportunities for the Group.
Sale of the Russian business
During the year, we worked hard to isolate the
Russian operations from the rest of the Group and
to divest the business. In December, we managed to
sell our Russian subsidiaries for a price close to the
net asset value. Under the current circumstances, this
was an achievement. Managing and ultimately selling
the business took tremendous efforts in 2022. All our
time and energy can now be spent on developing the
businesses in Germany and Kazakhstan and focusing
on new markets and products.
Germany
In 2022, we continued to invest in our network and
organisation. We completed construction of our new
service and sales hub in Hannover. We also opened
a new centre for used trucks in Coswig. We started
operations in Bad Hersfeld and Aschaffenburg. With
the acquisition of a workshop in Peine, where opera-
tions started in 2023, we now have 21 workshops in
our German network. We set up a separate company
to focus on electric trucks and sustainable transport
solutions. This is an area that is of strategic impor-
tance and one that we work closely with our partners
and customers to develop. In 2022, we became dealer
Introduction
This is Ferronordic
The year in brief
CEO comments
Business model
Background and history
Vision, values and
strategic cornerstones
Strategic objectives
Value creation
Ferronordic as an investment
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual reportIntroduction
6
FERRONORDIC ANNUAL REPORT 2022
for Sandvik mobile crushers and screens in most of Germany. During the fourth
quarter 2022, we set up the parts warehouse and service organisation for Sandvik.
We also continued to develop our organisation in Germany, partly to service Sandvik
machines and support e-mobility.
In 2022, our sales of trucks in units increased by 24 percent in a market that
increased by 4 percent, and we took market shares. Aftermarket sales increased
by 31 percent on a mix of organic and acquired growth. Total revenue increased
by 29 percent to SEK 1,770m (1,368). Operating profit improved 55 percent to
SEK -32m (-71) as operating margin improved through 2022. We hit breakeven
pace for operating profit by end of 2022 and expect to reach a positive operating
result and positive operating cash flow in 2023.
Kazakhstan
In Kazakhstan, we opened a new workshop in Astana with focus on road con-
struction. We changed our organisation to better reflect industry segmentation and
further drive customer orientation. We became dealer for Sandvik mobile crushers
and screens in all of Kazakhstan and made the related changes to our organisation.
We are excited about this cooperation with Sandvik and the opportunities it brings
in both Germany and Kazakhstan. We also built the organisational capacity to offer
contracting services in Kazakhstan.
Our sales of construction equipment in units increased by 11 percent in a
market that increased by 25 percent. Meanwhile, we saw strong growth in used
equipment sales. Aftermarket sales increased by 30 percent, partly on better
market penetration. Total revenue increased by 42 percent to SEK 203m (143).
Operating profit increased by 21 percent to SEK 16m (13) with an improving trend
through 2022. The operating margin declined to 7.6 percent (8.9), partly due to
greater overheads, which we expect to deliver greater scale in 2023 and beyond.
Outlook
Following the sale of the Russian business, we look into the future with renewed
optimism. Despite concerns about a weaker economy, we see resilient demand
for service and trucks in Germany. Supply constraints continue to limit market
growth. Our sales area is at the heart of Europe’s transport business and benefits
from commercial activity across industries. We also see growing interest in electric
trucks and sustainable transport solutions. Our operations in Kazakhstan continue
to develop and we actively seek opportunities to grow our product and business
portfolio, including contracting services. Demand for construction equipment is
supported by Kazakhstan’s growing role as a regional hub, its big infrastructure
projects and strong commodity prices. In a longer perspective, we believe that the
underlying conditions and business opportunities in the German and Kazakh
markets are strong. We also actively look for new growth opportunities for
Ferronordic.
Lars Corneliusson
CEO and President
In 2023, we look forward to committing our
full focus and energy to our German and
Kazakh businesses and to developing new
opportunities for the Group.
”
”
Introduction
This is Ferronordic
The year in brief
CEO comments
Business model
Background and history
Vision, values and
strategic cornerstones
Strategic objectives
Value creation
Ferronordic as an investment
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual reportIntroduction
7
FERRONORDIC ANNUAL REPORT 2022
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual reportIntroduction
Business model
Ferronordic is a service and sales company operating in the areas of trucks and construction equipment.
The business consists of selling, repairing and maintaining trucks, construction equipment, engines and
attachments. In addition, Ferronordic provides consultancy services such as machine operator training
and offers contracting services and sustainable transport solutions. The vision of Ferronordic is to help
its customers achieve industry leadership through an outstanding team, a strong brand portfolio and
customer-focused solutions.
Ferronordic’s business delivers value through four main types of customer business
relationships, where the trend and strategic direction is to move towards closer
integration with the customer. This translates into a growing commitment in terms
of service and aftermarket coverage, expertise and capital investment. This
commitment places increasing demands on customer understanding and financial
strength, but also allows for higher margins. For the customer, this trend leads to
higher operational reliability and productivity, and thus more stable revenues and
stronger margins. It also allows for higher safety, lower emissions and greater
financial flexibility. The business model is scalable and can be applied in different
industries and geographic markets.
The customer buys a truck
or machine as well as
service and spare parts if
needed.
The customer buys a truck
or machine as well as on-
going service according to
an agreed bespoke main-
tenance plan.
The customer rents a truck
or machine with or without
an operator and commits to
ongoing service according to
an agreed bespoke main-
tenance plan.
The customer purchases
a service performed by
Ferronordic. Ferronordic is
responsible for equipment,
operators, service and
maintenance.
Revenue from truck or
machine, service and
spare parts.
Revenue from truck or
machine, contracted
service and spare parts.
Rent for machine and possibly
for contracted operator, related
service and spare parts.
Remuneration for work
performed, mainly based on
the amount and distance of
earth and rock transported.
Truck and machine service,
sales and aftermarket
Truck and machine sales
with service agreement
Rental of truck and machine
with or without operator
Contracting services
Business
arrangement
Ferronordic’s
revenue
Description
Introduction
This is Ferronordic
The year in brief
CEO comments
Business model
Background and history
Vision, values and
strategic cornerstones
Strategic objectives
Value creation
Ferronordic as an investment
8
FERRONORDIC ANNUAL REPORT 2022
Background and history
Ferronordic was founded in June 2010 when the Company acquired Volvo Construction Equipment’s
distribution business in Russia. At the time, the Company had six workshops and 160 employees.
By 2019, the business had grown to 90 workshops and approx. 1,300 employees. Over this period,
Ferronordic also broadened its product portfolio and expanded its contracting services operations. In
2019, Ferronordic expanded to Kazakhstan and in 2020 to Germany. Following the conflict in Ukraine in
2022, Ferronordic sold its Russian business and exited the Russian market. Ferronordic currently has
28 workshops and approx. 450 employees.
Phase I 2010–2013
Building the business
• Development of organisation, infrastructure and processes.
• Investments in marketing, training and growing market shares.
• Establishment of the first workshop for Volvo and Renault trucks in 2012.
• Issuance and listing of preference shares on Nasdaq First North Premier in
October 2013.
At the end of 2013, the operations consisted of 75 facilities and more than
700 employees.
Phase II 2014–2016
Managing the downturn and building resilience
• The Russian market declined by 83% during 2014– 2015 and the Russian ruble
was severely weakened due to sanctions and sharply falling oil prices.
• Sales sharply declined but maintained operating profit.
• Network optimisation and adaptation of organisation and business model. In-
creased focus on aftermarket and cost savings to increase the coverage ratio.
• Expansion of the product offering contributed to a greater degree of utilisation of
existing investments.
• official dealer of Terex Trucks 2014.
• agreement with Dressta and Rottne 2016.
• Launch of contracting services in 2014.
• Expanded aftermarket operations for Volvo Trucks and Renault Trucks.
At the end of 2016, the operations consisted of 69 facilities and more than
800 employees.
Ferronordic‘s history
started in June 2010, when
the Group took over the
construction equipment
distribution business from
Volvo CE in Russia. At the
time, the business had
six facilities and approx.
160 employees
Establishment of the
first workshop for
Volvo Trucks and
Renault Trucks.
Issuance and listing
of preference shares
on Nasdaq First North
Premier.
Launch of
contracting
services.
Ferronordic has a network
of 69 facilities and more
than 800 employees.
2010 2011 2012 2013 2014 2015 2016
Introduction
This is Ferronordic
The year in brief
CEO comments
Business model
Background and history
Vision, values and
strategic cornerstones
Strategic objectives
Value creation
Ferronordic as an investment
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual reportIntroduction
9
FERRONORDIC ANNUAL REPORT 2022
Phase IV 2022–
Refocusing resources
• Ferronordic sells and exits its Russian business in the end of 2022, receiving
SEK 1,090m (EUR 99m).
• Ferronordic becomes official distributor for Sandvik mobile crushers and screens
in Germany and Kazakhstan in 2022.
• Further expansion of network in Germany by acquiring and opening workshops in
Bingen, Peine, Coswig and Bad Hersfeld during 2022.
• Investment in electric trucks, infrastructure and organisation to deliver sustainable
transport solutions, starting in Germany.
• Active search for opportunities to expand business to new markets.
At the end of 2022, the operations consisted of 28 facilities and approximately
450 employees.
Phase III 2017–2021
Leveraging the platform
• Official dealer for Mecalac in Russia in 2017.
• Development of a proprietary digital sales and service platform.
• Listing of ordinary shares on Nasdaq Stockholm at the end of 2017.
• Growth in the contracting services business.
• In 2019, Ferronordic took over the import of machines and spare parts to Russia
and Kazakhstan for Volvo CE.
• Geographical expansion.
• authorised dealer for Volvo CE and Mecalac in Kazakhstan in January 2019.
• authorised dealer for Volvo Trucks and Renault Trucks in approximately
20% of the German market in January 2020.
• Establishment of a centre for machine and component rebuild in Russia in December
2019.
• Appointed dealer for Sandvik stationary and mobile crushers and screens in Russia
in 2021.
• Expansion of networks and investments in organisations in Kazakhstan and Germany.
At the end of 2021, the operations consisted of 109 facilities and approximately
1,800 employees.
Authorised dealer for Volvo
Trucks and Renault Trucks in
approx. 20% of the German
market in January 2020.
Listing on Nasdaq
Stockholm.
Authorised dealer for
Volvo CE and Mecalac
in Kazakhstan.
Investment in electric trucks,
infrastructure and organisation
to deliver sustainable transport
solutions.
2017 2018 2019 2020 2021 2022
Ferronordic becomes
distributor for Sandvik
mobile crushers and
screens in Germany
and Kazakhstan
2023
Ferronordic
sells its Russian
business,
receiving
SEK 1,090m
(EUR 99m)
Introduction
This is Ferronordic
The year in brief
CEO comments
Business model
Background and history
Vision, values and
strategic cornerstones
Strategic objectives
Value creation
Ferronordic as an investment
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual reportIntroduction
10
FERRONORDIC ANNUAL REPORT 2022
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual reportIntroduction
Vision, values and strategic cornerstones
Vision
To be the leading service and sales company in our markets.
Mission
To support the growth and leadership of our customers.
Values and principles
Ferronordic’s core values are quality, excellence and respect.
These values guide the Company when interacting with custom-
ers, partners, suppliers and each other. They define Ferronordic
and govern how the Company deploys resources and how it
delivers services and products to its customers.
Quality
Ferronordic values long-term relationships with its customers and
partners. This requires a consistent focus on quality in services,
products and relationships. The Company lives up to its commit-
ments and strives to exceed expectations in everything it does.
Excellence
Ferronordic’s people are passionate specialists and experts who
strive for excellence in creating value for customers and partners.
Ferronordic is continuously seeking ways to improve its processes
and products to deliver a superior customer experience.
Respect
Ferronordic wants a fair and open relationship between its own team
members and with its customers, suppliers and the communities
the Company operates within. The Company and its employees
are open minded and tolerant. Ferronordic sees strength in
diversity and promotes equal opportunities for all - regardless of
gender, ethnic and religious backgrounds, or disabilities.
Offer
Feronordic’s offer is based on a broad experience in its industry
and in solving the challenges its customers face in their opera-
tions. The offer is built on excellent service, top quality products, a
well-developed infrastructure and a dense network of workshops.
The offer also extends to more bespoke customer solutions, such
as contracting services and sustainable transport.
Vision
Mission
Values & operating principles
Our offer
Strategic cornerstones
Ferronordic has a vision that the Company strives towards and a mission that underpins its daily opera-
tions. A clear picture of who we are, where we are going and the values that lead us creates conditions
for business success while ensuring ethical and sustainable business practices.
Introduction
This is Ferronordic
The year in brief
CEO comments
Business model
Background and history
Vision, values and
strategic cornerstones
Strategic objectives
Value creation
Ferronordic as an investment
11
FERRONORDIC ANNUAL REPORT 2022
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual reportIntroduction
Strategic cornerstones
Ferronordic’s strategic cornerstones are the principles for the Company to achieve its strategic objectives. The cornerstones
reflect Ferronordic’s values and guide its employees in their daily work.
Strategic cornerstones
Great
team
Ferronordic’s success
is based on a strong
team working towards
common goals. Working
for Ferronordic means
taking the initiative
and making decisions,
regardless of rank or
position. The Company’s
employees are not afraid
to make mistakes but
see it as part of learning
and growing. Ferronordic
openly addresses prob-
lems and always strives
to be part of the solution.
The team is fast-paced,
dynamic and determined
to create value for its
customers. Every em-
ployee understands that
mutual trust, dialogue
and openness are the
best ways to improve
results and move the
business forward.
Operational
excellence
At Ferronordic, em-
ployees have a quality
mindset and a focus on
continuous improve-
ments. The Company’s
employees welcome and
drive change, are flexible
and agile and always
strive to improve its
services and products for
the benefit of both cus-
tomers and environment.
Ferronordic invests in the
latest technologies and
develops new solutions.
The Company strives
towards economic and
ecological sustainability
and to contribute to a
circular economy.
Building on
strong brands
Ferronordic collaborates
with world-leading
suppliers of trucks and
construction equipment.
The Company offers
premium products of
uncompromising quality,
world-class comfort,
maximum efficiency,
highest safety and
minimum environmental
impact. Each brand has
a leading position in its
segment, which Ferro-
nordic contributes to
developing and strength-
ening. The brands and
products complement
each other, which means
that Ferronordic can
deliver both broad and
customised solutions to
its customers.
Customer
orientation
Ferronordic’s mission
is to support its cus-
tomers’ growth and
leading positions in their
industries and markets.
The Company does this
by developing products
and business solutions
based on each cus-
tomer´s unique needs,
which leads to increased
productivity, greater
flexibility and higher cost
efficiency. Ferronordic is
keen to establish close
collaborations, deliver
high-quality services
and products as well as
offer customised and
tailor-made solutions.
Superior
infrastructure
Ferronordic cares about
its customers, their
productivity, efficiency
and the safety of their
employees. The
Company’s offering and
value creation is based
on providing professional
services and solutions
whenever and wherever
the customers need it.
A prerequisite for this
is Ferronordic’s dense
network of 28 facilities in
Germany and the CIS,
some of which are on
site at the operations
of the customers. The
Company’s mechanics
also travel to customers’
facilities to minimise the
risk of any downtime.
Introduction
This is Ferronordic
The year in brief
CEO comments
Business model
Background and history
Vision, values and
strategic cornerstones
Strategic objectives
Value creation
Ferronordic as an investment
12
FERRONORDIC ANNUAL REPORT 2022
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual reportIntroduction
Strategic objectives
Ferronordic currently operates in two geographical markets. After leaving Russia in 2022, the Company
is now active in Germany and Kazakhstan. The Company represents several leading manufacturers. In
addition to Volvo, Ferronordic also cooperates with Sandvik and Mecalac. Ferronordic has also developed
vertically by expanding its rental and used businesses and offering contracting services and sustainable
transport solutions.
Strategic goals
Ferronordic’s strategic objectives capture how
Ferronordic wants to grow and create value for all its
stakeholders.
Leadership in the markets for trucks
and construction equipment
Ferronordic’s success is based on successful customers.
For customers to become leaders in their industries,
Ferronordic’s offer must be industry-leading in terms
of performance, competence and products.
Aftermarket absorption rate of 1.0 x
An aftermarket absorption rate of 1 refers to the
dealer business and means that the gross profit from
the aftermarket business covers all Ferronordic’s fixed
costs. This means that Ferronordic is more financially
resilient in economic downturns with low or no sales
of new machines.
Expansion to related business areas
Ferronordic is building a well-developed service net-
work, a strong organisation, a digital sales system and
tailored integrated and sustainable transport solutions.
This platform can be used to take on new brands
and business models, which results in better capacity
utilisation, higher returns on investment and increased
value for Ferronordic’s partners and customers. In
2020, Ferronordic became dealer for Volvo Trucks
and Renault Trucks in parts of Germany. In 2022,
Ferronordic became dealer for Sandvik mobile crushers
and screens in Kazakhstan and Germany.
Development of contracting services
In contracting services, Ferronordic integrates
more closely with its customers. Instead of selling a
machine or a truck to a mining or transport customer,
Ferronordic owns, services and operates the equip-
ment on behalf of the customer. The customer pays
per cubic meter or kilometer in a transport-as-a-service
model. For the customer, this means that costs are
made more predictable and that some operating and
asset risks are transferred to Ferronordic. Mean-
while, Ferronordic can operate the equipment more
efficiently and also use experience from other areas of
its business. Ferronordic believes that contracting
services is an important part of the future of the
industry and intends to further develop this part of the
business. Ferronordic had a significant contracting
services business in Russia. The Company is looking
for opportunities to offer this type of service in Germany
and Kazakhstan also.
Industry-leading digital
service and sales platforms
To further support its service and sales organisation
and its customers, Ferronordic has developed a
digital platform. This platform converts signals from
the machines’ so-called telematics systems into infor-
mation about the operational status and conditions of
the machines. This information is disseminated to the
relevant customer service or salesperson in Ferronor-
dic’s CRM system, which in turn allows Ferronordic
to anticipate and prevent problems. Ferronordic’s
digital platform is operational in the CIS. Ferronordic
will continue to invest in the digitalisation of its sales
to further develop and apply the logic in Germany and
potential future markets.
Geographical expansion
Russia was a demanding and difficult market. The
know-how and the experiences accumulated in this
market can be employed in other markets. This expe-
rience allowed Ferronordic to expand to Kazakhstan
in 2019. Ferronordic has built further institutional
knowledge since it entered the German trucks market
with Volvo Trucks and Renault Trucks in 2020. Ferro-
nordic sees opportunities to leverage its organisation
and network infrastructure to offer complementary
products and services for new brands or to expand its
product offering into new markets. Ferronordic contin-
uously explores such strategic opportunities.
Introduction
This is Ferronordic
The year in brief
CEO comments
Business model
Background and history
Vision, values and
strategic cornerstones
Strategic objectives
Value creation
Ferronordic as an investment
13
FERRONORDIC ANNUAL REPORT 2022
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual reportIntroduction
Trust capital
Relationships with 859 customers
and partners, as well as suppliers
and decision makers.
Intellectual capital
Solution-oriented and performance-
driven organisation working closely
with world-leading partners, strong
suppliers and quality demanding
customers. A unique digital sales
and service platform that gener-
ates sales leads and concrete
proposals to customers based on
data from the connected machines
and trucks.
Manufactured capital
A truck and machine fleet with a
value of SEK 254m for rental or
use in contracting services.
A network of 28 service workshops
at a value of SEK 230m.
Human capital
457 employees with extensive
experience, strong customer
focus, excellent teamwork, and
both broad and deep collective
competence.
Financial capital
SEK 2,604m in invested capital
from customers, shareholders and
credit institutions.
The business model consists of
four types of business approaches
where the development is moving
towards an increasing integration
with the customers’ operations
and a growing commitment in
terms of service, aftermarket,
capital and employees.
This puts demands on financial
strength and a high degree of
staff and parts availability, while
at the same time leading to higher
margins. For the customer, this
development results in increased
predictability, higher operational
reliability, and thus more secure
revenues.
For shareholders
Market capitalisation and dividends.
For the society
Opportunity to build infrastructure,
extract raw materials and transport
goods, i.e. activities that are crucial
for modern society. A business
model that leads to the application
of efficient technologies, battery
electric vehicles and the recycling
of resources, which minimises
the environmental footprint of our
customers.
Jobs and tax revenues.
For customers
High-quality and efficient trucks,
machines and related services
that make it possible to conduct
their business sustainably with the
highest productivity, minimum emis-
sions, minimal resource waste and
without interruptions in profitability.
Business development in collabora-
tion with customers and partners.
For employees
Personal growth and professional
development.
Competitive salary.
For financiers and suppliers
Attractive returns, growing market
shares and margins to continue to
develop their products.
For shareholders
SEK 1,090m extracted from the sale of the
Russian business.
SEK 39m improvement in operating profit in
Germany.
For the society
SEK 75m in taxes paid. 457 jobs.
For customers
992 trucks sold.
60 machines sold.
31 million cubic metres transported earth and
rock¹.
For employees
98 more jobs in Germany and 6 in Kazakhstan.
57,227 hours of training (of which 42,422 in
Russia).
SEK 352m in salaries paid and other remu-
neration.
For financiers
SEK 19m in interest and other finance costs.
For partners and suppliers
SEK 1,633m in payments to suppliers.
Increase of market share in the trucks market
in Germany.
Further investment in brand awareness and
new product (eg. electric trucks in Germany)
positioning.
Value creation
Resources Business model Value creation Created value 2022
1
Refers to contracting services in discontinued Russian business.
Introduction
This is Ferronordic
The year in brief
CEO comments
Business model
Background and history
Vision, values and
strategic cornerstones
Strategic objectives
Value creation
Ferronordic as an investment
14
FERRONORDIC ANNUAL REPORT 2022
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual reportIntroduction
Ferronordic as an investment
Strong brand portfolio
Ferronordic’s relationships with world-leading manufacturers of trucks and construction equipment provide the Group with a platform from which to
offer premium services and products to customers. By developing these relationships and complementing them with other strong brands, Ferronordic
can develop its customer offering and grow based on its existing organisation and infrastructure.
1
Robust business model and experienced management
Ferronordic’s business model is based on a strong team and a solid aftermarket business. The model has been tested and has shown the ability to
withstand extreme market fluctuations. High absorption from the aftermarket business provides resilience. Continued service development - such as
contracting services and sustainable transport solutions - aims to diversify the business model and increase integration with customers. Ferronordic
has a management team and a Board with extensive experience within the industry and markets.
2
Innovation for increased customer value
The world is changing rapidly. Ferronordic wants to be a leader and drive the development of its markets. The Company’s own digital sales and service
platform creates value throughout the entire value chain. Through contracting services, Ferronordic has built a business model where the Company
becomes an integrated part of the customers’ activities and helps them to achieve leadership in their respective industries. Through electric rental
and services, Ferronordic wants to promote sustainable transport solutions and help our customers reduce their environmental footprint.
3
Sustainability - a part of the business
Ferronordic strives to help its customers achieve leadership in the broadest sense, including by reducing their emissions and resource waste. The
Company aims to be an active player in local communities and a good and fair employer that offers its employees training, professional development
and career oppor tunities. Ferronordic promotes diversity and equal opportunities. The Company strives to contribute to a cleaner environment and be
a positive force in the transition to a sustainable society.
4
Conservative financial policy and potential for good returns
To ensure financial flexibility and strength, Ferronordic strives to maintain a strong balance sheet. The Company has historically delivered a strong
cash flow over time, which provided opportunities for both reinvestments with good returns and dividends to shareholders. Following the sale of its
business in Russia, Ferronordic will seek to redeploy proceeds from the sale to further develop its German and Kazakh businesses, but also to grow
into new markets. Ferronordic’s financial objectives are under review and will partly depend on where and when the Company will invest in its next growth
opportunity.
5
Introduction
This is Ferronordic
The year in brief
CEO comments
Business model
Background and history
Vision, values and
strategic cornerstones
Strategic objectives
Value creation
Ferronordic as an investment
Introduction
16
FERRONORDIC ANNUAL REPORT 2022
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual report
Markets and driving forces
The world’s population is steadily growing, and more people are moving to cities. At the same time, the
volume of world trade continues to increase. This, in turn, is increasing the demand for raw materials,
transport, infrastructure and buildings - industries in which Ferronordic and its customers operate. The
big challenge lies in meeting today’s needs without compromising future generations’ opportunities to
meet theirs. A large part of the solution can be found in increased efficiency and productivity, digitalisation,
electrification and circular economy.
Growing demands
• Raw materials
• Transports
• Infrastructure
• Buildings
The challenge
• Stress on the environ-
ment, climate and
societies
The solutions
• Digitalisation
• Electrification
• Circular economy
Basic trends
• Population growth and
urbanisation
• Globalisation
• Growing prosperity and
consumption
Basic trends
Population growth and urbanisation
We are over 8 billion people on earth today. In 2030, the world’s population is
estimated to amount to 8.5 billion. 70 percent of these people are expected to live
in cities, which means a continued urbanisation process.
Globalisation
Countries in the world are increasingly closely connected in a network of distribution
and communication chains. International trade continues to increase, and volumes
remain at high levels. While the current geopolitical tension may slow this trade down
in the short-run, Ferronordic believes the long-term trend is firm.
Growing prosperity
According to the IMF, the global economy is estimated to have grown by 3.4 per-
cent 2022. This means that we are back on the growth curve that prevailed before
the pandemic. Global growth tends to bring global trade, which in turn, tends to
increase the need for transport solutions. Going forward, such transport will need
to be sustainable for the planet to bear the pressure from global growth.
Growing demands
Raw materials
Commodity prices have risen sharply in recent years. Demand is driven by a growing
population, increased prosperity and technological development.
Transports
The basic trends all lead to an increased need for transport, both within and between
countries.
Infrastructure
Increased demand for transport leads to an increased need for investments in
infrastructure. In addition, many countries have not maintained their infrastructure
effectively and have a pent-up demand for investment.
Buildings
With more people, growing prosperity and urbanisation comes increased demand
for housing, factories, schools and other buildings.
Market outlook & operations
Markets and driving forces
Germany
CIS
Sale of russian business
Brands
Digital platform
e-mobility
17
FERRONORDIC ANNUAL REPORT 2022
The challenge
The big, global challenge is to meet the growing
demand for raw materials, transports, infrastruc-
ture and buildings without compromising future
generations’ ability to meet their needs. Sustain-
ability has therefore become a leading considera-
tion and driving factor when it comes to innovation
and development of transport technology, services
and products.
The solutions
Digitalisation
By 2030, 90 percent of the world’s population is
estimated to have access to the Internet. At the
same time, more and more machines, trucks,
houses and other installations are connected
digitally through what is referred to as the internet
of things. This connectivity creates opportunities
to harvest the data from people and machines to
analyse consumption, utilisation and application.
This, in turn, can be used to improve productivity,
reduce resource consumption and minimise wear
and tear in order for the equipment to last longer.
Electrification
One of the most critical challenges in sustaina-
bility is climate change and the need to reduce
our use of fossil fuels. Part of the solution to this
challenge is fuel efficiency and the electrification
of trucks and construction equipment. Digitalisation
and electrification also create new business
opportunities where Ferronordic can take on more
operational responsibility and offer tailor-made
solutions with greater shares of electric and
autonomous systems.
Circular economy
The circular economy is based on the idea of
utilising everything that is manufactured and
consumed for as long as possible. When ma-
chines and components are worn down, they are
recycled and rebuilt as much as possible and as
many times as possible. This means that there is
a need to maintain, repair, reuse, remanufacture
and recycle trucks, construction equipment and
parts with maximum efficiency to minimise overall
resource waste.
Market outlook & operations
Markets and driving forces
Germany
CIS
Sale of russian business
Brands
Digital platform
e-mobility
Introduction
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual report
18
FERRONORDIC ANNUAL REPORT 2022
Introduction
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual report
Germany
Germany is Europe’s largest economy and among the five largest economies in the world. Germany
accounts for 25 percent of Europe’s GDP (EU-27) and for 19 percent of the total EU population. The
country is one of the world’s leading exporters with vehicles, machinery, chemicals, electronics and
pharmaceuticals as the largest export goods. In addition to its size, the German economy is charac-
terised by a very high degree of maturity and diversification. The service sector accounts for approx.
70 percent of the total economy.
Resilience despite volatile conditions
The German economy grew by 1.8 percent in 2022 according to official German
sources. Despite high inflation, growth was supported by the boost in demand that
followed the post-pandemic reopening of the economy, in particular in services.
Analysts project a slight GDP growth of 0.1-0.2 percent in 2023, driven by an
easing of energy price inflation, strong order books and a gradual recovery in
supply chains but pressured by higher producer costs, weaker growth in foreign
demand and higher financing costs. A gradual economic rebound is expected
from 2024 when the growth is anticipated at 1.3-1.4 percent. In 2022, inflation was
record-high at 8.7 percent (3.1 percent in 2021). Inflation is however expected to
moderate to 7.2 percent in 2023.
Economic and political development
Motor vehicles
Machinery and equipment
Chemical products
Data processing devices, electronic & optical devices
%
22
13
5
4
16
7
Pharmaceutical products & similar
Electrical equipment
Basic metals
Food products
Rubber & plastic products
Other
11
9
8
5
German exports (2022)¹
GDP (current prices) Germany¹
3,000
4,000
5,000
USD billion
2013 2014
2015 2016
2017
2018
2019
2020
2021
2022
2023e
2024e
¹ Source: German Federal Statistical Office
1
Source: IMF database
Market outlook & operations
Markets and driving forces
Germany
CIS
Sale of russian business
Brands
Digital platform
e-mobility
19
FERRONORDIC ANNUAL REPORT 2022
Introduction
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual report
Trends and driving forces
During 2022, continued supply disruptions coupled with high inflation, high energy
prices and rising interest rates affected the German market negatively. Despite
a less supportive macroeconomic backdrop, the demand for trucks in Germany
remained firm as the market was supported by pent-up demand from the pandemic
lock-down. As a result, the total German market for heavy trucks declined only by
1 percent.
In a longer perspective, Ferronordic believes that the German truck industry
will remain resilient for the following reasons:
A strong German economy
The German economy is expected to continue to play a vital role for the whole of
the EU and the rest of Europe. Various development programs, such as Germany’s
National Recovery and Resilience Plan and the Federal Transport Infrastructure
Plan 2030, have been adopted by the German government and will support eco-
nomic growth. This means a continued demand for trucks and transport services.
Electrification and increased environmental standards
Challenges related to climate change affect all markets and businesses. Climate
change is expected to be a top priority for the new German government. Germany
will increase the pace of conversion of the transport sector and the phasing out
of fossil fuels. The transition to electric transport will start in the lighter segments.
In the long run, however, the entire transport sector is facing a transformation. An
extensive subsidy program from the German government will contribute to this
transition. Electrification brings not only a need to replace the truck fleet, but also
demand for completely new services and business solutions. Companies that can
provide charging infrastructure and advice on which trucks and what equipment
that best meet the needs of customers and the requirements of the future will be
able to take market shares.
Development of the transport industry
Road freight transport is the backbone of trade and commerce not only in Germany,
but in the whole of Europe. In parallel with the technical development and partly
because of it, the transport industry is also developing. Ferronordic estimates that
the fragmented German haulage industry will undergo a consolidation with fewer
but larger players. This also brings higher degrees of specialisation and profes-
sionalism, which in turn puts greater demands on Ferronordic and other partners
within the industry.
Continued growth in e-commerce
During 2017-2022, the German e-commerce market expanded by 69 percent, from
EUR 59b to EUR 99b¹. The rapid development of e-commerce puts new and higher
demands on transports and logistics. The pandemic has accelerated this trend.
The demand for fast deliveries increases the need for logistics and storage hubs
in locations close to consumers and for efficient transport both to and from such
facilities. This has led several e-commerce operators to take a stronger grip on the
entire transport chain to ensure increased delivery capacity to consumers. This, in
turn, increases the demand for reliable logistics operators and the pressure on their
partners.
Germany
¹ Source: German Federal Association of E-Commerce and Mail-Order Trade
Market outlook & operations
Markets and driving forces
Germany
CIS
Sale of russian business
Brands
Digital platform
e-mobility
20
FERRONORDIC ANNUAL REPORT 2022
Europe’s most important market
Germany’s economic importance makes the country the largest market in Europe
for heavy trucks. There is a strong correlation between economic activity and new
sales of trucks. Germany’s geographical position in the EU also makes the country
a logistics centre serving over 82 million Germans, 150 million consumers in nine
neighbouring countries and almost 500 million EU inhabitants. This has contributed
to Germany having one of the most advanced transport infrastructures in Europe
with a road network of 230,000 km, over 250 inland ports and 21 international
airports.
Development 2022
Ongoing component shortages and supply chain disruptions affected vehicle avail-
ability throughout the year. Total new registrations remained mostly unchanged.
The supply constraints on new trucks had a positive effect on the market for used
trucks – both in terms of truck sales in units and the price development. The total
mileage
*
in 2022 was largely unchanged compared to 2021, remaining at a rela-
tively high level. A high mileage tends to increase the aftermarket sales potential.
In 2022, the availability of mechanics was a limiting factor for our aftermarket
sales.
The truck market
The truck market in Germany is mature and demanding, with customers placing great value on brand,
tailor-made business solutions and dense and high-quality service network coverage. Maximising the
utilisation and minimising unplanned downtime is crucial for the profitability and business success of
customers in the industry.
Heavy truck registrations in Germany
0
80,000
202220212020201920182017201620152014201320122011201020092008
67,797
Heavy trucks registrations
1
Average truck toll mileage index
*
75
80
85
90
95
100
105
110
115
120
40,322
48,827
60,218
55,167
55,215
61,940
58,574
65,280
66,441
68,450
70,264
50,427
55,386
55,089
1
Germany registrations data compiled by Volvo Trucks (until December 2022).
*
Truck toll mileage index is a fixed base index that traces the development of the mileage of
heavy trucks (with four or more axles) on German federal motorways and is calculated from
digital process data from the truck toll collection system.
Germany
Market outlook & operations
Markets and driving forces
Germany
CIS
Sale of russian business
Brands
Digital platform
e-mobility
Introduction
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual report
21
FERRONORDIC ANNUAL REPORT 2022
Introduction
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual report
Market segment trucks
Size segment Heavy trucks, >16 tons Medium duty trucks, 7–16 tons Light trucks, <7 tons
Main customer groups
Logistics and transport companies, con-
struction and civil engineering companies
etc.
Logistics and transport companies, con-
struction and civil engineering companies
etc.
Logistics and transport companies, con-
struction and civil engineering companies,
municipalities and municipal contractors etc.
Main areas of use
Long-distance driving and regional trans-
ports, timber transports, heavy transports,
construction and civil engineering trans-
ports, mining and quarry transports etc.
Local and regional distribution, light con-
struction, utility and refrigerated transport
etc.
Many different transport assignments, in-
cluding mobile workshops, freight transport,
postal and courier services etc.
% of new truck sales
in Germany in 2022
91 1 8
Germany
Market outlook & operations
Markets and driving forces
Germany
CIS
Sale of russian business
Brands
Digital platform
e-mobility
22
FERRONORDIC ANNUAL REPORT 2022
Introduction
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual report
Operations
Ferronordic’s sales area corresponds to approx. 20 percent of the German market
for heavy trucks. The area includes some of the busiest and most developed parts
of Germany, such as Hanover and Frankfurt Rhein-Main, the second largest metro-
politan region in the country. It also includes a large part of eastern Germany, with
rapidly-growing cities such as Leipzig and Dresden. In addition to new sales, the
market also consists of used trucks, service, maintenance and rental.
Ferronordic’s operations in Germany consist of sales and rental of new trucks
from Volvo Trucks and Renault Trucks, sales of used trucks and service and sup-
port of trucks and light commercial vehicles. In 2022, Ferronordic also became a
distributor for Sandvik mobile crushers and screens in most of Germany.
Ferronordic has been present in the German market since January 2020,
when the Company became a dealer of Volvo Trucks and Renault Trucks. At the
start in Germany, the Company took over nine of Volvo’s own workshops and two
workshops from a smaller dealer in Ferronordic’s sales area. In 2022, Ferronordic
opened a workshop and used trucks centre in Coswig, set up new workshops
in Bad Hersfeld and Aschaffenburg, and moved into our newly built service and
sales hub in Hanover. In addition, a new workshop in Peine was acquired. Today,
Ferronordic has 21 workshops and 382 employees in Germany.
Sales and rental of trucks
Ferronordic sells and offers rental of new trucks from Volvo Trucks and Renault
Trucks with focus on heavy and medium-duty trucks. The trucks are employed in
transport and logistics as well as in customers’ own operations on construction
sites and mines. Ferronordic’s product range also includes trucks for local and
regional distribution as well as municipal services such as waste management.
The segment also includes sales of used trucks. Ferronordic’s sales of new trucks
in units grew by 24 percent in 2022 to 992, including light commercial vehicles.
Sales increased in all weight segments. In terms of revenue, sales of new trucks
increased by 32 percent and amounted to SEK 1,034m.
In the coming years, sales of electric trucks are expected to increase signifi-
cantly. Together with digitalisation, electrification also creates completely new
business opportunities where Ferronordic can take greater overall responsibility
of the service offering. At the end of 2021, Ferronordic ordered 32 all-electric
medium-duty trucks, of which 11 from Volvo and 21 from Renault. In 2022, the
trucks were primarily used as demo vehicles for promotional purposes.
Sales of used trucks in units declined by 12 percent. In terms of revenue,
sales of used trucks amounted to SEK 161m, which is an increase of 26 percent
compared with the previous year. Ferronordic sees meaningful potential for the
used trucks business to complement its product portfolio.
Aftermarket sales
Ferronordic offers maintenance and repairs of trucks. The work is often carried out
within the framework of different types of service agreements to meet the needs of
2022 2021
Change,
%, pp
Units of new machines and trucks 992 800 24
Units of used machines and trucks 211 241 -12
Revenue, SEK m 1,770 1,368 29
Gross profit, SEK m 214 149 44
Operating profit, SEK m -32 -71 55
Gross margin, % 12.1 10.9 1.2
Operating margin, % -1.8 -5.2 3.4
SG&A/Revenue, % 14.2 15.9 -1.7
Working capital/Revenue, % 17.0 6.4 10.6
0
500
1,000
1,500
2,000
202220212020
Revenue, SEK m
Truck sales
Aftermarket sales
Other income
%
27
67
5
Net sales by activity
0
200
400
600
800
1,000
202220212020
Units of trucks sold
Segment 2022 2021
Rigid trucks 238 190
Tractor trucks 673 570
Light commercial vehicles 81 40
Total 992 800
New cars 0 48
-80
-60
-40
-20
0
202220212020
Operating profit and
operating margin
-8,0
-6,5
-5,0
-3,5
-2,0
SEK m
%
Operating profit
Operating margin
each customer. In 2022, aftermarket sales increased by 31 percent and amounted
to SEK 479m. A contributing factor behind the positive development is the acqui-
sitions of workshops that Ferronordic made in 2021. Organic growth amounted
to 22 percent, while the workshops acquired in 2021 contributed 9 percent of the
growth.
Germany
Market outlook & operations
Markets and driving forces
Germany
CIS
Sale of russian business
Brands
Digital platform
e-mobility
23
FERRONORDIC ANNUAL REPORT 2022
Introduction
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual report
Sales of new trucks 2022
Type of product Number of sold units Description
Volvo FH16
14
The most powerful truck in the Volvo Trucks product portfolio. Suitable for a variety of applications including
long haul, timber transport, heavy haulage and construction. Available with an electric engine.
Volvo FH
684
Long haul and regional haul truck mainly used in transportation and logistics. Usually comes as a semitrailer
tractor or as a rigid haul. The Volvo FH also comes with a liqueed gas (LNG) engine. Available with an
electric engine.
Volvo FMX
28
Volvo Trucks’ most robust construction truck. Typical areas of use are building and construction transport, as
well as mining and quarry transport. Available with an electric engine.
Volvo FM
52
Versatile truck, suitable for a variety of purposes, including long haul, regional haul, building and construction.
Available with an electric engine.
Volvo FE
12
Medium-duty truck used for distribution, light construction, utilities and refrigerated transport. Available with
an electric engine.
Volvo FL
28
The smallest truck in Volvo Trucks product range. Used for local and regional distribution, refuse collection,
light construction, and as a small format tractor. Also available with an electric engine.
Renault T
83
Renault truck for long haul and regional haul. Also used in distribution transport and building and construction
transport.
Renault D
5
Used widely in household and industrial waste collection, cleaning and sanitary services, reghting and
rescue services. Available with an electric engine.
Renault C
5
A versatile truck usually used for material transports in construction and civil engineering.
Renault K
0
Complementary truck for Renault C model. A heavy truck suitable for quarries, logging and various construc-
tion sites.
Renault Master
81
Light commercial vehicles that carry out a variety of transport assignments, including mobile workshops,
freight transport and postal and courier services. Available with electric engine.
Germany
Market outlook & operations
Markets and driving forces
Germany
CIS
Sale of russian business
Brands
Digital platform
e-mobility
24
FERRONORDIC ANNUAL REPORT 2022
Introduction
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual report
Peine
(7) Ferronordic outlets in Germany as of February 2023
Peine
Hannover
Barleben
Coswig
Dessau
Görschen
Bautzen
Dresden
Nordhausen
Leipzig
Kassel
Bergstrasse
Simmern
Kirn
Bingen
Limburg
Halger
Frankfurt
Fulda
Bad Hersfeld
Aschaffenburg
(21) Ferronordic outlets in Germany as of February 2023
Service network
Ferronordic has 21 workshops in an area that represents approx. 20 percent of the German truck market
(based on registrations). The strategy is to continue to expand and improve the Company’s network and
organisation to increase the market share for Volvo Trucks and Renault Trucks as well as to increase
Ferronordic’s share of the total aftermarket in its sales area, thus creating a sustainable profitability.
The need for a dense network of workshops is mainly the same as in construction
equipment. Trucks are central to the operations of Ferronordic’s customers. Any
unplanned downtime quickly leads to increased costs and a deterioration in prof-
itability. Proximity to customers, a large number of workshops and good access to
spare parts are therefore key success factors for a dealer. Most of the workshops
are in larger cities or at important junctions along the Autobahn. Ferronordic’s
workshops maintain a high and uniform standard in terms of infrastructure, quality
and environment.
Region
No. of
workshops
Description
West 6
Includes Limburg, Bingen, Bergstrasse, Simmern,
Kirn and Haiger.
East 6
Includes fast-growing cities such as Dresden and
Leipzig, as well as Bautzen, Coswig, Dessau and
Görschen.
South 5
Includes Frankfurt, which is the main city in Rhine
Main metropolitan region, Fulda, Kassel, Bad Hers-
feld and Aschaffenburg.
North 4
Includes Hanover, which is the largest city in
Braunschweig-Göttingen-Wolfsburg metropolitan
region, Nordhausen, Magdeburg and Peine.
Germany
Market outlook & operations
Markets and driving forces
Germany
CIS
Sale of russian business
Brands
Digital platform
e-mobility
25
FERRONORDIC ANNUAL REPORT 2022
Introduction
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual report
CIS
Ferronordic refers to CIS as formerly constituent republics of the Soviet Union except Russia, Belarus,
Ukraine and Baltic states. CIS is characterised by large natural resources. In 2022, countries comprising
CIS accounted for 3.3 percent of total global oil production and 4.8 percent of total global gas production¹.
The region holds substantial reserves of gold (Kazakhstan, Uzbekistan, Kyrgyzstan), zinc (Kazakhstan)
and other minerals. In 2022, CIS GDP in current prices amounted to USD 525b with a population of
97m people². In 2022, Ferronordic’s CIS operations included only Kazakhstan.
Kazakhstan: maintained growth in turbulent environment
Kazakhstan’s economic growth is largely driven by exports of natural resources, oil
and gas in particular, which constitute approx. 35 percent of GDP, but also other
commodities such as copper, zinc and uranium. Kazakhstan is also developing its
agriculture sector which has substantial potential but remains underinvested. The
country is emerging as a major transport and logistics hub in the region linking
Europe and Asia.
Like many other countries, Kazakhstan faced economic and social challenges
in 2022. Unrest and protests in January 2022, regional geopolitical tensions, disrup-
tions in production and logistic chains due to the military conflict in Ukraine led to
declining business activity and rising inflation.
As a result, the economic growth slowed from 4.0 percent in 2021 to 3.1 per-
cent in 2022. The slowdown mainly reflected disruptions in oil production in 2022.
The oil price increased sharply in the first half of 2022 but declined in the second
half of the year. On average, oil price in 2022 was approx. 100 USD/barrel.
Inflation pressure grew in 2021 and increased further in 2022, mainly due to
spillover effects from the conflict in Ukraine. As a result, inflation reached 20.3 per-
cent in 2022 (8.4 percent in 2021). The Kazakh currency, the tenge, strengthened
by 7 percent against the Swedish krona from 47.7 at the beginning of the year to
44.3 at the end of the year.
Looking ahead, Kazakhstan’s GDP is expected to grow between 3.5-4.3 per-
cent in 2023, partly on stronger commodity prices but also due to significant infra-
structure investments and Kazakhstan’s growing role as a regional hub.
¹ Source: British Petroleum Statistical Review of World Energy (2022)
² Source: U.S. Geological Survey, Mineral Commodity Summaries (2023)
%
Oil production¹
0
5
10
15
20
USA
Russia
Saudi Arabia
Canada
Iraq
Iran
UAE
Brazil
CIS
16.8
12.7
12.2
6.8
4.8
4.0
3.9
3.7
3.3
0
5
10
15
20
%
Gold reserves²
Australia
Russia
South Africa
USA
Peru
CIS
Indonesia
Brazil
Canada
16.2
13.1
9.6
5.8
5.6
5.4
5.0
4.6
4.4
0
5
10
15
20
25
%
Gas production¹
USA
Russia
Iran
China
CIS
Qatar
Canada
Australia
Saudi Arabia
23.1
17.4
6.4
5.2
4.8
4.4
4.3
3.6
2.9
0
10
20
30
40
%
Zinc reserves²
Australia
China
Russia
Peru
Mexico
India
CIS
USA
Sweden
31.4
14.8
10.5
8.1
5.7
4.6
3.5
3.5
1.9
Economic and political development
¹ Source: British Petroleum Statistical Review of World Energy (2022)
² Source: IMF database
KLAR
Market outlook & operations
Markets and driving forces
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Sale of russian business
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26
FERRONORDIC ANNUAL REPORT 2022
Introduction
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual report
Trends and driving forces
The future demand for our products and services in CIS will depend on several
economic and industry trends. These include, for example, the activity in the
construction and commodity sectors but also the gradual sophistication of Kazakh
industry and increasing maturity among our customers.
Activity in the construction sector
The demand for our products and services is mainly driven by the rising demand
for infrastructure development, particularly the construction of roads, railways,
oil and gas pipelines, ports and other infrastructure. Kazakhstan’s infrastructure
needs are increasing with its expanding economy, growing role as a regional hub
and increasing population. Several large construction projects are planned or on-
going. Among others, these include the construction of Big Almaty Ring Road, the
modernisation of the Dostyk-Moyinty railway and the reconstruction of more than
10,000 km of local and national roads. We expect construction activity in Kazakhstan
to increase, driven by a long-term need to improve the country’s ageing and under-
invested infrastructure.
Activity in the commodity sector
Construction equipment is used operationally in numerous industries related to oil
and gas, gold, minerals, metals and other commodities. Therefore, the demand for
our products and services is also driven by the activity and the investment in these
sectors, which in turn depend on the underlying commodity prices. Kazakhstan’s
economy to a large extent depends on exports of commodities, particularly oil and
gas, but also zinc, copper and other natural resources. The continued extraction
and processing of these natural resources, as well as the construction and main-
tenance of the infrastructure required for it, are important drivers for continued
growth and for future construction projects. Examples of major projects related to
the extraction of natural resources in Kazakhstan include the expansion of the
Tengiz and Kashagan oilfields, the construction of a gas processing plant in
Kashagan and the construction of an oil refinery in Jezkazgan.
Gradually maturing customers
On more developed markets, companies that procure construction equipment have
shifted focus from short- to long-term capex programs and from initial price to total
cost of ownership. The total cost of ownership includes fuel costs, repair and main-
tenance costs, standstill costs and residual value over the machine’s life cycle. In
Kazakhstan, however, companies often continue to focus on the initial price. This
is gradually changing as the companies become more mature and learn more
about long-term efficiency and productivity. The availability of high-quality aftermar-
ket service is also expected to become more important as customers become less
inclined to repair and maintain equipment by themselves, as their focus on uptime
increases and as the machines become more advanced.
KLAR
CIS
Market outlook & operations
Markets and driving forces
Germany
CIS
Sale of russian business
Brands
Digital platform
e-mobility
Introduction
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual report
27
FERRONORDIC ANNUAL REPORT 2022
Industries
General construction
and other
Mining Road construction
Quarries and
aggregates
Oil and gas
Main area of use
Construction, maintenance
and demolition of buildings,
industrial facilities and infra-
structure as well as other
areas such as agriculture,
recycling and waste man-
agement.
Excavation and transpor-
tation of earth and rock.
Construction and mainte-
nance of roads and other
infrastructure in connection
to mines.
Construction and mainte-
nance of roads, bridges,
landing strips, etc.
Extraction and production
of raw materials for the
construction industry.
Construction and mainte-
nance of pipelines, refineries
and other infrastructure
(e.g. roads within or to oil
and gas fields).
% of new machines
sales in 2022
37 22 16 25 -
Competitors
Caterpillar
Hitachi
Doosan
Caterpillar
Hitachi
Komatsu
Wirtgen
Bomag
Caterpillar
Caterpillar
Hitachi
Doosan
Caterpillar
Hitachi
Doosan
Comments
The customers range from
large construction compa-
nies to smaller subcon-
tractors. Demand includes
all from larger production
machines to smaller and
simpler ones.
Customers’ focus on produc-
tivity and efficiency creates
high demands on spare
parts availability and service
quality.
Short season creates focus
on productivity and demands
spare parts availability and
service quality. A large popu-
lation of Volvo CE machines
creates demand for spare
parts and service.
Larger companies with
a focus on productivity
prefer premium brands. High
machine utilisation requires
regular and efficient service
and repairs at the right time,
preferably in the form of
service package solutions.
Dominated by a few large
companies that often out-
source contracts to sub-
suppliers.
Market segments
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Market outlook & operations
Markets and driving forces
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28
FERRONORDIC ANNUAL REPORT 2022
Introduction
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual report
In Kazakhstan, Ferronordic sells new and used machines from premium manufactur-
ers. The Company’s main partner is Volvo CE, which manufactures machines such
as dump trucks, wheel loaders, excavators and pavers. In addition, Ferronordic sells
backhoe loaders and compact equipment from Mecalac and mobile crushers and
screens from Sandvik. In 2022, sales of new Volvo CE machines, rental, attachments
and Volvo CE aftermarket sales accounted for 90 percent of total sales in Kazakhstan.
In 2022, Ferronordic increased sales of new machines in units in Kazakhstan by
11 percent to 60 machines. In terms of revenue, new machine sales increased by
42 percent to SEK 135m.
Sales of used machines in units increased by 300 percent to 24 machines and
trucks. In terms of revenue, sales of used equipment and trucks increased by
108 percent to SEK 14m.
Aftermarket sales
Ferronordic’s vision is to be the leading service and sales company in its markets.
Professional service and timely supply of spare parts are critical to ensure uptime and
productivity for the machines that the Company is responsible for and that are an in-
tegral part of its customers’ production processes. Ferronordic’s digital sales platform
(see also p.34) plays an important role in securing this level of uninterrupted perfor-
mance for our customers. Ferronordic performs planned maintenance, diagnostics
and overhauls as well as planned and unplanned repairs. The work is often carried
out within the framework of different levels of service agreements to meet each
customer’s individual needs. The Company also offers training for machine operators.
During 2022, aftermarket sales in Kazakhstan increased by 30 percent to SEK 52m.
Contracting services
In contracting services, Ferronordic owns, services and operates equipment on behalf
of its customers and is paid per cubic meter and kilometer of material transported.
Ferronordic creates value by operating the machines more efficiently, with higher
utilisation and lower fuel and parts consumption. In 2022, Ferronordic only offered
contracting services in Russia. The Group’s ambition is to offer contracting services in
Kazakhstan in the future.
2022 2021
Change,
%, pp
Units of new machines and trucks 60 54 11
Units of used machines and trucks 24 6 300
Revenue, SEK m 203 143 42
Gross profit, SEK m 36 25 45
Operating profit, SEK m 16 13 21
Gross margin, % 17.8 17.4 0.4
Operating margin, % 7.6 8.9 -1.3
SG&A/Revenue, % 12.5 8.2 4.3
Working capital/Revenue, % -3,2 -8,1 4,9
Machine sales
Aftermarket
%
26
74
Net sales by activity
General Construction & Other
Road Construction
Mining
Quarries & Aggregates
%
16
37
22
25
New machine net sales by industry
0
10
20
30
40
50
60
2022202120202019
Number of machines sold
0
50
100
150
200
250
2022202120202019
Revenue, SEK m
Operations
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Market outlook & operations
Markets and driving forces
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FERRONORDIC ANNUAL REPORT 2022
Introduction
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual report
Sales of new machines 2022
Type of product Number of sold units Description
Excavators 34 Used for a wide range of purposes, e.g. landscaping, excavation, trenching, demolition, loading etc.
Wheel loaders 2 Used to move or load materials. Available in different sizes and models, from compact to large production
machines.
Road construction
equipment
5 Pavers (tracked or wheeled) are used to lay asphalt in connection with the construction of roads, airports etc.
Compactors are used to press surfaces, e.g. asphalt or earth, often in connection with road construction.
Articulated haulers 2 Articulated towing vehicles for demanding conditions. Areas of use include road construction, quarrying,
mining and waste management.
Backhoe loaders 17 A tractor with a shovel or scoop in the front and excavator in the back. Used for a wide range of purposes,
e.g.digging ditches, lifting, loading, material handling and construction.
KLAR
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Market outlook & operations
Markets and driving forces
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30
FERRONORDIC ANNUAL REPORT 2022
Service network
As of the end of 2022, Ferronordic operated seven workshops in Kazakhstan.
It is important for dealers of construction equipment to be close to their customers:
1. It is typically difficult or impossible to move construction equipment to a work-
shop. Instead, the dealers’ mechanics usually go to the customer sites, where
the machines are operating.
2. Construction equipment is critical for the production process. Idle machines
imply large opportunity costs and reduced profitability for the customer. As a
result, it is crucial that the dealer’s mechanics have good access to spare parts
and that they can be on site rapidly to ensure machine uptime.
This means that proximity to customers, a sufficient number of facilities and good
access to spare parts are key success factors. Ferronordic aims to always have
more than 90 percent of all spare parts available at all workshops. The network
facilities vary from simple workshops and sales offices to purpose-built service
stations. Mobile service units and on-site workshops at the production sites of
large customers complement Ferronordic’s network.
Astana
Karaganda
Ust-Kamenogorsk
Aktobe
Atyrau
Shymkent
Almaty
(7) Ferronordic outlets in Kazakhstans as of February 2023
KLAR
CIS
Market outlook & operations
Markets and driving forces
Germany
CIS
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Brands
Digital platform
e-mobility
Introduction
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual report
31
FERRONORDIC ANNUAL REPORT 2022
Introduction
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual report
Sale of russian business
From its founding in 2010 up to the beginning of 2022, Ferronordic increased the
number of workshops in Russia from 6 to 88, the number of employees from 160
to 1,495 and the number of brands in its portfolio from 1 to 7. Besides Volvo CE,
Ferronordic was also the authorised dealer and service partner for Sandvik,
Rottne, Mecalac, Dressta and Terex and authorised service partner for Volvo
Trucks and Renault Trucks. In 2014, Ferronordic began to offer contracting services.
It was also in Russia that Ferronordic developed its digital sales tools, which
through a digital rules engine automatically converted telematic machine sig-
nals into sales leads for Ferronordic’s service organisation. Revenue grew from
SEK 1.2b¹ to SEK 4.7b and profitability improved. When the conflict in Ukraine
began in February 2022, Ferronordic was one of the leading service and sales
companies in the market for construction equipment and trucks in Russia.
As a result of the conflict in Ukraine, it became impossible for Ferronordic to
continue its business in Russia. Ferronordic thus sold its Russian business at end
of 2022 for a price of SEK 1,334m. Approx. SEK 237m of the sales proceeds were
used by Ferronordic AB to repay debt to the sold Russian subsidiaries. The re-
maining part of the purchase price was received in euro on Ferronordic’s account
in Austria. For the Group, the divestment resulted in a cash inflow of EUR 99m or
approx. SEK 1,097m.
At the end of 2022, the net assets of the sold subsidiaries were SEK 1,292m.
Against the price of SEK 1,334m, the result from the sale of the subsidiaries was
thus SEK 41m. The total result from the discontinued operations in 2022, including
the result for the period, costs of sale and foreign exchange effects, was
SEK 243m.
The buyer is part of the GILK group, a Russian leasing company. The purchase
price was fixed and amounted to RUB 9.2b.
The sale means that Ferronordic in all material respects divested all assets
and liabilities related to Russia. The transaction agreements contain basic rep-
resentations and warranties concerning the sold companies, but Ferronordic does
not expect any liabilities or obligations to arise from these. The sold companies
may continue the use of the Ferronordic trademark during a transition period of six
months after the sale.
As part of the terms of the transaction, Ferronordic obtained an option to
repurchase up to 75.1% of the sold companies within seven years for a pre-agreed
price. The price is equal to the higher of the sold companies’ net asset value at
the time of exercising the option, or the purchase price for the sold companies
increased by an annual interest of 12% from the date of sale, in both cases multi-
plied by the percentage of shares acquired. The option becomes void if Ferronordic
should restart business activities in Russia on its own.
The sale is not expected to have any direct impact on the Group’s operations
outside of Russia. The work to isolate and separate the Russian business from the
rest of the Group was completed in August 2022. The sale is also not expected to
result in any changes to the strategy of the Group in general.
More information about the performance of Ferronordic’s Russian business
(“the discontinued business”) in 2022 and the result of the sale of the Russian sub-
sidiaries can be found in note 32, Sale of subsidiaries, on page 117 of this report.
Ferronordic was founded in 2010 to acquire and operate Volvo Construction Equipment’s distribution
business in Russia. Ferronordic took over the dealership and the related dealer assets from Volvo and
rapidly expanded the operations in Russia. Following the conflict in Ukraine, it became impossible for
Ferronordic to continue business in Russia. At the end of 2022, the Group thus sold its Russian subsidi-
aries for a price close to the net asset value. As a result, Ferronordic in all material respects left Russia.
¹ Annualised last twelve months (”LTM”)
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32
FERRONORDIC ANNUAL REPORT 2022
Ferronordic is a provider of premium services, products and customised
solutions. This places high demands on the Company’s choice of partners.
The products Ferronordic offers must always be world-
leading in safety, productivity and sustainability metrics in
order to best contribute to the customer’s business and
have a minimal negative impact on the environment. At
the core of Ferronordic’s offer are trucks and construction
equipment from Volvo Trucks, Renault Trucks and Volvo
Construction Equipment. From 2021, Ferronordic is a
partner for Sandvik’s mobile crusher and screens. From
2017, Ferronordic is also a partner for Mecalac’s backhoe
loaders and compact equipment. In order to leverage its
organisation and infrastructure, and offer its customers a
more complete range of equipment, Ferronordic is seeking
partnerships with other leading brands.
Brands
Market outlook & operations
Markets and driving forces
Germany
CIS
Sale of russian business
Brands
Digital platform
e-mobility
Introduction
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual report
33
FERRONORDIC ANNUAL REPORT 2022
Introduction
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual report
Brand Descpription
Volvo Construction Equipment
Prole: Swedish Volvo CE is a leading manufacturer of construction equipment in the premium segment and one of the largest companies in the industry. The company is
part of the Volvo Group.
Business: Ferronordic is an authorised dealer (including aftermarket) for Volvo CE in Kazakhstan.
Offer: A wide range of machines in different sizes and categories.
Sales 2022: 43 new machines.
Volvo Trucks
Prole: Swedish Volvo Trucks is one of the world’s largest truck manufacturers with customers in more than 140 countries. Volvo Trucks is a leader in areas such as quality,
safety and environment. The company is part of the Volvo Group.
Business: Ferronordic is an authorised dealer and aftermarket partner for Volvo Trucks in an area corresponding to approx. 20 percent of the German truck market.
Offer: A wide range of trucks in different sizes and categories.
Sales 2022: 818 new trucks.
Renault Trucks
Prole: French Renault Trucks is one of the world’s leading truck manufacturers with customers in more than 150 countries. The company is owned by the Volvo Group.
Business: Ferronordic is an authorised dealer and aftermarket partner for Renault Trucks in an area corresponding to approx. 20 percent of the German truck market.
Offer: A wide range of trucks of different sizes, segments and categories.
Sales 2022: 174 new trucks including 81 light commercial vehicles.
Sandvik
Prole: Swedish Sandvik is a premium brand and a global leading manufacturer of mobile crushers and screens. The products are used in areas such as open pit mining,
mining and recycling.
Business: Ferronordic is the ofcial distributor of mobile crushing and screens in most of Germany and throughout Kazakhstan. Ferronordic is also responsible for service
and repairs
Offer: Mobile crushers and screens.
Mecalac
Prole: French Mecalac is a leading manufacturer of backhoe loaders, compact wheel loaders and other compact machines.
Business: Ferronordic is the ofcial dealer of backhoe loaders from Mecalac throughout Kazakhstan.
Offer: Backhoe loaders.
Sales 2022: 17 backhoe loaders.
* Sales gures for 2022 exclude Russia. In 2022, 511 new machines were sold in Russia.
Market outlook & operations
Markets and driving forces
Germany
CIS
Sale of russian business
Brands
Digital platform
e-mobility
Digital platform
Ferronordic’s services and products are integrated parts of, and directly crucial to, the operations of its
customers. Efficiency and reliability are therefore of central importance and place high demands on
Ferronordic’s product and aftermarket service offering.
Through digital technology and connected machines, Ferronordic provides service
and spare parts based on real-time data from the machines. Together with the
accumulated experience of Ferronordic’s mechanics and salespeople, as well as
the Company’s knowledge of its customers and their operations, this minimises the
risk of unforeseen and costly downtime.
Ferronordic has further developed the connection between customer knowl-
edge and machine data by creating its own system for digital sales support, both
for machine sales and aftermarket. Based on its know-how and experience, the
Company has developed a “rule engine” to read and convert the signals from the
machines’ telematics systems into sales leads. The signals are used to create
automatic predictive and preventive service and sales offers to customers.
Currently, digital sales support is only available in the operations in Kazakh-
stan. Ferronordic believes that the system is relatively unique among dealers and
that it therefore has great potential for use in other markets and products, including
the Company’s growing aftermarket business for trucks in Germany.
Telematics system
The telematics systems (e.g. Volvo CE’s CareTrack) monitor how the machines are
used and send signals about engine hours, fuel consumption, geolocation etc.
Rule engine
The signals of the telematics systems flow through the rule engine, where they are
analysed, categorised and combined. The signals are then automatically convert-
ed into “sales leads” and concrete customer offers.
Customer offer
The offers generated by the rule engine are automatically uploaded to the mobile
phone or tablet computer of the responsible salesperson along with a suggested
price and other commercial terms. The data is also collected in Ferronordic’s CRM
system.
Sales measure
The responsible salespeople contact customers and present the offers.
Follow-up
Customer offers generated by the rule engine are monitored continuously and
updated systematically to ensure that they are effective and result in increased
productivity and customer value.
34
FERRONORDIC ANNUAL REPORT 2022
KLAR
Market outlook & operations
Markets and driving forces
Germany
CIS
Sale of russian business
Brands
Digital platform
e-mobility
Introduction
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual report
Connectivity increases operational reliability and efficiency
35
FERRONORDIC ANNUAL REPORT 2022
Introduction
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual report
e-mobility
Sustainable transport solutions
Climate change is one of the biggest challenges of our time. The transport sector
accounts for a significant part of the world’s total carbon dioxide emissions and
Ferronordic’s ambition is to contribute to reducing emissions and be part of the
transition to sustainable transport solutions. The increasing focus on sustainability
and zero-emission technologies will transform the transportation industry. Volvo
Trucks and Renault Trucks are market leaders in battery-electric trucks. Working
closely with its key partners, Ferronordic sees opportunities to contribute to the
transition to sustainable transport, and thereby shape new business models.
Emissions regulations, purchase subsidies on electric trucks and urban
environmental zones with restrictions for diesel trucks are examples of changes that
are already transforming the transport industry. Ferronordic sees great business
potential in this change and is already employing electric trucks to offer sustainable
transport services in Germany. The German government is implementing an exten-
sive subsidy program to promote the transition to electric transport by contributing
a large part of the price difference between electric and diesel-powered vehicles.
However, the application process for these subsidies is complex, which for
individual customers can be an obstacle to buying an electric truck on their own.
To further accelerate the transition to sustainable transport, Ferronordic set up a
separate subsidiary in 2022 with a focus on rental of electric trucks. At the end of
2022, this company had a business manager responsible for promoting electric
mobility and three sales consultants. The first investments in the company have
been in vehicles for the rental fleet, charging infrastructure and skills development
within the organisation. At the end of 2021, Ferronordic made its first orders for
electric trucks in Germany, including 32 fully electric medium duty vehicles from
Volvo Trucks and Renault Trucks, which were delivered in 2022. These vehicles
are available for rental and sales and are used as demo vehicles. Ferronordic also
invested approx. SEK 3m in stationary and mobile electric chargers to our sales
outlets in 2022. Future investments will build on these assets and competences.
For Ferronordic, it is important to be a pioneer in electric mobility as future industry
development build on understanding and having experience from the changes we
see today. This will require attracting new talents from outside the company as well
as training new skills to existing staff.
Ferronordic sees as part of its mission to gain a more significant role in the
transport industry value chain. From being a supplier of trucks and construction
equipment to becoming a performer of the tasks in the transport industry and an
enabler for the industry. Over time, Ferronordic aims to move from mainly selling and
servicing electric trucks to also offering sustainable transport services using electric
trucks. Such services could include offers where Ferronordic owns, operates and
maintains the electric trucks on behalf of its clients and is paid per kilometre and
volume or weight of goods or material transported. Ferronordic believes that the
market will need support to adapt to electric transport solutions. Ferronordic can
provide expertise and experience and develop a market niche for such services.
Market outlook & operations
Markets and driving forces
Germany
CIS
Sale of russian business
Brands
Digital platform
e-mobility
37
FERRONORDIC ANNUAL REPORT 2022
Introduction
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual report
Sustainability is about employing and building natural, human, and technological
resources to meet the needs of the present without compromising the ability of
future generations to meet their own needs.
For Ferronordic, sustainability involves creating long-term value for all stake-
holders of the Company. Ferronordic sees no long-term contradiction between
sustainability and profitability, but rather the opposite. Demand for sustainable and
environmentally friendly business solutions is steadily increasing, and companies
taking the lead in developing and helping their customers meet their objectives will
gain competitive advantages.
Ferronordic works with partners and manufacturers focused on creating
sustainable business solutions and with customers who strive for resource
efficiency and minimised environmental impact. Sustainability is a central part of
Ferronordic’s strategy and applies to everything the Company does, from culture
to processes and operations. Sustainability is essential to Ferronordic’s constant
efforts to improve and build resilience.
Ferronordic’s sustainability approach
This sustainability report concerns Ferronordic’s reporting of non-financial information for the financial
year 2022 in accordance with Swedish legislation. Information and key figures presented refer to the
entire Group, including results from the Russian business divested in December 2022.
Ferronordic’s sustainability strategy
Ferronordic wants to abandon the linear approach for a circular one, a journey that
is illustrated below. An essential basis for our sustainability strategy is an emphasis
on system thinking, which helps Ferronordic understand how the Company’s
operations connect to society, the planet, and its inhabitants. One way to visualise
these relationships is to study Ferronordic’s value chain to identify risks and
opportunities and what positive or negative impact the business can have on the
environment (see p.39). To further understand Ferronordic’s connection with the
Company’s surroundings, we carried out an extended materiality analysis in 2021,
consisting of in-depth interviews with several stakeholders (see p.39). Another
underlying aspect of developing our sustainability strategy is a Gap-analysis carried
out by a third party in 2021. The Gap-analysis brought certain improvement areas
to our attention which helped us further develop our sustainability strategy.
EXTRACTING
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INCINERATION, LANDFILL
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KLAR
Sustainability
Ferronordic’s
sustainability approach
In line with
international standards
Transparency
Planet first
Fair workplace
Sustainable offer
Sustainability risks
Outlook for 2023
EU Taxonomy
KPI index
38
FERRONORDIC ANNUAL REPORT 2022
Introduction
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual report
Ferronordic’s sustainability work, including the Company’s processes, policies and
guidelines, is based on international, national and local laws and standards:
• UN Global Compact
• UN Global Strategic Development Goals (SDGs)
• ILO Basic Conventions
• UN Declaration of Human Rights
• OECD Guidelines for Multinational Enterprises
We have several policies in place to steer us toward sustainability:
Our Human Rights Policy includes principles for how we endeavour to
uphold the highest human rights standards throughout the value chain in order
to respect and support the human rights of all people affected by our business
throughout our societies.
Our Environmental Policy includes environmental principles that Ferronordic
shall adhere to to ensure that we manage our environmental impact throughout the
value chain of delivering our products and services.
Our Equality, Diversity, and Non-Discrimination Policy include guidelines
on how we shall act to be an inclusive organisation, provide equal opportunities
and eliminate discrimination to respect and support inclusion of all people affected
by our business throughout societies where we operate.
Our Anti-corruption Policy includes statements regarding business ethics
(including issues such as gifts, money laundering, relations with employees, etc.),
guidelines for actions in case of suspected irregularities, and whistle-blowing
procedures to adhere to Ferronordic’s commitment to zero tolerance to corruption.
Our Whistle-Blower Policy includes principles and guidance on using
Ferronordic’s whistle-blower function to ensure that the Group provides a practical,
secure and trusted whistle-blowing function that encourages employees and third
parties to report any suspected misconduct.
Our Code of Conduct includes principles and guidelines to eliminate unethical
behaviour, secure a safe and healthy work environment and fair competition.
A common purpose of all our policies is to communicate the principles in
each Policy set forth by Ferronordic internally and externally. The policies apply
to all employees and units within the organisation and all consultants working for
Ferronordic. The policies are reviewed annually.
Every year, we carry out compliance audits concerning our policies. During
these audits, we look at whether the yearly anti-corruption training has been
completed, if there have been any issues with corruption or health and safety, how
many of our employees have signed our policies, if purchases are made according
to our Purchasing Policy and if we follow environmental laws, etc. The personnel
involved in the audit processes include the General Counsel, Health and Safety
Department, HR department managers and the Head of Development and Training.
As a result of this year’s audits, we identified improvement areas regarding our
waste management that will be addressed 2023. Apart from that, no significant
deficiencies were identified in 2022.
UN Sustainable Development Goals
The UN Sustainable Development Goals (SDGs) serve to develop shared knowl-
edge, facilitate cooperation, produce and harmonise regulation and drive techno-
logical development, which ultimately leads to impact and change. Ferronordic is
committed to all 17 goals, all of which have some connection to the Company’s
operations. The focus is on the goals where the Company’s business activities can
have the most significant immediate impact and effect on positive long-term trends.
In line with international standards
6
13 14 15
• Clean water and
sanitation
• Climate action
• Life below water
• Life on land
3 8 10 165
• Good health and
well-being
• Gender equality
• Decent work and
economic growth
• Reduced inequality
• Peace and justice
strong institutions
5 11 12 17
• Gender equality
• Sustainable cities
and communities
• Responsible
consumption and
production
• Partnerships to
achieve the goal
KLAR
Sustainability
Ferronordic’s
sustainability approach
In line with
international standards
Transparency
Planet first
Fair workplace
Sustainable offer
Sustainability risks
Outlook for 2023
EU Taxonomy
KPI index
39
FERRONORDIC ANNUAL REPORT 2022
Introduction
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual report
Materiality Analysis
Ferronordic’s sustainability work stems from our materiality. The materiality analysis
includes the identification and prioritisation of our risks and opportunities – a
process that not only enables us to take relevant measures and use our resources
efficiently, but also enables us to meet stakeholder expectations. Our latest materi-
ality analysis was carried out in 2021 before the ongoing conflict in Ukraine.
Stakeholder Dialogue
The conducted materiality analysis included stakeholder dialogue consisting of
surveys, in-depth interviews, investor meetings, customer conversations and
employee surveys. Other essential groups participating in the dialogue were
suppliers, partners, authorities, municipalities and non-profit organisations. In
Transparency
Ferronordic reports ESG information using methodologies widely adopted by the industry, such as the
GHG Protocol. In 2021, Ferronordic reported in accordance with Nasdaq ESG Reporting Guide 2.0 and
gained the “Nasdaq ESG Transparency Partner” badge. This entails that our report contributes to fair,
transparent and efficient markets for all stakeholders.
addition, customer feedback and complaints were considered in the process to
contribute to and increase knowledge of areas of improvement.
Impact Assessment
An essential part of the materiality analysis is understanding Ferronordic’s impact
on the environment, climate, society and people. To do so, Ferronordic has par-
ticipated in internal and external surveys. Ferronordic has also analysed current
and future regulations and standards and risk analyses at the country and industry
levels. We have also studied how similar companies assess and report their impact
on the environment. Together with the stakeholder dialogue, this provides a coherent
picture of Ferronordic’s impact as well as risks and opportunities, it therefore also
shows us what we should focus on regarding our sustainability work.
Impact created by Ferronordic
Importance to stakeholders
A. Reduced carbon dioxide emissions
B. Health & Safety
C. Anti-corruption & Ethics
D. A green customer offer
E. Diversity & equal opportunities
F. Recycling
G. Responsibility for the supply chain
H. Training and development of staff
and organization
3.0 3.5 4.0 4.5 5.0
3.0
3.5
4.0
4.5
5.0
H
G
F
D
A
E
C
B
Material Aspects
The results of the materiality analysis showed that
Ferronordic’s primary focus should be on the following
sustainability aspects:
A. Reduced carbon dioxide emissions
B. Health and safety
C. Anti-corruption and ethics
D. A green customer offer
E. Diversity and equal opportunities
F. Recycling
G. Responsibility for the supply chain
H. Training and development of staff and organisation
As a result, Ferronordic has
launched a new sustainability
ambition and three focus areas:
• Planet first
• Fair workplace
• Sustainable offerings
KLAR
T
R
A
N
S
P
A
R
E
N
C
Y
P
A
R
T
N
E
R
•
N
A
S
D
A
Q
E
S
G
2021
Sustainability
Ferronordic’s
sustainability approach
In line with
international standards
Transparency
Planet first
Fair workplace
Sustainable offer
Sustainability risks
Outlook for 2023
EU Taxonomy
KPI index
40
FERRONORDIC ANNUAL REPORT 2022
Introduction
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual report
Volvo, Sandvik and Ferronordic’s other partners have high ambitions in
terms of sustainability. Ferronordic applies an environmental perspective
from production, use, maintenance and repair to reuse and recycling.
This year, we have actively worked with Volvo to promote electric trucks
in Germany. The ratio of sold electric trucks in 2022 was 1.2% of total
share of sold trucks.
Ferronordic has a car policy in Germany to support electric vehicles.
Employees are also offered access to charging infrastructure. The goal is
to increase the proportion of electric vehicles in the Company’s operations.
Ferronordic measures its carbon footprint in cases where data is available.
Where data is not available, Ferronordic is working towards setting up
processes to capture accurate information on emissions. The current
mapping covers electricity use, fuel consumption and business travel.
We aim to reach net zero in our operations by 2050. In 2021, Ferronordic
acquired a renewable energy certificate for its German operations. During
2021, 9 out of 14 workshops were certified. During 2022, there were
20 workshops in Germany and all of them became renewable energy
certified. Our target is to only use renewable energy for our workshops
by 2025.
Ferronordic maps its carbon footprint throughout the entire value
chain. The information is limited to some emission categories but will
gradually be complemented with additional data. The information on
electricity consumption is usually based on estimates as electricity is
often included in the rent. In cases where Ferronordic owns the facilities,
the information from the electricity bills is used. Based on this, the
Company’s carbon footprint has been calculated using emission factors
from the International Energy Agency (IEA). Business travel data come
from the Company’s travel agencies.
Planet first
Electricity consumption 2022 2021 2020 2019
Electricity, MWh
1
4,186 3,250 2,501 2,123
Electricity rate
2
2.83 3.19 - -
Renewable energy share, % 0 0 0 0
1
2019 data refer only to Russia. The 2020 data refer to Russia and Germany.
The 2021 and 2022 data refer to Germany, Kazakhstan and Russia.
2
MWh/revenue. Applies to Germany only and was first calculated in 2021.
Tons of CO
2
eq- emissions
by source 2022 2021 2020 2019
Electricity
1
1,667 1,184 882 754
Fuel 74,134
2
65,253 36,057 32,879
Business travel
3
879 878 385 1,115
Total 76,680 67,314 37,324 34,747
1
2019 data refer only to Russia. The 2020 data refer to Russia and Germany.
The 2021 and 2022 data refer to Germany, Kazakhstan and Russia.
2
2022 is the first year that car data from Germany is included.
3
Excluding Germany 2019 and 2020 and domestic travel in Russia. In addition,
strongly affected by the pandemic.
KLAR
Sustainability
Ferronordic’s
sustainability approach
In line with
international standards
Transparency
Planet first
Fair workplace
Sustainable offer
Sustainability risks
Outlook for 2023
EU Taxonomy
KPI index
41
FERRONORDIC ANNUAL REPORT 2022
Introduction
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual report
Rebuilt categories
1
2022 2021 2020
Articulated haulers 14 16 3
Engines 22 38 15
Gearboxes 35 50 19
Other components 145 158 45
1
These machines and components were rebuilt in Ferronordic’s rebuild centre in
Ekaterinburg, Russia. The facility was sold together with the rest of Ferronordic’s
Russian business at the end of 2022.
An important part of Ferronordic’s sustainability work was the Company’s
centre for machine and component rebuild in Yekaterinburg, Russia. By
restoring older equipment and selling it with new guarantees, Ferronordic
enabled better resource utilisation. The business included repairing
machines, manufacturing new components and recycling metal and parts
of machines that can no longer be restored to usable condition. The facility
was launched in December 2019, and its capacity expanded during 2020
and 2021. For equipment and materials that cannot be given a second life,
the goal was to increase the proportion of recycling and reduce the propor-
tion that goes to incineration or landfill. Ferronordic’s centre for machine
and component rebuild was sold together with its Russian business at the
end of 2022. However, Ferronordic sees good potential for similar rebuild
centres in its other markets.
Information regarding waste generation in the Company’s markets
shows that the largest categories consist of mixed waste for incineration
and used tires, oils and metals. Current data, which is not yet complete,
provides an overview of which waste categories Ferronordic should
focus on to increase the proportion of recycling. By 2025, we want the
share of recycled material in our total waste to be 50%. As shown in the
diagram below, used tires made up a significant part of Ferronordic’s total
waste during 2022. Most of the tires were used in contracting services in
projects in difficult conditions and remote parts of Russia, which posed
major challenges regarding waste management and recycling. Ferronordic
only provided contracting services in Russia and these operations were
divested with the rest of Ferronordic’s Russian business at the end of
2022. Ferronordic however sees potential to develop contracting services
in Kazakhstan. In such business development, used tires will be a priority
when it comes to investment in waste management.
8
22
14
9
%
Incineration
Tires
Oil
LED batteries
Paper
Glass
Metal
Plastic
Carton
Wood
Electronic waste
*
Fluorescent lamps
*
26
10
2
7
1
1
Waste per category
*
Electronic waste and flourescent lamps are less than 1 percent.
KLAR
Sustainability
Ferronordic’s
sustainability approach
In line with
international standards
Transparency
Planet first
Fair workplace
Sustainable offer
Sustainability risks
Outlook for 2023
EU Taxonomy
KPI index
42
FERRONORDIC ANNUAL REPORT 2022
Work environment
Health and safety are core aspects of Ferronordic’s business. Many of the Company’s
employees work in challenging and sometimes extreme conditions associated
with risks related to health and safety. It is Ferronordic’s responsibility to ensure
that working conditions are as safe as possible. The goal is of course zero inju-
ries. Ferronordic works systematically and proactively with employees’ working
environ ment. This includes, among other things, training. Thus, we have a target of
reaching 45 training hours per employee by 2025. It also includes frequent inspec-
tions of the Company’s facilities and reporting and recording of all incidents. These
inspections increase awareness of health and safety amongst employees and
remind them of the importance of safety routines. In 2022, the incident reporting
system previously implemented in Russia was also implemented in Germany. The
system is in the process of being implemented in Kazakhstan.
Diversity and engagement
The transport industry is being transformed at a fast pace. Although it may take
several years from the time a decision is made until the actual shift occurs, the
technical conditions and business models are changing. For Ferronordic to remain
relevant, innovation is a key factor. To be innovative, we need to promote and
capture ideas from different business areas. This requires diverse skills, back-
grounds and good working conditions. It also requires a shared sense of inclusion
and participation, where all employees feel that they are respected and that their
views and ideas are appreciated. We have a Competency Development Policy that
regulates the process of training and retraining employees and the development
and improvement of their personal qualities and professional aptitude. The policy’s
purpose is to maintain a high professional level of employees, maintain and
improve the competitiveness of the Company in the constantly changing market,
strengthen the corporate culture, etc.
Ferronordic has a diversity KPI to focus management’s attention and measure
developments in this area as we strive to be an inclusive company with employees
of diverse backgrounds. Ferronordic’s business activities and projects cover a wide
range of environments and conditions. From large cities to remote mountainous
regions. While Ferronordic creates jobs in sparsely populated areas and contributes
to the development of local communities, remote work in relatively isolated places
can also be challenging for Ferronordic’s employees in the long term. Ferronordic
invests in its HR function and uses a variety of tools to improve employee satisfac-
tion and maintain diversity. By 2025, we want to reach 80% employee engagement
and 30% diversity.
Diversity 2022 2021 2020 2019
Women in Board, % 33 29 17 17
Women in management, %
1
20 32 28 -
Total women employee, % 15 12 10 13
Diversity, %
2
24 21 - -
Employee engagement, %
3
- 77.2 - -
1
First calculated year 2020.
2
First calculated year 2021. Calculated as employees of diverse backgrounds/average total
headcount.
3
First calculated year 2021. Engagement is measured every second year and will next be
measured year 2023. Gallup Q12 employee satisfaction survey methodology.
Health & Safety 2022 2021 2020 2019
Hours training total 57,227 61,027 49,761 59,954
Hours training/employee 36 34.1 33.9 47.9
Safety hours training total 33,644¹ 6,810 4,282 9,344
Sick days/employee
2
10.2 5.9 4.9 2.6
Near-miss
3
114 129 48 169
Minor injuries
4
50 24 1 1
Major injuries 16 5 3 4
Fatalities 1 0 0 0
LTIFR Germany
5
18.11 3.87 - -
LTIFR Russia
5
1 2 - -
1
The increase is mainly due to stricter laws in Russia regarding first aid training as well as an
increase in training in the use of personal protective equipment.
2
The increase is mainly due to the pandemic.
3
Refers only to Russia and Kazakhstan. The changes between the years are mainly due to
the pandemic.
4
Minor and serious occupational accidents from 2021 and 2022 also include Germany.
5
Lost Time Injury Frequency Rate. First calculated year 2021.
Fair workplace
KLAR
Sustainability
Ferronordic’s
sustainability approach
In line with
international standards
Transparency
Planet first
Fair workplace
Sustainable offer
Sustainability risks
Outlook for 2023
EU Taxonomy
KPI index
Introduction
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual report
43
FERRONORDIC ANNUAL REPORT 2022
Introduction
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual report
Anti-corruption
Since its founding, Ferronordic has put significant efforts into measures
to fight corruption and develop a culture of strong business integrity. We
have a Procurement Policy that stipulates rules with different threshold
values to ensure that decisions are made by at least two people of rele-
vant level and competence. We run an Anti-corruption Policy to adhere
to Ferronordic’s commitment to zero tolerance to corruption (for more in-
formation, see p.38). An annual anti-corruption training is also mandatory
for all employees in all markets. Our prevailing target is for all employees
to complete the anti-corruption training. Moreover, Ferronordic’s Code of
Conduct includes statements on anti-corruption as well as
instructions on how to report suspected violations of the code. Our Code
of Conduct is available for all employees on our intranet and external
users on our webpage. Ferronordic operates under the Swedish Code of
Corporate Governance and sustainability is a standing item at man-
agement group and Board meetings. To make it easier for employees
and external parties to report signs of misconduct and non-compliance,
Ferronordic has established a whistle-blower function. A whistle-blower
can report any suspicious activity anonymously on the “Ferronordic
Hotline”. The whistle-blower function is described in the Company Code
of Conduct and is managed internally.
Responsibility for the supply chain
Ferronordic’s supply chain is associated with risks and opportunities
related to sustainability. The largest part of the supply chain consists of
manufacturers of trucks, heavy vehicles and construction equipment.
Ferronordic has a close relationship with these suppliers, which facili-
tates a mutual understanding of the importance of our shared environ-
mental footprint. Ferronordic only works with premium manufacturers.
These producers have for a long time been working to reduce their envi-
ronmental impact. This work and the close cooperation with its partners
help Ferronordic reduce its supply chain footprint. Ferronordic’s centre
for machine and component rebuild in Russia was certified according
to ISO 45001. Parts of the activities in Russia were certified according
to the quality management system ISO 9001 and the environmental
management system ISO 14001. ISO 45001 has been implemented in
Kazakhstan, but this part of the business is not yet certified. We are
currently working with implementing ISO 45001 in our German business.
In 2022, we expanded our quality and environmental management
systems to Germany.
ISO-certifications 9001 14001 45001
Germany Yes Yes No
Kazakhstan No No No
Russia Partly Partly Yes
Anti-corruption and compliance 2022 2021 2020 2019
Percentage of employees who have
completed anti-corruption training, %
100 100 100 100
Number of training hours in
anti-corruption/employee
1.14 1.08 1.06 1.04
Reported whistle-blower incidents 4 2 2 1
Whistleblower incidents which led to action 0 1 0 1
KLAR
Sustainability
Ferronordic’s
sustainability approach
In line with
international standards
Transparency
Planet first
Fair workplace
Sustainable offer
Sustainability risks
Outlook for 2023
EU Taxonomy
KPI index
44
FERRONORDIC ANNUAL REPORT 2022
Introduction
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual report
The impact of customers
Customers are at the centre of all Ferronordic’s operations. Ferronordic
and its customers are part of each other’s value chains. Ferronordic
strives not only to meet customers’ direct commercial needs but also to
support their work on sustainability. This means that Ferronordic always
strives to offer products with minimum environmental impact. Ferronordic
then works to optimise the product’s life cycle through maintenance,
repair and remanufacturing. At the end of the product’s life, Ferronordic
ensures that resources that customers can no longer use are recycled
when possible or responsibly disposed of.
Opportunities in transformation of transport
The transport industry is undergoing a transformation. Biodiesel, ethanol,
fuel cell technology, biogas and electricity are replacing petrol and
diesel as fuels. This transformation requires significant investments in
infrastructure, which means that some sources of energy will not be fully
available for several years. Through its strategic partnerships, Ferronordic
can offer solutions with a low environmental impact that fit the needs of
Ferronordic’s customers. In addition, the transformation can lead to new
partnerships and solutions for the transport, freight and construction
industries. Ferronordic’s products and services are often linked to critical
infrastructure projects, which means that there are strict requirements
on quality and sustainability. Both public and private actors are placing
ever-higher demands on reducing CO
2
emissions and protecting human
rights and biodiversity. This is an advantage for companies that conduct
active sustainability work, which is integral to Ferronordic’s business
activities.
Circular offering
Ferronordic’s business model includes maintaining, repairing and
renovating machines and components that customers buy or currently
operate. This is good resource management that supports improved
financial performance and reduced environmental impact for the cus-
tomers. Ferronordic’s IT solutions also make it possible to plan service
and maintenance efficiently, thereby reducing the risk of unplanned
downtime, which is associated with resource waste, additional costs and
loss of revenue for customers. Ferronordic also offers operator and fleet
management training to help customers efficiently utilise their machines
and other equipment and to minimise environmental impact.
To drive incremental improvements in its environmental perfor-
mance, Ferronordic has established a KPI and will develop long-term
targets for sustainable customer offerings. The KPI include training
on how to use the machines in an environmentally sustainable way,
remanufactured and rebuilt units, and sales of electric vehicles. The KPI
is designed to include more products and services over time. The share
of sustainable offerings sold in 2022 was 4.63%. Our target for 2022 was
6%.
Sustainable offer
By a sustainable offer, we mean products and services with minimum emissions (given the tech no-
logy) and resource waste, both in production and for the customer, that enable maximum recycling.
KLAR
Sustainable offerings KPI 2022 2021
Share of total sales, % 4.63 0.95
Sustainability
Ferronordic’s
sustainability approach
In line with
international standards
Transparency
Planet first
Fair workplace
Sustainable offer
Sustainability risks
Outlook for 2023
EU Taxonomy
KPI index
45
FERRONORDIC ANNUAL REPORT 2022
Introduction
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual report
Sustainability risks
Risk mapping
To identify and calibrate sustainability risks, Ferronordic carried out a renewed risk
survey in 2021 on the industries and countries in which it operates. Most of the
survey was carried out with internal resources, but it was also complemented by
an external consulting firm to ensure that risks were not overlooked or underesti-
mated. The mapping of sustainability risks is linked to Ferronordic’s overall process
for risk management.
Risk management
Our risk review and management process, which includes sustainability areas,
is performed by Ferronordic’s internal audit and control. In this process, business
managers and area experts work together with Ferronordic’s risk officer to identify,
describe and manage risks. The level of risk and the implementation of controls
are reported by the employees responsible for the relevant risks. The risks and
controls are reviewed annually. During 2022, the Group’s risk management
process has included Sweden, Kazakhstan and Russia. Following the sale of
Ferronordic’s Russian business, Russia will no longer be part of the risk manage-
ment process. We plan to include Germany in the group process in the near future.
Germany’s inclusion was scheduled for 2022 but was not made possible due to a
lack of internal resources.
KLAR
Sustainability
Ferronordic’s
sustainability approach
In line with
international standards
Transparency
Planet first
Fair workplace
Sustainable offer
Sustainability risks
Outlook for 2023
EU Taxonomy
KPI index
46
FERRONORDIC ANNUAL REPORT 2022
KLAR
• Sustainable transport solution – In 2023, we plan to launch our sustainable
transport solution and make further investments in electric trucks and charging
stations.
• Mapping of the value chain’s climate footprint - In 2023, Ferronordic intends
to continue mapping the company’s CO
2
footprint throughout the value chain.
The work will initially focus on procuring consistent data for purchased products
and logistics, both of which are sources of CO
2
emissions.
• Impact assessment of climate change - In 2023, Ferronordic intends to con-
tinue an in-depth impact assessment of climate change to understand to what
extent it will be affected and how it can mitigate the effects of climate change.
• Preparations for due diligence on human rights - Awareness of human rights
is increasing among companies worldwide. The issue is central to both consumers
and interest groups. Focus is mainly on the supply chain, where the most signif-
icant challenges are. More regulations are also expected at the national and EU
levels to ensure that companies adequately deal with human rights issues. In
2021, Ferronordic began identifying and resolving gaps in the Company’s
procurement process. The Company reviews the sustainability obligations asso-
ciated with procurement. The procurement policy and the procurement process
are areas that will be further developed in 2023. Ferronordic will also review
other parts of the value chain with risks linked to human rights.
• Corporate Sustainability Reporting Directive (CSRD) - In 2023, preparations
will begin for the transition to reporting in accordance with the EU’s new directive
for sustainability reporting, CSRD.
Outlook for 2023
Sustainability
Ferronordic’s
sustainability approach
In line with
international standards
Transparency
Planet first
Fair workplace
Sustainable offer
Sustainability risks
Outlook for 2023
EU Taxonomy
KPI index
Introduction
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual report
47
FERRONORDIC ANNUAL REPORT 2022
Introduction
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual report
EU Taxonomy
Ferronordic is covered by the Taxonomy regulation, including the Climate Delegated Act with
associated Annexes I and II. In comparison to 2021, an extended analysis of Ferronordic’s
operations in relation to the Taxonomy has been carried out in 2022.
The assessments for Taxonomy-eligibility and Taxonomy-alignment are based on
the best interpretation of the Taxonomy Regulation, the Climate Delegated Act and
the currently available guidelines from the European Commission. NACE codes
were analysed and economic activities, not registered according to the NACE
system but associated with Ferronordic’s operations, were screened. The results of
identified economic activities can be found in the tables presented below.
We assessed for substantial contribution and ‘do no significant harm’ criteria
for all identified economic eligible activities to determine their alignment in relation
to the taxonomy regulation. The alignment was determined for the climate
change mitigation objective. As presented in the table below, the result shows that
Ferronordic currently does not meet the requirements for alignment for identified
economic activities.
Accounting principles
To estimate the proportion of Taxonomy-eligible activities, Ferronordic included the
IFRS-based accounting amounts related to such activities in the revenue, capital-
and operational expenditure numerators against the corresponding total revenue,
capital- and operational expenditure amounts in the denominators.
The total turnover is Ferronordic’s total sales and rental income in 2022, which
includes the IFRS 15 and the IFRS 16 income according to the EU Taxonomy turn-
over definition. The total CapEx is the Group’s total capital expenditure in 2022,
as presented in the line of additions, excluding goodwill additions, in Note 11,
Property, plant and equipment. The total OpEx covers the maintenance expens-
es, short-term lease costs, non-capitalised research and development costs, and
repair and maintenance costs at the Group level.
Nothing has been double counted. The risk of double counting is reduced
because Ferronordic only reports against the taxonomy’s first environmental goal,
“Climate change mitigation”.
Sustainability
Ferronordic’s
sustainability approach
In line with
international standards
Transparency
Planet first
Fair workplace
Sustainable offer
Sustainability risks
Outlook for 2023
EU Taxonomy
KPI index
48
FERRONORDIC ANNUAL REPORT 2022
Introduction
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual report
Substantial contribution criteria DNSH criteria (Does Not Significantly Harm)
Economic activities (1)
Code(s) (2)
Absolute turnover (3)
Proportion of turnover (4)
Climate change mitigation (5)
Climate change adaptation (6)
Water and marine resources (7)
Circular economy (8)
Pollution (9)
Biodiveristy and
ecosystems (10)
Climate change
mitigation (11)
Climate change
adaptation (12)
Water and marine
resources (13)
Circular economy (14)
Pollution (15)
Biodiversity and
ecosystems (16)
Minimum safeguards (17)
Taxonomy-
aligned
proportion
of turnover,
year N (18)
Taxonomy-
aligned
proportion
of turnover,
year N-1 (19)
Category
(enabling
activity) (20)
Category
(transitional
activity) (21)
SEK % % % % % % % Y/N Y/N Y/N Y/N Y/N Y/N Y/N Percent Percent Enabling Transitional
A. TAXONOMY-ELIGIBLE
ACTIVITIES %
A.1. Environmentally sustainable
activities (taxonomy-aligned)
Turnover of environmentally
sustainable activities (taxonomy-
aligned) (A.1)
0 0 0
A.2 Taxonomy-eligible but not
environmentally sustainable
activities (not taxonomy-
aligned activities)
Electricity generation using solar
photovoltaic technology
4.1 220,000 11.15
Freight transport services by road 6.6 28,600 1.45
Turnover of taxonomy-eligible but
not environmentally sustainable
activities (not taxonomy-aligned
activities) (A.2)
248,600 12.60
Total (A.1 + A.2) 248,600 13 13
B. TAXONOMY-NON-ELIGIBLE
ACTIVITIES
Turnover of taxonomy-non-eligible
activities (B)
1,972,751,400 100
Total (A+B) 1,973,000,000 100
Turnover
Sustainability
Ferronordic’s
sustainability approach
In line with
international standards
Transparency
Planet first
Fair workplace
Sustainable offer
Sustainability risks
Outlook for 2023
EU Taxonomy
KPI index
49
FERRONORDIC ANNUAL REPORT 2022
Introduction
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual report
CapEX
Substantial contribution criteria DNSH criteria (Does Not Significantly Harm)
Economic activities (1)
Code(s) (2)
Absolute CapEx (3)
Proportion of CapEx (4)
Climate change mitigation (5)
Climate change adaptation (6)
Water and marine resources (7)
Circular economy (8)
Pollution (9)
Biodiveristy and
ecosystems (10)
Climate change
mitigation (11)
Climate change
adaptation (12)
Water and marine
resources (13)
Circular economy (14)
Pollution (15)
Biodiversity and
ecosystems (16)
Minimum safeguards (17)
Taxonomy-
aligned
proportion
of CapEx,
year N (18)
Taxonomy-
aligned
proportion
of CapEx,
year N-1 (19)
Category
(enabling
activity) (20)
Category
(transitional
activity) (21)
SEK % % % % % % % Y/N Y/N Y/N Y/N Y/N Y/N Y/N Percent Percent Enabling Transitional
A. TAXONOMY-ELIGIBLE
ACTIVITIES
A.1. Environmentally sustainable activities
(taxonomy-aligned)
CapEx of environmentally sustainable
activities (taxonomy-aligned) (A.1)
0 0 0
A.2 Taxonomy-Eligible but not
environmentally sustainable
activities (not taxonomy-
aligned activities)
Electricity generation using solar photo-
voltaic technology
4.1 1,400,000 2.69
Infrastructure enabling low-carbon road
transport and public transport
6.15 4,400,000 8.46
Freight transport services by road 6.6 2,700,000 5.19
Installation, maintenance and repair
of energy efficiency equipment
7.3 704,000 1.35
CapEx of taxonomy-eligible but not
environmentally sustainable activities
(not taxonomy-aligned activities) (A.2)
9,204,000 18
Total (A.1 + A.2) 9,204,000 18 18
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
CapEx of taxonomy-non-eligible activities (B) 42,796,000 82
Total (A+B) 52,000,000 100
Sustainability
Ferronordic’s
sustainability approach
In line with
international standards
Transparency
Planet first
Fair workplace
Sustainable offer
Sustainability risks
Outlook for 2023
EU Taxonomy
KPI index
50
FERRONORDIC ANNUAL REPORT 2022
Introduction
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual report
Substantial contribution criteria DNSH criteria (Does Not Significantly Harm)
Economic activities (1)
Code(s) (2)
Absolute OpEx (3)
Proportion of OpEx (4)
Climate change mitigation (5)
Climate change adaptation (6)
Water and marine resources (7)
Circular economy (8)
Pollution (9)
Biodiveristy and
ecosystems (10)
Climate change
mitigation (11)
Climate change
adaptation (12)
Water and marine
resources (13)
Circular economy (14)
Pollution (15)
Biodiversity and
ecosystems (16)
Minimum safeguards (17)
Taxonomy-
aligned
proportion
of OpEx,
year N (18)
Taxonomy-
aligned
proportion
of OpEx,
year N-1 (19)
Category
(enabling
activity) (20)
Category
(transitional
activity) (21)
SEK % % % % % % % Y/N Y/N Y/N Y/N Y/N Y/N Y/N Percent Percent Enabling Transitional
A. TAXONOMY-ELIGIBLE
ACTIVITIES
A.1. Environmentally sustainable activities
(taxonomy-aligned)
OpEx of environmentally sustainable
activities (Taxonomy-aligned) (A.1)
0 0 0
A.2 Taxonomy-eligible but not
environmentally sustainable activities
(not taxonomy-aligned activities)
Freight transport services by road 6.6 5,720 0.002
Installation, maintenance and repair
of energy efficiency equipment
7.3 66,000 0.02
OpEx of taxonomy-eligible but not
environmentally sustainable activities
(not taxonomy-aligned activities) (A.2)
71,720 0.02
Total (A.1 + A.2) 71,720 0.02 0.02
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
OpEx of taxonomy-non-eligible activities (B) 83,928,280 99.91
Total (A+B) 84,000,000 100
OpEX
Sustainability
Ferronordic’s
sustainability approach
In line with
international standards
Transparency
Planet first
Fair workplace
Sustainable offer
Sustainability risks
Outlook for 2023
EU Taxonomy
KPI index
51
FERRONORDIC ANNUAL REPORT 2022
Introduction
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual report
KPI index
Indicator Market Unit 2019 2020 2021 2022 2022 vs. 2021 YoY
Number of Board members Group # 6 6 7 6 -14%
Number of Board meetings per year Group # 10 14 9 16 78%
Board meeting attendance Group % 93 98 100 98 -2%
Women members of Board Group % 17 17 29 33 14%
Nationalities present in Board Group # 1 1 1 1 0%
Independent members of Board Group # 4 4 5 4 -20%
Electricity consumption Group MWh 2,123 2,501 3,250 4,186 29%
Fuel consumption Group 1,000 l 12,894 14,140 25,589 29,072 14%
Flight miles Group 1,000 km 9,980 3,549 8,034 6,780 -16%
CO
2
emissions related to flights Group tons 1 115 385 878 879 0%
Share of electronic trucks sold Group % 1.2
Electricity rate (MWh/revenue) Group % 3.2 2.8 -11%
Renewable energy share Group % 0 0 0 0 0%
Articulated haulers Group # 3 16 14 -13%
Engines Group # 15 38 22 -42%
Gearboxes Group # 19 50 35 -30%
Other components Group # 45 158 145 -8%
Incineration Group % 28 26 -7%
Tires Group % 26 22 -15%
Metal Group % 10 10 0%
Oil Group % 10 14 40%
Plastic Group % 9 9 0%
Carton Group % 7 8 14%
LED batteries Group % 7 7 0%
Paper Group % 1 2 100%
Glass Group % 1 1 0%
Wood Group % 1 1 0%
Electronic waste Group % <1 <1 0%
Fluorescent lamps Group % <1 <1 0%
Sustainability
Ferronordic’s
sustainability approach
In line with
international standards
Transparency
Planet first
Fair workplace
Sustainable offer
Sustainability risks
Outlook for 2023
EU Taxonomy
KPI index
52
FERRONORDIC ANNUAL REPORT 2022
Introduction
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual report
Indicator Market Unit 2019 2020 2021 2022 2022 vs. 2021 YoY
Lost Time Injury Frequency Rate Ru/CIS # 2 19.11 856%
Accidents at work (minor) Group # 1 1 24 50 108%
Accidents at work (major) Group # 4 3 5 16 220%
Fatalities Group # 0 0 0 1 100%
Personal protective equipment Ru/CIS MRUB 28.2 27.1 42.8 45.5 6%
ISO 45001 Certification Ru/CIS Y/N Y Y Y Y
ISO 14001 Certification Ru/CIS Y/N Y Y Y Y
ISO 9001 Certification Ru/CIS Y/N Y Y Y Y
Internal HSE inspections Ru/CIS # 52 15 72 113 57%
Number of violations discovered Ru/CIS # 618 315 855 1,071 25%
Number of violations closed on time Ru/CIS % 60 67 100 95 -5%
Safety walks Ru/CIS # 1,480 655 1,104 1,208 9%
Near-miss Ru/CIS # 169 48 129 114 -12%
Closed Near-miss reportings Ru/CIS % 0 -1 1 1 0%
Near-miss frequency rate Ru/CIS # 9 8 -11%
Safety training Group hrs 9,344 4,282 6,810 33,644 394%
Anti-corruption training Group hrs 1,239 1,556 1,930 2,302 19%
Anti-corruption training/employee Group hrs/# 1.04 1.06 1.08 1.14 6%
Reported whistle-blower incidents Group # 1 2 2 4 107%
Whistle-blower incidents which led to action Group # 1 0 1 0 -100%
Number of employees at end of year Group # 1,189 1,469 1,791 1,842 3%
Employee turnover Group % 13 15 14 15 7%
Average age of employees at end of year Group # 37 39 39 39 0%
Proportion of female/male employees Group % 13 10 13 15 15%
Proportion of female/male employees in executive management Group % 11 16 15 20 33%
Proportion of female/male employees in management Group % 11 17 20 20 0%
Nationalities in workforce Group # 7 19 20 23 15%
Diversity (employees of diverse backgrounds/average total headcount) Group % 21 24 14%
Vacancies announced internally in year Group % 88 93 93 90 -3%
Vacancies filled internally in year Group % 60 20 25 20 -20%
Internal promotions made in year Group # 268 187 273 148 -46%
Training hours provided in year Group hrs 56,954 49,761 61,027 57,227 -6%
Total training hours per Employee Group h/# 48 34 34 36 6%
Work-related serious accidents or fatalities in year Group # 4 3 5 7 40%
Sick-days in year Group # 3,097 7,189 10,502 18,797 79%
Average number of sick-days per employee Group # 2.6 4.9 5.9 10.3 75%
Number of partners that signed a Code of Conduct Group # 4 5 25%
Number of partners that signed a policy on Human Rights Group # 4 4 0%
Share of sustainable offerings sold Group % 0.95 4.63 387%
KPI Index, cont.
Sustainability
Ferronordic’s
sustainability approach
In line with
international standards
Transparency
Planet first
Fair workplace
Sustainable offer
Sustainability risks
Outlook for 2023
EU Taxonomy
KPI index
54
FERRONORDIC ANNUAL REPORT 2022
Sustainability The shareIntroduction
Market outlook
& operations
Corporate
governance
Formal
annual report
The share
The Ferronordic share
Ferronordic’s shares have been listed on Nasdaq Stockholm since October 2017.
On 31 December 2022, the share price was SEK 76.70, which is a decrease of
77,2 percent compared to the previous year. This corresponds to a decrease in
the market capitalisation of the Company to SEK 1,114m (4,897). The listing refers
to all shares in Ferronordic AB (publ), which is the Parent Company of the Group.
The shares are traded in the Small segment and belong to the Industrial Goods
and Services sector. The ticker is FNM and the ISIN-code is SE0005468717.
Turnover and stock price development
In 2022, 40,492,661 shares (9,267,690) were traded at a total value of
SEK 2,929m (2,271). The average turnover was 160,050 shares (36,631) for
SEK 11.6m (9.0) per trading day. All listed shares are traded on Nasdaq Stockholm.
Share capital
Ferronordic has only one class of shares: ordinary shares. The number of shares
on 31 December 2022 was 14,532,434. Each share carries one voting right at the
Annual General Meeting. At the end of the year, Ferronordic owned 0 shares (0).
Dividend policy and dividend
In February 2021, the Board adopted a new dividend policy. According to this
policy, Ferronordic’s ambition is to distribute at least 50 percent of the net profit if
the net debt / EBITDA is less than 1.0 x (after the dividend) and to distribute at least
25 percent of the net profit if the net debt/EBITDA is more than 1.0 x. In addition, the
Board considers other factors when the level of dividend is proposed, including legal
requirements, the Articles of Association, the Group’s expansion opportunities, the
Company’s financial position and investment needs. For the AGM in 2023, the Board
proposes a dividend of 7.5/share.
Ownership
On 31 December 2022, the number of shareholders amounted to 12,248 (9,611).
Foreign ownership amounted to 33 percent (29). Among the ten largest shareholders,
a few changes took place in 2022. Avanza Pension, AltoCumulus and Nordnet
Pension increased their holdings while Swedbank Robur and Unionen decreased
their positions. Other changes are of a minor nature.
The Ferronordic share
Data per share (SEK) 2022 2021 2020 2019 2018
Operating profit 17.0 33.2 22.6 24.6 18.8
- after full dilution 17.0 33.1 22.6 24.6 18.8
Profit 30.3 23.3 15.3 17.3 13.2
- after full dilution 30.3 23.3 15.3 17.3 13.2
Operating cash flow 14.8 31.5 47.7 -22.7 10.4
- after full dilution 14.8 31.5 47.7 -22.7 10.4
Equity 128.9 75.8 55.5 61.3 45.1
- after full dilution 128.9 75.8 55.5 61.3 45.1
Stock price by year end 76.70 337 157 163 127
Highest share price 367.50 359 173 167 163
Lowest share price 28.15 154 73 125 113
Dividend
1
7.5 - 7.5 4.3 3.8
1
The Board’s proposal 2022.
Significant shareholders as at end of 2022
*
Shareholders
Number of
shares
Share of capital
and votes, %
1. Skandinavkonsult i Stockholm AB
**
2,250,000 15.5
2. Avanza Pension 1,138,231 7.8
3. Lars Corneliusson (directly and through companies) 926,590 6.4
4. AltoCumulus 714,100 4.9
5. Per Arwidsson and associated persons 492,125 3.4
6. Nordnet Pension 471,045 3.2
7. SEB Life International 300,000 2.1
8. PEG Capital Partners AB 300,000 2.1
9. Magallanes Value Investors 216,196 1.5
10. Handelsbanken Nordex Index Criteria 191,574 1.3
Other shareholders 7,532,573 51.8
Total 14,532,434 100.0
*
Euroclear 31 December 2022 and thereafter known changes.
**
Associated persons of Håkan Eriksson.
55
FERRONORDIC ANNUAL REPORT 2022
Sustainability The shareIntroduction
Market outlook
& operations
Corporate
governance
Formal
annual report
The share
The Ferronordic share
Share-based incentive program
At Ferronordic’s Extraordinary General Meeting on 15 December 2022, share-
holders resolved to approve an incentive program for members of the group’s ex-
ecutive and extended management. The program is intended to create long-term
incentives and align the interests of management and shareholders. The duration
of the program is three years. The program entails the issuing of a maximum of
1,178,000 warrants, or 7,5% of the Company’s outstanding number of shares, to
be distributed between approximately 19 people forming the senior management
of the Company and its subsidiaries. Subscription of shares is to be done against
cash payment to the Company of a strike price equal to SEK 65. Assuming full
allotment and subsequent subscription, the Company’s equity would increase
with approximately SEK 76,570,000. Participation in the program and subsequent
subscription requires that a participant remains an employee of the Company or its
subsidiaries.
Share capital development
Year Measure
Number of
ordinary shares
Number of ordinary
shares, of series 2
Number of A-
preference shares
Number of B-
prefer ence shares
Change in
share capital SEK
2008 New share issue 11,000 - - - 98,211
2010 New share issue 89,000 - - - 794,619
2013 Share split (100:1) 9,900,000 - - - -
2013 New share issue - 500,000 - 44,641
2017 Conversion - - -366,544 -366,544 -
2017 New share issue 1,333,333 - - - 119,044
2017 Redemption and new share issue - 3,199,101 - -366,544 252,899
2017 Redemtion of shares - - -66,728 - -5,958
2017 Conversion 3,199,101 3,199,101 - - -
2018 Redemtion of shares - - -66,728 - -5,958
Outstanding shares 31 December 2022 14,532,434 - - -
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
31-1230-1131-1030-0931-0831-0730-0631-0530-0431-0328-0230-0130-12
0
20
40
60
80
100
120
Ferronordic & OMX 2022
Volume per day/1,000 OMX 30 (Indexed at 2,420) FN AB (Indexed at 337)
57
FERRONORDIC ANNUAL REPORT 2022
The share
Corporate
governanceSustainabilityIntroduction
Market outlook
& operations
Formal
annual report
Corporate governance
Corporate governance report
The Board
Management and auditors
Corporate governance report
Ferronordic AB (publ) is a Swedish public company domiciled in Stockholm. The
Company’s shares have been listed on Nasdaq Stockholm since October 2017.
Ferronordic applies the Swedish Code of Corporate Governance (the Code). It
is the Board’s opinion that Ferronordic in 2022 has complied with the Code in
all respects and therefore has no deviations to report or explain. This corporate
governance report is not included in the formal annual report but has nevertheless
been reviewed by the Company’s auditors.
Control structure
Ferronordic has a clear framework for corporate governance. The purpose is
to achieve effective and efficient governance and to maintain and develop a
trusting relationship with the Company’s stakeholders. Shareholders exercise
their influence by participating and voting at the general meeting. Management
and responsibilities are divided between the Board and the CEO in accordance
with Swedish legislation, the Code, Nasdaq Stockholm’s listing requirements and
internal instructions and policy documents.
Shareholders
Information about Ferronordic’s share capital and owners can be found on pages
54–55.
General Meeting
The Annual General Meeting is the Company’s highest decision-making body
through which the shareholders exercise their right to make decisions regarding
the Company’s affairs. The Annual General Meeting shall be held during the first
half of the year after the end of each financial year. The Annual General Meeting
makes resolutions regarding dividends, the election of the Board members, the
election of auditors and other matters required by the Swedish Companies Act,
the Articles of Association and the Code. Notice convening a general meeting is
published in the Swedish official gazette, Post- och Inrikes Tidningar and on the
Company’s website. The fact that a notice has been issued is also announced in
Dagens Industri. Notices are also communicated to the market through press re-
leases. All shareholders are entitled to participate in the Annual General Meeting,
either in person or by proxy, provided that they are recorded in the share register
five working days prior to the Annual General Meeting and have given notice of
their participation. All shareholders are entitled to have an item dealt with at the
Annual General Meeting, provided that they inform the Board in writing early
enough so that the item can be included in the notice. At the Annual General
Meeting, shareholders also have the opportunity to ask questions to the Board and
the management.
Shareholders
General Meeting
The Board of Directors
CEO
Management
group
Auditors
Audit Committee
Group functions
Remuneration Committee
Nomination Committee
Business segment
Germany
Business segment
CIS
KLAR
58
FERRONORDIC ANNUAL REPORT 2022
The share
Corporate
governanceSustainabilityIntroduction
Market outlook
& operations
Formal
annual report
Annual General Meeting 2022
The Annual General Meeting took place on 12 May 2022 and was held without
physical presence of the participants in accordance with the Act on temporary
exemptions to facilitate the execution of general meetings and other associations
(SFS 2020:198). At the meeting, 33 percent of the shares and votes were repre-
sented in person or by proxy.
The Annual General Meeting made the following resolutions:
• to approve annual and consolidated accounts
• not to pay any dividend
• to discharge the Board members and the CEO from liability
• to determine the remuneration of the Chairman of the Board, Board members
and the auditor
• to elect Annette Brodin Rampe, Lars Corneliusson, Håkan Eriksson, Staffan
Jufors, Aurore Belfrage and Niklas Florén (all re-elected) Board members
• to elect Staffan Jufors (re-election) as Chairman of the Board
• to elect KPMG AB (re-election) as auditor
• to approve the Nomination Committee’s proposal for principles for the Company’s
Nomination Committee
• to adopt guidelines for remuneration to senior executives
Minutes and other documents from the Annual General Meeting are available at
the Company’s website www.ferronordic.com.
Extraordinary General Meeting 2022
The Extraordinary General Meeting took place on 15 December 2022 and was
held without physical presence of the participants in accordance with the Act on
temporary exemptions to facilitate the execution of general meetings and other
associations (SFS 2020:198). At the meeting, 34 percent of the shares and votes
were represented in person or by proxy.
The Extraordinary General Meeting made the following resolutions:
• to approve the incentive program for the Company’s management proposed by
the Board, including the issuance of warrants
Minutes and other documents from the Extraordinary General Meeting are available
at the Company’s website www.ferronordic.com.
Annual General Meeting 2023
Ferronordic AB’s Annual General Meeting 2023 will take place on 11 May 2023 at
Radisson Blu Hotel, Nybrokajen 9 in Stockholm. Further information is available at
the Company’s website www.ferronordic.com.
Nomination Committee
At the 2022 Annual General Meeting, the following principles were established
regarding the Nomination Committee’s appointment and composition:
• The Nomination Committee shall consist of four members
• At the end of the third quarter, the Chairman of the Board shall contact the four
largest shareholders and encourage them to appoint their respective representa-
tives to the Nomination Committee
If a member of the Nomination Committee resigns, the shareholder who appointed
the resigning member shall be asked to appoint a new member. The Chairman
of the Nomination Committee shall, unless the Nomination Committee decides
otherwise, be the member appointed by the largest shareholder. The Nomination
Committee shall act in the interests of all shareholders. Its duties also include
evaluating the composition and work of the Board and submitting proposals for the
Annual General Meeting regarding:
• election of chairman for the AGM
• decision on the number of Board members
• election of the Board and the Chairman of the Board
• election of auditor (in collaboration with the Board’s audit committee)
• remuneration of Board members, Board committees and auditors
• determination of principles regarding the Nomination Committee for the next
Annual General Meeting
The Nomination Committee’s mandate applies until a new Nomination Committee
has been constituted. In case of material ownership changes during the mandate
period, the Nomination Committee shall ensure that a new large shareholder is
represented in the Nomination Committee. The composition of the Nomination
Committee shall be announced no later than six months prior to the Annual General
Meeting. The members of the Nomination Committee receive no compensation
from the Company but are entitled to reimbursement for reasonable expenses.
Prior to the 2022 Annual General Meeting, the Nomination Committee consisted of
Jörgen Olsson (Chairman), representing Skandinavkonsult i Stockholm AB, Peter
Zonabend, representing Per Arwidsson and related parties, Anders Blomqvist,
representing shareholders employed by the Group, and Caroline Sjösten, repre-
senting Swedbank Robur.
The Nominations Committee for the 2023 Annual General Meeting consists of the
following persons:
• Jörgen Olsson (chairman), representing Skandinavkonsult i Stockholm AB
• Peter Zonabend, representing Per Arwidsson and related parties
• Anders Blomqvist, representing shareholders employed by the Group
• Lars Hagerud, representing Altocumulus
All members are independent of the company and management. The proposals of
the nomination committee will be made public in connection with the notice of the
Annual General Meeting, at the latest.
The Board of Directors
The Board is responsible for the Company’s organisation and the management of
the Company’s operations.
KLAR
Corporate governance
Corporate governance report
The Board
Management and auditors
59
FERRONORDIC ANNUAL REPORT 2022
The share
Corporate
governanceSustainabilityIntroduction
Market outlook
& operations
Formal
annual report
The Board’s tasks include:
• establishing goals and determine the Company’s strategy
• appointing, evaluating and, if necessary, dismissing the CEO
• ensuring that there are effective systems to follow-up and control the Company’s
operations
• ensuring that there is sufficient control over the Company’s compliance with laws
and other regulations
• ensure that the Company’s information disclosure is characterised by transparency
and is correct, relevant and reliable
The Chairman of the Board ensures that the Board’s work is conducted efficiently
and that the Board fulfils its obligations. In accordance with the Code, the Board
evaluates its work each year through a systematic and structured process consisting
of a questionnaire completed anonymously by each member. The results are
compiled by the Board’s secretary and presented to the entire Board. The result is
discussed and additional comments are added. The results of the evaluation are
documented and presented to the Nomination Committee.
Composition and work in 2022
Since the 2022 Annual General Meeting, the Board has consisted of 6 members
without deputies, all elected at the 2022 Annual General Meeting for the period up
to the 2023 Annual General Meeting. Detailed information about the Board members,
including their shareholdings and other positions, can be found on pages 62–63.
According to the Code, a majority of the Board shall be independent in relation to
the Company and the management, and at least two of the Board members who
are independent of the Company and the management shall also be independent
from the Company’s major shareholders. The Board meets these requirements as 4
out of 6 Board members are independent from the Company and management as
well as major shareholders. When composing the Board, the nomination committee
considers the Company’s diversity policy. The aim is that the board as a collective
and in accordance with the Company’s diversity policy should reflect a breadth of
knowledge and background. An even gender distribution is considered, and the last
time new Board members were elected to the Board, the percentage of the newly
elected was 50 percent women. The Board consists of 33 percent women.
Board members, independence, number of meetings and attendance
Elected
year
Independent of the
Company and company
management
Independent
of major
owners
Total
number of
meetings
Annette Brodin Rampe 2017 Yes Yes 16/16
Lars Corneliusson 2011 No No 16/16
Håkan Eriksson 2016 Yes No 16/16
Staffan Jufors 2017 Yes Yes 16/16
Aurore Belfrage 2021 Yes Yes 16/16
Niklas Florèn 2021 Yes Yes 14/16
Erik Eberhardson 2010 Yes Yes 6/6
The Group’s CFO and General Counsel attend the Board’s meetings, but without
voting rights. The General Counsel is also the Secretary of the Board.
In 2022, the Board held sixteen meetings. Over the year, the Board devoted par-
ticular focus to the following:
• The Group’s earnings and financial position
• Interim reports
• The development of the CIS and German economy and its impact on the markets
and the Group’s finances
• The development and divestment of the Russian business
• Corporate governance, risk management and internal control
• Strategy issues and business development, in particular the Group’s expansion
to Germany
• Financial matters and ESG matters
• The Board continuously evaluates the work of the CEO. At least once per year,
the Board discusses the evaluation of the CEO’s work without the presence of
the CEO or anyone else from the management
As resolved at the 2022 Annual General Meeting, the remuneration of the Board
amounted to SEK 2.5m, of which SEK 800 000 was paid to the Chairman and SEK
400 000 to each of the other directors, except for Lars Corneliusson, who was
employed by the Group. No additional compensation was paid for committee work.
Audit Committee
The Audit Committee shall ensure the quality of the financial statements, maintain
ongoing contacts with the auditors, monitor the auditors’ independence and ob-
jectivity, prepare the election of the auditors (in collaboration with the Nomination
Committee), monitor the internal control within the Group as well as dealing with
other related matters.
In 2022, the Audit Committee consisted of the following members:
• Annette Brodin Rampe
• Håkan Eriksson (Chairman)
• Niklas Floren
• Staffan Jufors
All members of the Audit Committee are independent of the Company and the
management. Except for Håkan Eriksson, all members are also independent of the
Company’s major shareholders. The members are deemed to have appropriate
knowledge and experience of matters relating to executive remuneration. In 2022,
the Audit Committee held 4 meetings. The Audit Committee convenes regularly
to review drafts of the Group’s interim reports and make recommendations to
the Board, as well as sort out any matters before the reports are prepared by
the Board. The Group’s CFO and General Counsel are usually present at these
meetings.
Remuneration Committee
The Remuneration Committee prepares matters concerning remuneration
principles, remuneration and other terms of employment, including share-related
incentive programs for the CEO and other senior executives. The committee also
monitors and evaluates ongoing and during the year completed programs for var-
iable remuneration for management and the application of these guidelines. The
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follow-up assignment also includes following up and evaluating current remuneration
structures and remuneration levels in the Group.
In 2022, the Remuneration Committee consisted of the following members:
• Aurore Belfrage
• Annette Brodin Rampe
• Håkan Eriksson
• Staffan Jufors (Chairman)
All members are independent to the Company and the management. Except
for Håkan Eriksson, all members are also independent to the Company’s major
shareholders. The members are judged to have the required knowledge and expe-
rience in matters of remuneration to senior executives. In 2022, the Remuneration
Committee held one formal meeting. In addition, the committee had continuous
discussions by email and telephone in connection with the Board’s meetings.
CEO and management
The Chief Executive Officer (CEO) is appointed by the Board and is responsible
for the day-to-day management of the Group. In addition, the CEO has a man-
agement group that in 2022 consisted of 9 people. The management convenes
on a regular basis and deals with the Group’s financial development, Group-wide
development projects, business development, leadership, recruitment and other
strategic issues. In 2022, the management consisted of:
• Lars Corneliusson, CEO
• Nadia Semiletova, Human Resources Manager
• Erik Danemar, Chief Financial Officer (Group) and Head of Investor Relations
• Dan Eliasson, General Counsel
• Henrik Carlborg, Head of Business Development
• Ceren Wende, Marketing and Communications Manager (until June 2022)
• Onur Gucum, Commercial Manager
• Anton Zhelyapov, Head of Rental, Used and Trucks business
• Martin Bauknecht, Managing Director Germany
Information about management, including age, relevant education and sharehold-
ings can be found on pages 64–65. For certain matters, executive management is
supplemented by the regional managing directors and certain other Group functions
(Extended Management Team). The Group has established functions that are
responsible for Group-wide activities, such as financial reporting, treasury, IT, com-
munications, legal, HR, purchasing, logistics, real estate, etc.
Ferronordic’s operations in Germany are divided into four regions:
• Region North (with a hub in Hanover)
• Region East (with a hub in Dresden)
• Region West (with a hub in Frankfurt)
• Region South (with a hub in Kassel)
In 2022, Ferronordic’s operations in Kazakhstan/Russia were divided into eight
regions:
• Northwest (based in St. Petersburg)
• Central (with a hub in Moscow)
• Volga (with a hub in Kazan)
• South (with a hub in Krasnodar)
• Ural (with a hub in Yekaterinburg)
• Siberia (with a hub in Krasnoyarsk)
• Far East (with a hub in Khabarovsk)
• Kazakhstan (with a hub in Almaty).
Each region had its own manager with responsibility for the operations in the
region as well as coordination and implementation of group-wide policies and
processes. Each region also had a regional board consisting of parts of the
management and the relevant regional manager.
Following the divestment of the Russian subsidiaries, the consists of only
Kazakhstan.
Remuneration to senior executives
The 2022 Annual General Meeting approved the following guidelines for remunera-
tion to the Company’s senior executives:
• Remuneration to management shall be based on current market conditions in the
markets in which Ferronordic operates and in the function in which the individual
management person operates. In addition, remuneration shall be competitive to
enable Ferronordic to attract and retain competent senior executives.
• Fixed remuneration is determined individually based on the criteria stated above
and the individual executive’s area of responsibility and performance. For senior
executives living abroad with a salary in rubles, the fixed remuneration can be
adjusted to reflect exchange rate changes.
• Management may, in addition to fixed remuneration, receive variable remuner-
ation, which must be paid upon fulfillment of predetermined and measurable
performance criteria, primarily based on the development for the entire Group
or the development for the part of the Group for which the person in question is
responsible. The variable remuneration for both the CEO and other management
personnel may not exceed 100 percent of the fixed remuneration.
• Management is entitled to customary non-monetary benefits, such as company
cars and health insurance. In addition to these benefits, company housing and
other benefits can also be offered in individual cases, such as compensation for
housing and school for executives living abroad.
• In addition to the pension benefits to which management is entitled by law, senior
executives may be offered pension benefits that are competitive in the country
where the person in question is or has resided or to which the person has a sig-
nificant connection. Pension plans must be premium-based without a guaranteed
pension level.
• Severance pay shall not exceed 12 months’ salary.
Remuneration to the CEO and other members of the management is described in
Note 29, Employees, Board and management. The Board may deviate from these
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guidelines if there are special reasons for doing so in an individual case. Remu-
neration already decided for the management that has not fallen due at the 2022
Annual General Meeting falls within the framework of the guidelines.
Auditors
The Company’s annual report and the Board and CEO’s management are reviewed
by the Company’s auditor. The audit results in a report to the Audit Committee,
where the auditor attends at least two meetings per year and in an audit report
submitted after the end of the financial year to the Annual General Meeting. The
Company’s auditor is elected at the Annual General Meeting. The current auditor is
KPMG AB, re-elected at the 2022 Annual General Meeting for the period until the
next Annual General Meeting. The authorised public accountant Mats Kåvik is the
auditor-in-charge. In addition to its assignment as auditor, KPMG has assisted Fer-
ronordic in assignments regarding tax and accounting matters. The compensation
paid to KPMG is described in Note 30, Auditors’ fees and expenses.
Report on internal control
According to the Swedish Companies Act and the Code, the Board is responsible for
ensuring that the Company has good internal control. The Board shall also ensure
that the Company has formalised routines to ensure that established principles for
financial reporting and internal control are complied with and that the Company’s
financial reports are prepared in accordance with law, applicable accounting stand-
ards and other requirements for listed companies.
Control environment
The control environment constitutes the basis for the internal control as well as
the corporate culture that exists within the Group and within which the Group’s
managers and employees are operating. The control environment is built around
the Group’s policies and procedures, as well as the Group’s divisions of respon-
sibilities and authorities. The Group’s Code of Conduct is an important document
that aims to ensure that the organisation is characterised by integrity and good
morals and ethics. Important documents for internal control over financial reporting
include the Group’s financial handbook, with instructions for accounting and
reporting, and the Group’s financial policy. The Group’s responsibility and authority
structure is established in the Board’s instructions to the CEO and in the Group’s
signature policy, including authorisation and approval levels for different areas. The
Group’s insider policy regarding insider matters and the Group’s information policy
regarding external communication and press releases are other important policies
and guidelines that aim to ensure proper internal control.
Risk assessment
Ferronordic has established an annual process for reviewing and assessing the
Group’s risks relating to financial reporting. The risk assessment also includes risks
related to fraud and other irregularities, as well as the risk of loss or misappropriation
of assets. Identified risks are prioritised and actions to manage and mitigate the iden-
tified risks are established. The risk assessment also forms the basis for the Board’s
annual plan for internal audit, through which risks related to financial reporting are
evaluated on an ongoing basis. Based on the risk assessment, the Group’s rules are
evaluated continuously. The Board is updated continuously on material risks as well
as actions planned or taken to manage and mitigate such risks.
Control activities
The purpose of the control activities is to identify and prevent errors and guarantee
the quality of financial reporting. Based on the risk assessment, various control
activities have been established. These aim to ensure that the requirements on
the external financial reporting are fulfilled. The activities are both manual and
automatic and include e.g. reviews and approvals of various types of transactions,
analysis of key figures, verification of accounts and checklists and the application
of controls for financial information in the IT systems used for the financial report-
ing. In addition, the Board and its audit committee, as well as management and the
Group’s internal audit function, constitute the general control bodies that carry out
various control measures.
Information and communication
The annual report, year-end report, interim reports and current information are
prepared in accordance with law and practice. The provision of information shall be
reliable and characterised by transparency and openness. Information on the poli-
cies and procedures regarding financial reporting is given to all relevant employees
at the beginning of their employment. Subsequent updates of applicable policies and
procedures are communicated on an ongoing basis to all relevant employees. Poli-
cies and procedures regarding financial reporting are also available on the Group’s
intranet, available to all employees. The Board regularly receives financial updates
and reports. Financial information can only be communicated by the CEO or CFO.
Monitoring
All process descriptions, policies and control documents are updated as needed.
In addition, all policies are reviewed once a year. The Company’s financial devel-
opment is reviewed at every Board meeting. All interim reports, the annual report
and the administration report are also reviewed and approved by the Board before
they are made public. The efficiency of the assessment and management of risks
are followed up at various levels within the Group, including during the management
group’s meetings and regional board meetings as well as within the internal audit pro-
cess. The monitoring includes both formal and informal processes, e.g. comparisons
between result and budget, monthly reviews of overdue accounts receivable etc.
Internal audit
Ferronordic has established an internal audit function. The role of the internal audit
function is to independently and objectively assess and improve the efficiency of
Ferronordic’s internal control, risk management and governance processes. The
head of internal audit reports functionally to the audit committee and administra-
tively to the CEO. The internal audit function carries out regular reviews based on
an annual internal audit plan, established by the Board based on the Group’s risk
assessment.
Stockholm, April 2023
The Board of Directors
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Staffan Jufors Annette Brodin Rampe Lars Corneliusson
Function Chairman of the Board, Chairman of the
Remuneration Committee and member of
the Audit Committee.
Board member and member of the
Remuneration Committee and Audit
Committee.
Board member.
Nationality/born Swedish citizen. Born 1951. Swedish citizen. Born 1962. Swedish citizen. Born 1967.
Member since 2017 2017 2011
Education Master’s degree in business administration. M.Sc. in Chemical Engineering. M.Sc. in Business Administration.
Other assignments Board member of the Nordens Ark
foundation.
CEO of ImagineCare AB, board chairman
of Storskogen Group AB, board member of
PION Group AB and Episurf Medical AB.
Previous assignments
and positions
CEO of Volvo Trucks, CEO of Volvo Penta
and board member of Akelius Residential
Property AB, ÅF AB, Uniflex AB and
Haldex AB.
CEO of the International English School.
Board member of Peab AB, HerCare AB,
Enströmgruppen AB and Stillfront Group AB.
CEO of Volvo Group in Russia and Head
of Hifab’s operations in Russia.
Shares in Ferronordic 90,000 2,000 926,590 shares and 216,000 warrants
(private and through companies).
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Håkan Eriksson Aurore Belfrage Niklas Florén
Function Board member, Chairman of the Audit
Committee and member of the
Remuneration Committee.
Board member. Board member and member of the Audit
Committee.
Nationality/born Swedish citizen. Born 1962. Swedish citizen. Born 1979. Swedish citizen. Born 1974.
Member since 2016 2021 2021
Education M.Sc. in Business Administration. Master of Business Administration. M.Sc. in Computer Science and Engineering.
Other assignments Board member of Skandinavkonsult i
Stockholm AB, Skandinavkonsult Holding i
Stockholm AB, Nivika Fastigheter AB, DWG
Sweden AB, Joheco AB and Winefinder AB.
Several board assignments (incl. My
Telescope, Bubbleroom and Söderhub.
com) and roles as investor in start-up
companies in the technology sector.
CEO for WirelessCar.
Previous assignments
and positions
Board chairman and CEO of Kapitalkredit
Sverige AB and board chairman of ClearCar
AB.
Head of early stage EQT Ventures, co-
founder Wrapp, columnist SvD Näringsliv.
Several positions within Sigma IT &
Management and Volvo IT.
Shares in Ferronordic 2,250,000 (through companies). - 50
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Management and auditors
Lars Corneliusson Nadia Semiletova Henrik Carlborg Erik Danemar Dan Eliasson
Function President and CEO. Human Resources Director. Business Development Director. Group CFO and Head of Investor
Relations.
General Counsel and Head of
Treasury.
Nationality/born Swedish citizen. Born 1967. Russian citizen. Born 1979. Swedish citizen. Born 1975. Swedish citizen. Born 1976. Swedish citizen. Born 1971.
Education M.Sc. in Business Administration. Studies in Organisational Man-
agement.
LL.M. MBA (LBS) and BAs in Economics
& Management and International
Business.
Master’s degree in law and
financing.
Previous assignment
and positions
CEO of Volvo Group in Russia
and Head of Hifab’s operations in
Russia.
Leading positions at British Petrol
and Shell.
Consultant with a focus on M&A
transactions. Partner at Hannes
Snellman Attorneys at Law.
Senior positions for EF Education
First, Black Earth Farming and
Deutsche Bank in Russia.
Associate Lawyer at Linklaters.
Senior positions for Nordea, Swed-
bank, Ikea and Catella in Russia.
Shares in Ferronordic 926,590 shares and 216,000
warrants (private and trough
companies).
3,770 shares and 107,500
warrants.
137,000 shares and 107,500
warrants.
30,000 shares and 107,500
warrants.
19,961 shares and 182,500
warrants.
Employed since 2011 2010 2013 2019 2020
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Onur Gucum Anton Zhelyapov
Function Commercial Director. Director of rental and used business.
Nationality/born Turkish citizen. Born 1973. Belarusian citizen. Born 1977.
Education B.Sc. in Economics and
Mathematics.
MBA at Stockholm School of
Economics.
Previous positions COO of Zeppelin Caterpillar in
Russia and various positions within
the Volvo Group.
Various positions at Volvo Trucks.
Shares in Ferronordic 92,000 warrants. 768 shares and 107,500 warrants.
Employed since 2012 2015
Auditor
At the AGM 2022, KPMG was re-elected as the Company’s
auditor with Mats Kåvik (born 1962) as auditor-in-charge and
without a deputy auditor, for a term of office until the next
AGM. Mats Kåvik is an authorised public accountant and
a member of FAR (the professional institute for authorised
public accountants in Sweden).
Management and auditors, cont.
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The Board of Directors of Ferronordic AB (publ), corporate registration number
556748-7953 (the “Parent Company”), hereby presents its annual report and
consolidated financial statements for the financial year 2022. Unless otherwise
stated, all amounts are indicated in SEK m (SEK m). Amounts in brackets refer to
the financial year 2021, unless otherwise stated.
The business
The Parent Company (together with its subsidiaries referred to as the “Group” or
“Ferronordic”) is a Swedish public limited liability company with its seat in Stockholm.
The Parent Company is the holding company of the Group and provides financing,
support and management services for the Group’s operational companies. To a cer-
tain extent, the Parent Company purchases goods that are resold to the subsidiaries.
The Parent Company is also the holder of the ”Ferronordic” trademark.
The Group was created in 2010 to acquire and operate Volvo CE’s distribution
business in Russia. In connection therewith, the Group was appointed the official
dealer for Volvo CE in Russia. The Group was subsequently also appointed
authorised dealer and service partner for Sandvik, Rottne, Dressta, Mecalac, Terex
and certain other brands for all or parts of Russia. Since then, the Group’s business
has expanded and changed. In 2019, Ferronordic became the official dealer for
Volvo CE and Mecalac in Kazakhstan. In 2020, Ferronordic became the official
dealer for Volvo Trucks and Renault Trucks in parts of Germany. Following the
conflict in Ukraine in, the Group sold its Russian subsidiaries at the end of 2022 for
a price close to the net asset value. As a result, Ferronordic in all material respects
Directors’ report
left Russia. The sale of the Russian business has not affected the Group’s remaining
operations in Kazakhstan and Germany.
Since 2020, the Group recognised two reportable operating segments:
Germany and Russia/CIS. Following the sale of the Group’s Russian business at
the end of 2022, the Group recognises the reportable segments as Germany and
CIS. Kazakhstan is currently the only market in the CIS segment (see also Note 6,
Segment reporting and revenue on page 89).
Ferronordic’s operations consist of selling new and used trucks and construc-
tion equipment, spare parts and attachments and providing service of equipment,
technical support and other professional services. In Russia, the Group also pro-
vided contracting services, where the Group owned, serviced and operated equip-
ment on behalf of its customers and was paid per cubic meter and kilometre of
material transported. The ambition is to also offer contracting services in Kazakh-
stan in the future. In Germany, Ferronordic works closely with its key partners to
promote electric trucks and develop sustainable transport solutions, with payment
based on volumes and distances of goods transported.
Ferronordic’s customers of trucks in Germany include transport operators and
logistics companies of various sizes, operating in a wide range of segments includ-
ing long-haul transport, construction, last-mile delivery and communal services.
Ferronordic’s customers of construction equipment in Kazakhstan operate in
a number of different industries, such as the construction industry, the mining and
the forestry industries.
0
500
1000
1500
2000
202220212020
Q1
Q3
Revenue, SEK m
0
200
400
600
800
1000
1200
202220212020
New units delivered
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Sale of the Russian business
Ferronordic divested its Russian business at the end of 2022. The financial state-
ments for 2022 therefore exclude Russia from the consolidation. In the Group’s
income statement, comparable prior periods also exclude the Russia business.
In the Group’s balance sheet, the Russian business is excluded in the year end of
2022, but forms part of the Group’s consolidation at the year end of 2021. In the
Group’s cash flow statement, the Russian business is included in the line items
and also disclosed separately on a single line. The result from the sale is presented
in the result from discontinued operations in the Group’s income statement.
The purchase price for the sold business in Russia amounted to SEK 1,334m.
Approx. SEK 237m of this amount was used by Ferronordic AB to repay (by means
of set-off) debt to the sold Russian subsidiaries. The remaining part of the purchase
price was received in euro. For Ferronordic AB, the divestment resulted in a cash
inflow of approx. SEK 1,097m. For 2022, the result from the discontinued operations
was SEK 243m (448).
Net sales and results
In 2022, Ferronordic’s sales of new trucks and light commercial vehicles in Germany
increased by 24 percent to 992 (800), while during the same period, the market¹
declined by one percent.
In Kazakhstan, unit sales of new construction equipment increased by 11 per-
cent to 60 (54), while during the same period, the market² grew by an estimated
25 percent.
Net sales
The Group’s net sales increased by 31 percent to SEK 1,973m (1,511). Truck
and machine sales increased by 33 percent while aftermarket sales (spare parts
and service) increased by 31 percent. Net sales in other income, mainly rental
operations, increased by 3 percent. In Germany, net sales increased by 29 percent
to SEK 1,770m (1,368). Net sales in Kazakhstan increased by 42 percent in SEK
to SEK 203m (143).
Gross profit and operating profit
Gross profit for the year amounted to SEK 250m (174), an increase of 44 percent.
The gross margin increased from 11.5 to 12.7 percent. Selling and administrative
expenses increased by 18 percent but decreased as a share of net sales to
16.9 percent (18.7). Other costs were lower in 2022 than in 2021. Operating profit
increased by 321 percent from the previous year to SEK 247m (-112). The adjusted³
operating profit increased by 34 percent to SEK -74m.
Result before income tax
Net financing costs increased and result before income tax increased by 307 per-
cent to SEK 272m (-131).
Result for the year
Profit for continuing operations for the year increased by 280 percent to
SEK 197m (-109). Profit for the year including discontinued operations increased
by 30 percent to SEK 440m (339).
Earnings per share
Earnings per share before dilution amounted to SEK 30.28 (23.33). After dilution,
earnings per share were SEK 30.28 (23.26).
Cash flow and investments
Cash flow from operating activities after changes in working capital, financial
expenses and taxes decreased to SEK 215m (457). Cash flow from investing
activities amounted to SEK 521m (-370). The Group’s cash flows resulted in a net
cash position, which at the end of 2022 amounted to SEK 957m (net debt of 198).
-150
-100
-50
0
50
100
150
200
250
202220212020
Results from operating activities, SEK m
1
ACEA statistics
2
Market estimate based on data from Volvo CE
3
Adjusted here and in the rest of this report means excluding the effect of the compensation payment from Volvo of SEK 321m.
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Board signatures
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Financial position
Cash and cash equivalents on 31 December 2022 amounted to SEK 1,688m
(768). Interest-bearing liabilities (including financial leasing) amounted to
SEK 731m (966). Tangible fixed assets decreased to SEK 560m (1,006), mainly
as a result of the sale of the Group’s Russian subsidiaries. Equity on 31 December
2022 amounted to SEK 1,873m (1,101).
Dividend
At the 2022 Annual General Meeting, it was decided not to pay a dividend.
Employees
At the end of 2022, the number of full-time equivalent employees in the Group was
457 (1,791), of which 382 (284) related to Germany, 57 (1,495) to CIS and 18 (12)
occupied group functions.
Policy on remuneration for senior executives
Remuneration to the CEO and other members of the management is described in
more detail in the Corporate Governance Report and Note 29, Employees, Board
and management. The Company’s remuneration committee handles policies and
matters concerning the remuneration of the Company’s senior executive manage-
ment. The AGM adopts policies for remuneration to senior executives as and when
needed but not less frequent than every four years. The basic principles imply that
remuneration to the Company’s executives shall be based on market terms in the
markets where Ferronordic operates and the environment in which the individual
executive operates. In addition, remuneration shall be competitive in order to ena-
ble Ferronordic to attract and retain competent executives.
Fixed salaries
Fixed salaries are established individually based on the criteria specified above,
as well as the individual executive’s areas of responsibility and performance.
Variable salaries
Executives may receive variable salaries in addition to fixed salaries. Variable
salaries shall be paid upon fulfilment of predetermined and measurable perfor-
mance criteria, primarily based on the development of the Group as a whole or
the development of the part of the Group for which the individual is responsible.
Other benefits
The Company may offer its senior executives other customary benefits such as
pension plans, company cars, health insurances and allowances for expatriated
executives. Severance pay shall not exceed 12 months’ salary. The guidelines
proposed for 2023 are the same as those that applied for 2022.
Outlook
Following the sale of the Russian business at the end of 2022, Ferronordic’s focus
is on developing its current markets and investing in new growth opportunities for
the Group. In Germany, we see resilient demand for service and trucks, despite
concerns about a weaker economy. Supply constraints continue to limit market
growth. Our sales area is at the heart of Europe’s transport business and benefits
from commercial activity across industries. We also see growing interest in electric
trucks and sustainable transport solutions. Our operations in Kazakhstan continue
to develop and we actively seek opportunities to grow our product and business
portfolio, including contracting services. Demand for construction equipment is
supported by Kazakhstan’s growing role as a regional hub, its big infrastructure
projects and strong commodity prices. In a longer perspective, we believe that
the underlying conditions and business opportunities in the German and Kazakh
markets are strong. We also believe that Ferronordic has the human and capital
resources to develop new products and markets.
Shares and shareholders
Please see the section Shares and shareholders on pages 54–55.
The work of the board
Please see the Corporate Governance Report on pages 57–61.
Parent Company
In 2022, the revenue of the Parent Company decreased by 65 percent to SEK 84m
(239). Sales and administrative expenses amounted to SEK -57m (-39). The result
amounted to SEK 1,544m (427), mainly as a result of the sale of the Russian
subsidiaries.
Events subsequent to the reporting date
On 6 March 2023, the Company announced that Martin Bauknecht would step
down from the Group Executive Management Team. He will remain in his role as
managing director for the German business, reporting directly to Lars Corneliusson,
President and CEO of the Group.
On 6 April, the Company announced that Jonathan Tubb had decided to leave
his appointment as Deputy Group CFO and Member of the Executive Management
Team of Ferronordic to pursue other career opportunities. Jonathan will remain in his
position until the last of April 2023.
Proposed allocation of profit
The following amount is available for SEK
allocation by the AGM 2,056,515,744
Dividend on shares 108,993,255
Amount carried forward 1,947,522,489
of which the following to the Share Premium fund 530,809,445
Total amount allocated 2,056,515,744
Sustainability report
The Group’s sustainability report can be found on pages 37–52.
Alternative performance measurements
Definitions of alternative performance measurements are described on page 23 of
the 2022 Year-End Report.
Formal annual report
Directors’ report
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Financial reports
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Risks and uncertainties
The Group is exposed to various types of operational and financial risks. Operational risks are associated
with the Group’s daily operations and relate to, inter alia, changes in business cycles, procurement,
logistics, capacity utilisation and price risks. Business risks also include supply and demand disruptions.
Financial risks are associated with the amount of capital tied up and the Group’s long- and short-term
capital requirements, but also changes in interest rate and exchange rate movements in the currencies
to which the Group is exposed and credit risks to the Group’s customers.
Risk management
The management of operational risks consists of a large number of daily routines
and standardised processes that are regulated in policy documents, for example,
regarding the purchase of machines and parts, approvals of discounts and buy-
back offers, tendering for larger purchases, etc.
Financial risks and credit risks are managed centrally to effectively consoli-
date and balance the Group’s total risk exposure. To the greatest extent possible,
the Group uses natural hedging to reduce currency risks both in terms of matching
cash flows and balance sheet exposures across the Group. In purchase and sales
operations, the Group therefore aims to keep accounts receivable and accounts
payable in the same currency. Where possible, the Group also procures different
types of currency insurance to manage its risks.
The Group’s risk management processes have been developed over time and
are continuously evaluated and improved. It is important that the Group’s employees
consistently follow current routines and processes to ensure that operational risks
are managed efficiently. The Group conducts an annual risk analysis to evaluate
how risks have changed, to develop a culture of risk awareness and to improve
risk management.
Operational risks
Political environment and sanctions
The Group has previously had considerable exposure to Russia and its political
risk. This had a considerable impact on the Group’s operations in 2022. In connec-
tion with the sale of the Russian business at the end of 2022, this risk is no longer
relevant.
A smaller part of the Group’s operations is connected to Kazakhstan, where
the political conditions have historically been volatile. Political trends have some-
times been inconsistent, and the Kazakh government has at times been unstable.
The Kazakh political system can be vulnerable to new political trends. In
January of 2022, following sharp increases in fuel prices, Kazakhstan faced unrest
in several of its major cities. The disturbances resulted in a change of several
government positions. Changes in government policy and legislative work are less
foreseeable in Kazakhstan than in many Western countries and can disrupt or
prevent political, economic and regulatory reforms.
Russia’s military conflict in Ukraine has in some ways strained the relationship
between Russia and Kazakhstan.
Legal system and legal procedures
The legal system in Kazakhstan is relatively unstable. Some laws and regulations
are quite recent. They can contain ambiguous wording and their application can
be interpreted in different ways. In addition, there are often discrepancies between
laws and regulations at various levels.
Lack of legal or administrative guidance to interpret applicable rules, lack of
legal precedents, relatively unstable and immature legal systems, lack of inde-
pendence vis-à-vis political and commercial interests, relatively untested application
of recently adopted legislation and its impact on complex commercial agreements,
corruption in the legal system, gaps in the legal regulatory environment due to
delays in or lack of implementation of legislation, and undeveloped bankruptcy
proceedings can all affect the Group’s ability to protect and enforce its legal rights,
as well as to protect itself against legal claims.
Corruption
Media have reported on corruption in Kazakhstan. Media reports have also
described cases where government officials have initiated targeted investigations
and prosecutions to promote the interests of the government, certain individuals or
companies.
Ferronordic adheres to the Group’s code of conduct and to strict standards of
business ethics. The Group has procedures to counter risks of corruption, cases
of illegal activity, demands from corrupt officials, allegations that the Group or its
management has been involved in corruption or illegal activities and biased articles
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and negative publicity. Notwithstanding such procedures, corruption and unethical
behaviour can have adverse negative effect on the Group’s operations, earnings
and financial position.
Environmental risks
Environmental legislation may impose obligations or fines on property owners
and business operators that violate certain standards or cause certain harm to
the environment. Ferronordic strives to be a leader in terms of sustainability and
minimising its ecological footprint. No guarantees can however be given that the
Group’s properties do not contain undetected pollution or that authorities could
claim that its operations conflict with licenses or environmental regulations. New
and changing regulation could result in the Group’s properties (or properties that
have previously been owned or operated by the Group) being subjected to stricter
audits than previously. Ferronordic may become subject of claims for damages
regarding environmental liability. An unfavourable outcome of such proceedings
may result in civil, administrative or criminal law liability for the Group or its execu-
tives. Changes to laws and their application regarding the environment, health and
safety may entail costs and obligations and have adverse negative effect on the
Group’s operations, earnings and financial position.
Tax system
For information on risks associated with the German and Kazakh tax systems,
please see Note 25, Contingencies.
Variations in economic activity
The Group’s products are to a large extent used in connection with construction,
logistics and industrial operations. An economic downturn or reduced industrial
activity could lead to a significant reduction in demand for the Group’s products.
Furthermore, the Group’s markets are affected by changes in the price
of commodities as well as the market for extraction and processing of natural
resources. Declining commodity prices or a weaker market for natural resources
could therefore have an adverse effect on the Group’s operations.
The Group’s business could also be adversely affected (either temporarily
or in the long term) by a decline in customers’ expenditure and investment levels,
unfavourable credit conditions that negatively affect end customers’ financing
opportunities, reduced consumption levels, reduced investments in infrastructure
projects and increased costs for building materials. Downturns in the consumption,
construction and industrial sectors as a result of the above-mentioned or other
factors may have an adverse impact on the Group’s business, earnings and finan-
cial position. Demand for spare parts and service is less sensitive to the economic
cycle than new trucks and machine sales.
During the outbreak of the Covid-19 pandemic, authorities issued recommen-
dations and regulations to restrict mobility and social contacts to limit the spread
of the virus. Such restrictions had an adverse effect on the Group’s business.
Companies, including Ferronordic’s suppliers, competitors and customers, took
measures to adapt to an uncertain business environment. Extensive vaccination
programs reduced such risks, but one cannot exclude the risk of new outbreaks
and further disruptions on the supply or demand side of the Group’s business.
Capacity utilisation
The Group has continuously expanded its network and infrastructure. An unfore-
seen decline in capacity utilisation, e.g., as a result of economic downturn, discon-
tinuation of certain products etc., generally results in decreased sales which in the
short term cannot be offset by a corresponding cost reduction.
The collaboration with Volvo
Sales of Volvo products accounts for the absolute majority of Ferronordic’s sales.
Ferronordic is thus highly dependent on maintaining good relations with the Volvo
Group. A deterioration in such relations could have a significant adverse effect on
Ferronordic’s business.
Dependence on suppliers
The Group is dependent on strategic decisions taken by its suppliers, including
the launch of new products or the discontinuation of existing products, which could
affect the Group’s product range and sales. In the transition to a zero-emission
transport system, Ferronordic will to an extent depend on its partners ability to
deliver products that will contribute to this transformation.
Dependence on key employees
The Group is dependent on its ability to identify, recruit and retain qualified exec-
utives and other key employees. The Group’s ability to recruit and retain qualified
personnel is dependent on a number of external factors. Should key employees
leave the Group due to retirement, acceptance of employment with a competitor or
for any other reason, this may result in a loss of important know-how and experience
which may be difficult to replace, and which may delay or adversely impact the
Group’s ability to implement its business plan and strategy. Inability to recruit or re-
tain such executives and other key employees could thus have an adverse impact
on the Group’s business, result and financial position.
Price risk
The prices that Ferronordic pays for products from Volvo and other suppliers are
important for the Group’s profitability and competitiveness. Too high prices may
result in loss of sales, lost market share and/or significantly decreased profitability.
The Group strives to manage this price risk by, together with its suppliers, contin-
uously monitoring the development of price positioning and market shares, and
continuously adjusting the prices that the Group pays for machines and parts.
Insurance coverage
The insurance market in Kazakhstan is underdeveloped. Several types of insur-
ance that are common in other countries are not available or cannot be procured at
a reasonable cost. The Group holds insurance against some, but not all, risks rel-
evant to its operations. Hence, there is a risk that loss of assets or claims against
the Group may not be covered by the Group’s insurance.
Financial risks
For information about financial risks, please see Note 22, Financial instruments
and risk management.
Material disputes
No material disputes took place during the year.
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SEK m Note 2022 2021
Continuing operations
Revenue 6 1,973 1,511
Cost of sales -1,723 -1,337
Gross profit 250 174
Selling expenses 7 -140 -100
General and administrative expenses 7 -194 -182
Other income 8 337 6
Other expenses 8 -6 -9
Operating profit 247 -112
Finance income 9 2 2
Finance costs 9 -19 -18
Net foreign exchange gains/(-losses) (net) 42 -4
Result before income tax 272 -131
Income tax 10 -75 22
Result from continuing operations 197 -109
Discontinued operations
Result from discontinued operations 243 448
Result for the year 440 339
Other comprehensive income
Items that are or may be reclassified to profit or loss:
Foreign currency translation difference for foreign operations 322 60
Other comprehensive income for the year, net of income tax 322 60
Total comprehensive income for the year 762 399
Earnings per share
Basic earnings per share (SEK) 31 30.28 23.33
Diluted earnings per share (SEK) 31 30.28 23.26
Basic earning per share from continuing operations (SEK) 31 13.56 -7.53
Diluted earnings per share from continuing operations (SEK) 31 13.56 -7.50
Consolidated statement of comprehensive income
The consolidated statement of comprehensive income forms part of the consolidated nancial statements and shall be read together with the Notes thereto.
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SEK m Note 31 December 2022 31 December 2021
ASSETS
Non-current assets
Property, plant, and equipment 11 560 1,006
Intangible assets 12 85 81
Deferred tax assets 13 78 105
Total non-current assets 724 1,192
Current assets
Inventories 14 460 1,432
Trade and other receivables 15 344 535
Prepayments 1 46
Cash and cash equivalents 16 1,688 768
Total current assets 2,493 2,781
TOTAL ASSETS 3,217 3,973
Consolidated statement of financial position
The consolidated statement of nancial position forms part of the consolidated nancial statements and shall be read together with the Notes thereto.
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Consolidated statement of financial position, cont.
SEK m Note 31 December 2022 31 December 2021
EQUITY AND LIABILITIES
Equity 17
Share capital 1 1
Additional paid in capital 630 620
Translation reserve 13 -309
Retained earnings 1,229 789
TOTAL EQUITY 1,873 1,101
Non-current liabilities
Borrowings 18 393 490
Deferred income 19 22 22
Deferred tax liabilities 13 1 7
Long-term lease liabilities 18 43 97
Total non-current liabilities 459 617
Current liabilities
Borrowings 18 274 317
Trade and other payables 21 573 1,809
Deferred income 19 16 28
Provisions 20 1 39
Short-term lease liabilities 18 21 62
Total current liabilities 884 2,255
TOTAL LIABILITIES 1,344 2,872
TOTAL EQUITY AND LIABILITIES 3,217 3,973
The consolidated statement of nancial position forms part of the consolidated nancial statements and shall be read together with the Notes thereto.
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Attributable to the Parent Company’s equity holders
SEK m Note
Share
capital
Additional paid
in capital
Retained
earnings
Translation
reserve Total equity
Balance 1 January 2022 1 620 789 -309 1,101
Total comprehensive income for the year
Result for the year 0 0 440 0 440
Other comprehensive income
Foreign exchange differences 0 0 0 322 322
Total comprehensive income for the year 0 0 440 322 762
Contribution by owners
Warrant issue 17 0 10 0 0 10
Total contributions and distributions - 10 0 0 10
Balance 31 December 2022 1 630 1,229 13 1,873
Consolidated statement of changes in equity
The consolidated statement of changes in equity forms part of the consolidated nancial statements and shall be read together with the Notes thereto.
Attributable to the Parent Company’s equity holders
SEK m Note
Share
capital
Additional paid
in capital
Retained
earnings
Translation
reserve Total equity
Balance 1 January 2021 1 615 559 -369 806
Total comprehensive income for the year
Result for the year 0 0 339 0 339
Other comprehensive income
Foreign exchange differences 0 0 0 60 60
Total comprehensive income for the year - - 339 60 399
Contribution by and distribution to owners
Dividends on shares 17 0 0 -109 0 -109
Warrant issue 17 0 5 0 0 5
Total contributions and distributions - 5 -109 0 -104
Balance 31 December 2021 1 620 789 -309 1,101
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SEK m Note 2022 2021
Cash flows from operating activities
Result before income tax from continuing operations 272 -131
Result before income tax from discontinued operations 510 583
Adjustments for:
Depreciation and amortisation 11, 12 272 215
Impairment (reversed impairment) of trade receivables 8 52 10
Loss (gain on disposal of property, plant, and equipment) -4 0
Finance costs 9 95 49
Finance income 9 -24 -23
Net foreign exchange losses (gains) (net) -14 5
Cash from operating activities before changes in
working capital and provisions
Change in inventories 594 -381
Change in trade and other receivables 341 19
Change in prepayments -191 -5
Change in trade and other payables -1,470 336
Change in provisions 4 2
Change in deferred income -10 4
Cash flows from operations before interest paid and tax paid 427 683
Income tax paid -127 -170
Interest paid -85 -55
Cash flows from operating activities 215 457
of which from discontinued operations -11 415
Consolidated statement of cash flows
The consolidated statement of cash ows forms part of the consolidated nancial statements and shall be read together with the Notes thereto.
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Consolidated statement of cash flows, cont.
SEK m Note 2022 2021
Cash flows from investing activities
Proceeds from sale of property, plant and equipment 5 8
Interest received 18 23
Acquisition of property, plant and equipment -351 -247
Acquisition of intangible assets -1 -1
Acquisition of business 0 -153
Sale of subsidiary 849 0
Cash flows from investing activities 521 -370
of which from discontinued operations 682 -98
Cash flows from financing activities
Dividends 0 -109
Proceeds from borrowings 403 371
Repayment of loans -170 -118
Leasing financing paid -65 -81
Warrant issue 0 1
Cash flows from financing activities 168 64
of which from discontinued operations 195 -147
Net change in cash and cash equivalents 903 151
of which from discontinued operations 866 170
Cash and cash equivalents at start of the year 768 604
Effect of exchange rate fluctuations on cash and cash equivalents 17 13
Cash and cash equivalents at year-end 16 1,688 768
The consolidated statement of cash ows forms part of the consolidated nancial statements and shall be read together with the Notes thereto.
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SEK m Note 2022 2021
Revenue 84 239
Cost of sales -68 -203
Gross profit 16 37
Administrative expenses -57 -39
Other income 330 2
Other costs -28 0
Operating profit 261 -2
Finance income 9 1,313 433
Finance costs 9 -26 -2
Net foreign exchange gains/(-losses) (net) 58 -1
Result before income tax 1,607 427
Income tax 10 -63 0
Result for the year 1,544 427
Parent Company income statement
The income statement forms part of the consolidated nancial statements and shall be read together with the Notes thereto.
Parent Company statement of comprehensive income
SEK m Note 2022 2021
Result for the year 1,544 427
Total comprehensive income for the year 1,544 427
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SEK m Note 31 December 2022 31 December 2021
ASSETS
Non-current assets
Intangible assets 12 0 1
Financial assets
Holdings in group companies 26, 28 35 175
Loans to group companies 26 0 149
Deferred tax assets 13 0 20
Total financial assets 35 345
Total non-current assets 36 345
Current assets
Trade and other receivables 15 77 63
Prepayments 0 0
Loans to group companies 490 0
Cash and cash equivalents 16 1,543 241
Total current assets 2,111 304
TOTAL ASSETS 2,146 649
Parent Company balance sheet
The balance sheet forms part of the consolidated nancial statements and shall be read together with the Notes thereto.
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Parent Company balance sheet, cont.
SEK m Note 31 December 2022 31 December 2021
EQUITY AND LIABILITIES
Equity 17
Restricted equity
Share capital 1 1
Unrestricted Equity
Share premium reserve 640 630
Retained earnings -128 -555
Result for the year 1,544 427
TOTAL EQUITY 2,058 504
Non-current liabilities
Borrowings 0 31
Total current liabilities 0 31
Current liabilities
Trade and other payables 21 89 115
Total current liabilities 89 115
TOTAL LIABILITIES 89 145
TOTAL EQUITY AND LIABILITIES 2,146 649
The balance sheet forms part of the consolidated nancial statements and shall be read together with the Notes thereto.
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SEK m Note Share capital
Share premium
reserve Retained earnings Total equity
Balance 1 January 2022 1 630 -128 504
Total comprehensive income for the year
Result for the year - - 1,544 1,544
Total comprehensive income for the year - - 1,544 1,544
Contribution by owners
Warrant issue 17 - 10 - 10
Total contributions and distributions - 10 0 10
Balance 31 December 2022 1 640 1,417 2,058
Parent Company statement of changes in equity
The statement of changes in equity forms part of the consolidated nancial statements and shall be read together with the Notes thereto.
SEK m Note Share capital
Share premium
reserve Retained earnings Total equity
Balance 1 January 2021 1 625 -446 180
Total comprehensive income for the year
Result for the year - - 427 427
Total comprehensive income for the year - - 427 427
Contribution by and distribution to owners
Dividends on shares 17 - - -109 -109
Warrant issue 17 - 5 - 5
Total contributions and distributions - 5 -109 -104
Balance 31 December 2021 1 630 -128 504
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SEK m Note 2022 2021
Cash flows from operating activities
Result before income tax 1,607 427
Adjustments for:
Depreciation and amortisation 11, 12 0 0
Finance costs 9 26 2
Finance income 9 -1,313 -433
Net foreign exchange losses (gains) (net) -58 1
Cash from operating activities before changes in
working capital and provisions
262 -2
Change in trade and other receivables -4 -29
Change in trade and other payables -72 87
Cash flows from operations before income tax and interest paid 185 57
Income tax paid 0 0
Interest paid -1 -2
Cash flows from operating activities 184 54
Parent Company statement of cash flows
The statement of cash ows forms part of the consolidated nancial statements and shall be read together with the Notes thereto.
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SEK m Note 2022 2021
Cash flows from investing activities
Repayment of loan by subsidiary 0 3
Interest received 2 2
Dividend from subsidiary 107 429
Loan to subsidiary -286 -147
Contributions to subsidiaries 0 -11
Sale of subsidiary 1,097 0
Cash flows from investing activities 919 276
Cash flows from financing activities
Repayment of loans -31 0
Repayment of loans to subsidiaries 0 -33
Loans from subsidiaries 130 0
Loans received 0 31
Dividend 0 -109
Warrant issue 0 5
Cash flows from financing activities 99 -106
Net increase/(decrease) in cash and cash equivalents 1,202 224
Cash and cash equivalents at start of year 241 17
Effect of exchange rate fluctuations on cash and cash equivalents 100 -
Cash and cash equivalents at year-end 16 1,543 241
The statement of cash ows forms part of the consolidated nancial statements and shall be read together with the Notes thereto.
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Notes
Content of notes
Note Page
1. General information 84
2. Basis of preparation 84
3. Changed accounting policies 84
4. Significant accounting policies 85
5. Determination of fair value 89
6. Segment reporting and revenue 89
7. Selling, general and administrative expenses 91
8. Other income and expenses 92
9. Finance income and finance costs 92
10. Income taxes 93
11. Property, plant and equipment 94
12. Intangible assets 97
13. Deferred tax assets and liabilities 98
14. Inventories 101
15. Trade and other receivables 101
16. Cash and cash equivalents 101
17. Capital and reserves 102
18. Borrowings 103
19. Deferred income 105
20. Provisions 105
21. Trade and other payables 106
22. Financial instruments and risk management 106
23. Leases 111
24. Capital commitments 111
25. Contingencies 111
26. Related party transactions 112
27. Events subsequent to the reporting date 113
28. Interest in Group Companies 113
29. Employees, Board and management 114
30. Auditors’ fees and expenses 116
31. Earnings per share 116
32. Sale of subsidiaries 117
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Notes
“Ferronordic The shares in Ferronordic AB (publ) are listed on Nasdaq Stockholm,
Note 2, Basis for preparation, cont.
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Note 4, Significant accounting policies, cont.
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Note 4, Significant accounting policies, cont.
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Information about the Parent Company
Parent Company accounting principles
The annual accounts of the Parent Company are prepared in accordance with the
Swedish Annual Accounts Act and RFR 2, Accounting for Legal Entities, as issued
by the Swedish Financial Reporting Board. According to RFR 2, the Parent Com-
pany’s annual accounts shall be prepared by applying all IFRS standards adopted
by the EU insofar as this is possible under the Swedish Annual Accounts Act and
with regard to the relationship between accounting and taxation. The stated
accounting policies have been applied consistently for all periods presented.
Differences between the accounting policies applied for the Group and the
Parent Company
The Parent Company’s income statement and balance sheet are presented
according to the structure following from the Swedish Annual Accounts Act.
For the Parent Company, holdings in subsidiaries are recognised at cost (less
potential impairment losses). Expenses attributable to business combinations are
included in the cost.
Note 4, Significant accounting policies, cont.
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The Parent Company does not apply IFRS 9 Financial Instruments. However, parts
of the principles in IFRS 9 are still applicable - such as principles regarding impair-
ment, recognition/derecognition and the effective interest rate method for interest
income and interest expenses.
In the Parent Company, financial fixed assets are valued at acquisition cost
less any impairment and financial current assets according to the lower of acqui-
sition cost and fair value less cost to sell. IFRS 9’s impairment rules are applied to
financial assets that are reported at amortised cost.
The Parent Company classifies all leases as operating leases.
Shareholders´ contributions are recognised in the Parent Company’s balance
sheet as an increase of the carrying value in the shares.
Note 4, Significant accounting policies, cont.
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Note 6, Segment reporting and revenue, cont.
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Note 6, Segment reporting and revenue, cont.
PARENT COMPANY
SEK m 2022 2021
Personnel expenses 44 23
Other general and administrative expenses 12 16
57 39
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In the Parent Company other income in 2022 included compensation from Volvo
CE for termination of dealership in Russia in the amount of SEK 321m and
management fees charged from subsidiaries.
Other expenses in 2022 in the Parent Company included losses related to
divestment in Russia in the amount of SEK 28m.
PARENT COMPANY
SEK m 2022 2021
Interest income on loans to subsidiary 11 3
Dividends from subsidiary 107 429
Result from sale of subsidiary (note 32) 1,193 0
Interest income on bank deposits 2 0
Finance income 1,313 433
Interest cost on loans from subsidiary -25 -2
Other finance costs -1 0
Interest costs -26 -2
Net finance income 1,287 430
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PARENT COMPANY
SEK m 2022 % 2021 %
Result for the year 1,544 427
Total income tax -63 -
Result before tax 1,607 100 427 100
Income tax at applicable tax rate -331 -20.6 -88 -20.6
Dividends from subsidiary (non-taxable) 22 1.4 88 20.7
Result from sale of subsidiary 246 15.4 0 0.0
Non-recognised tax-loss carryforwards -0 -0.1 -0 -0.1
Other items 0 0 0 0.0
-63 -3.9 0 0.0
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Ofce
equipment Cars
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Ofce
equipment Cars
Note 11, Property, plant and equipment, cont.
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Note 11, Property, plant and equipment, cont.
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PARENT COMPANY
SEK m Office equipment
Cost
Balance 1 January 2022 0
Balance 31 December 2022 0
Depreciation and impairment losses
Balance 1 January 2022 0
Depreciation -
Balance 31 December 2022 0
Carrying amounts
Balance 31 December 2022 0
SEK m Office equipment
Cost
Balance 1 January 2021 0
Balance 31 December 2021 0
Depreciation and impairment losses
Balance 1 January 2021 0
Depreciation -
Balance 31 December 2021 0
Carrying amounts
Balance 31 December 2021 0
Note 11, Property, plant and equipment, cont.
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SEK m Software and software licenses
Balance 1 January 2021 1
Acquisitions -
Balance 31 December 2021 1
Amortisation
Balance 1 January 2021 0
Amortisation 0
Balance 31 December 2021 0
Carrying amounts
31 December 2021 1
Note 12, Intangible assets, cont.
PARENT COMPANY
SEK m Software and software licenses
Balance 1 January 2022 1
Acquisitions -
Balance 31 December 2022 1
Amortisation
Balance 1 January 2022 0
Amortisation 0
Balance 31 December 2022 0
Carrying amounts
31 December 2022
1
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PARENT COMPANY
31 December 2022
31 December 2021
SEK m Assets Liabilities Net Assets Liabilities Net
Tax loss carryforwards 20 - 20 20 - 20
Net tax assets/(liabilities) 20 - 20 20 - 20
Note 13, Deferred tax assets and liabilities, cont.
PARENT COMPANY
SEK m 1 January 2022
Recognised in
profit or loss
Recognised in
other comprehensive
income
Effect of
movement in
exchange rates 31 December 2022
Tax loss carryforwards 20 -20 - - -
Net tax assets/(liabilities) 20 -20 - - -
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PARENT COMPANY
SEK m 1 January 2021
Recognised in
profit or loss
Recognised in
other comprehensive
income
Effect of movement
in exchange rates
31 December
2021
Tax loss carryforwards 20 - - - 20
Net tax assets/(liabilities) 20 - - - 20
Note 13, Deferred tax assets and liabilities, cont.
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PARENT COMPANY
SEK m 31 December 2022 31 December 2021
Loan from subsidiary - -
- -
PARENT COMPANY
SEK m 31 December 2022 31 December 2021
Loan Nordea - 31
- 31
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Note 18, Borrowings, cont.
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Note 22, Financial instruments and risk management, cont.
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Note 22, Financial instruments and risk management, cont.
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Note 22, Financial instruments and risk management, cont.
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Note 22, Financial instruments and risk management, cont.
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Transactions with other related parties
PARENT COMPANY
Revenue
SEK m
2022
Transaction value
2021
Transaction value
Services and other income:
Subsidiaries 23 30
Interest accrued:
Subsidiaries 11 3
Equipment sold
Subsidiaries 71 211
Dividends received:
Subsidiaries 107 429
211 673
Expenses
2022
2021
SEK m Transaction value Transaction value
Interest expense:
Subsidiaries -25 -
Outstanding balances
SEK m 31 December 2022 31 December 2021
Contributions to subsidiaries 35 175
Loans to subsidiaries - 149
Short-term loans to subsidiaries 490 19
Trade and other receivables 61 43
586 386
Services provided constitute compensation from subsidiaries to the Parent
Company for the usage of the Ferronordic trademark and compensation for
sureties provided by the Parent Company to secure the subsidiaries’ obligations.
The outstanding balance as of 31 December 2022 represents accrued royalties
under an intra-group trademark license agreement.
Interest accrued relates to loans from the Parent Company to its subsidiary in
Kazakhstan.
In 2022, equipment sold related to machines from Dressta, Rottne and Mecalac
and machines and parts from Sandvik purchased by the Parent Company and sold
to the subsidiaries in Russia that were divested at the end of 2022.
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Note 29, Employees, board and management, cont.
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For the Parent Company, the result from sale of subsidiary was calculated as follows:
SEK m
Contract price 1,334
Carrying value of investment -139
Result from sale of subsidiary 1,193
Note 32, Sale of subsidiaries, cont.
The tax effect on the sale of subsidiary for Group is the same as for the Parent
Company and is presented in the income tax reconciliation for the Parent Company
in note 10, Income taxes.
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Our audit report was submitted on 13 April 2023
KPMG AB
Mats Kåvik
Authorised Public Accountant
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Auditor’s report
To the general meeting of the shareholders of Ferronordic AB (publ), corp. id 556748-7953
Report on the annual accounts and consolidated accounts
Opinions
We have audited the annual accounts and consolidated accounts of Ferronordic AB (publ) for the year 2022, except for the corporate governance statement on pages
57–61 and the sustainability report on pages 37–52. The annual accounts and consolidated accounts of the company are included on pages 37–52, 57–61 and 66–119
in this document.
In our opinion, the annual accounts have been prepared in accordance with the Annual Accounts Act, and present fairly, in all material respects, the financial position
of the parent company as of 31 December 2022 and its financial performance and cash flow for the year then ended in accordance with the Annual Accounts Act. The
consolidated accounts have been prepared in accordance with the Annual Accounts Act and present fairly, in all material respects, the financial position of the group as
of 31 December 2022 and their financial performance and cash flow for the year then ended in accordance with International Financial Reporting Standards (IFRS), as
adopted by the EU, and the Annual Accounts Act. Our opinions do not cover the corporate governance statement on pages 57–61 and sustainability report on pages
37–52. The statutory administration report is consistent with the other parts of the annual accounts and consolidated accounts.
We therefore recommend that the general meeting of shareholders adopts the income statement and balance sheet for the parent company and the statement of
comprehensive income and statement of financial position for the group.
Our opinions in this report on the the annual accounts and consolidated accounts are consistent with the content of the additional report that has been submitted to
the parent company’s audit committee in accordance with the Audit Regulation (537/2014) Article 11.
Basis for Opinions
We conducted our audit in accordance with International Standards on Auditing (ISA) and generally accepted auditing standards in Sweden. Our responsibilities under
those standards are further described in the Auditor’s Responsibilities section. We are independent of the parent company and the group in accordance with professional
ethics for accountants in Sweden and have otherwise fulfilled our ethical responsibilities in accordance with these requirements.This includes that, based on the best of
our knowledge and belief, no prohibited services referred to in the Audit Regulation (537/2014) Article 5.1 have been provided to the audited company or, where applicable,
its parent company or its controlled companies within the EU.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinions.
Key Audit Matters
Key audit matters of the audit are those matters that, in our professional judgment, were of most significance in our audit of the annual accounts and consolidated
accounts of the current period. These matters were addressed in the context of our audit of, and in forming our opinion thereon, the annual accounts and consolidated
accounts as a whole, but we do not provide a separate opinion on these matters.
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Valuation of inventory
See disclosure 14 and accounting principles on page 87 in the annual account and consolidated accounts for detailed information and description of the matter.
Description of key audit matter
The consolidated statement of financial position includes inventory amounting to
SEK 460m as at 31 December 2022.
Inventory mainly represents goods for resale with a mix of new and used
construction machines, spare parts and attachments. Inventories are measured at
the lower of cost and net realisable value. The cost of inventories is based on the
first-in-first-out method (FIFO). The net realisable value is the estimated selling
price in the ordinary course of business, less the estimated costs of completion
and selling expenses.
The valuation of inventory is presented as a key audit matter as the valuation
contain several elements of estimates and judgements from management. There
is therefore a risk that the net realisable value of inventory could be lower than the
book value and that a write-down will have an impact on the reported result.
Response in the audit
We have assessed design and implementation of controls and processes imple-
mented by the group over valuation of inventory.
We have performed the following substantive audit procedures:
• Review of Group’s model for inventory provision and assessment of the applica-
tion thereto
• Retrospective review of net realizable value of inventories estimated by the
Group as at previous reporting dates by comparing estimate to actual outcome;
• Reconciliation of write-down to net realisable value to supporting schedules and
testing of data for accuracy and completeness
• Analysis of sales with negative margin after the reporting date
• Inquiries to sales staff about possibility to sell items, which were without move-
ment for significant period of time and discount relevant to sale these items;
• Attendence at inventory counts
We have also evaluated the completeness of the information in the annual report
and assessed whether they correspond to applied accounting principles.
Valuation of accounts receivables
See disclosure 15 and 22 and accounting principles on pages 85 and 87 in the annual account and consolidated accounts for detailed information and
description of the matter.
Description of key audit matter
Consolidated statement of financial position includes accounts receivables
amounting to SEK 312m after provision for bad debts by SEK 5m as at 31 Decem-
ber 2022.
The Group performs regular assessments of outstanding accounts receivables
and provision for bad debts.
The provision for bad debts is based upon an individual assessment of
customers ability to pay invoices and is also based upon the number of days of
outstanding receivables and payment history.
The valuation of accounts receivable is presented as a key audit matter as
the valuation contain several elements of estimates and judgments from man-
agement. This is one of the key areas of estimation uncertainty, because Russian
economic environment in general and construction industry, where significant
portion of Group’s customers operate, are unstable. There is therefore a risk that
the recoverable amount could be lower than the book value and that a write-down
or provision will have an impact on the reported result.
Response in the audit
We have assessed design and implementation of controls and processes imple-
mented by the group over valuation of accounts receivable.
We have performed the following substantive audit procedures:
• We reviewed the Group’s analysis of the allowance for doubtful debts as at 31 De-
cember 2022 based on expected credit losses in accordance with the requirements
of IFRS 9. We also evaluated the historical result of credit provisions and credit
losses to assess the reliability of doubtful debts at the reporting date
• Review of ageing list of receivables as at 31 December 2022 to verify its accuracy
and completeness;
• We examined significant balances overdue more than 90 days at reporting date,
but not included in the provision and investigated reasons for non-inclusion.
• We have also considered effect of payments from customers received after year
end on valuation of trade receivables as at 31 December 2022
• Retrospective review of the provision recognised as at 31 December 2021 by com-
paring the amount of provision to actual outcome to obtain information regarding
the effectiveness of Group’s estimation process and identify potential bias
We have also evaluated the completeness of the information in the annual report
and assessed whether they correspond to applied accounting principles.
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Other Information than the annual accounts and consolidated accounts
This document also contains other information than the annual accounts and consolidated accounts and is found on pages 1–56 and 62–65 The other information com-
prises also of the remuneration report which we obtained prior to the date of this auditor’s report. The Board of Directors and the Managing Director are responsible for
this other information.
Our opinion on the annual accounts and consolidated accounts does not cover this other information and we do not express any form of assurance conclusion
regarding this other information.
In connection with our audit of the annual accounts and consolidated accounts, our responsibility is to read the information identified above and consider whether
the information is materially inconsistent with the annual accounts and consolidated accounts. In this procedure we also take into account our knowledge otherwise
obtained in the audit and assess whether the information otherwise appears to be materially misstated.
If we, based on the work performed concerning this information, conclude that there is a material misstatement of this other information, we are required to report
that fact. We have nothing to report in this regard.
Responsibilities of the Board of Directors and the Managing Director
The Board of Directors and the Managing Director are responsible for the prepa-
ration of the annual accounts and consolidated accounts and that they give a fair
presentation in accordance with the Annual Accounts Act and, concerning the con-
solidated accounts, in accordance with IFRS as adopted by the EU. The Board of
Directors and the Managing Director are also responsible for such internal control
as they determine is necessary to enable the preparation of annual accounts and
consolidated accounts that are free from material misstatement, whether due to
fraud or error.
In preparing the annual accounts and consolidated accounts The Board of
Directors and the Managing Director are responsible for the assessment of the
company’s and the group’s ability to continue as a going concern. They disclose,
as applicable, matters related to going concern and using the going concern basis
of accounting. The going concern basis of accounting is however not applied if the
Board of Directors and the Managing Director intend to liquidate the company, to
cease operations, or has no realistic alternative but to do so.
The Audit Committee shall, without prejudice to the Board of Director’s
responsibilities and tasks in general, among other things oversee the company’s
financial reporting process.
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Auditor’s responsibility
Our objectives are to obtain reasonable assurance about whether the annual
accounts and consolidated accounts as a whole are free from material misstate-
ment, whether due to fraud or error, and to issue an auditor’s report that includes
our opinions. Reasonable assurance is a high level of assurance, but is not a
guarantee that an audit conducted in accordance with ISAs and generally accepted
auditing standards in Sweden will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of these annual accounts and
consolidated accounts.
As part of an audit in accordance with ISAs, we exercise professional judgment
and maintain professional scepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the annual accounts
and consolidated accounts, whether due to fraud or error, design and perform
audit procedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinions. The risk of not
detecting a material misstatement resulting from fraud is higher than for one
resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
• Obtain an understanding of the company’s internal control relevant to our audit in
order to design audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the company’s
internal control.
• Evaluate the appropriateness of accounting policies used and the reasonable-
ness of accounting estimates and related disclosures made by the Board of
Directors and the Managing Director.
• Conclude on the appropriateness of the Board of Directors’ and the Managing
Director’s, use of the going concern basis of accounting in preparing the annual
accounts and consolidated accounts. We also draw a conclusion, based on the
audit evidence obtained, as to whether any material uncertainty exists related
to events or conditions that may cast significant doubt on the company’s and
the group’s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditor’s report to the
related disclosures in the annual accounts and consolidated accounts or, if such
disclosures are inadequate, to modify our opinion about the annual accounts and
consolidated accounts. Our conclusions are based on the audit evidence ob-
tained up to the date of our auditor’s report. However, future events or conditions
may cause a company and a group to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the annual accounts
and consolidated accounts, including the disclosures, and whether the annual
accounts and consolidated accounts represent the underlying transactions and
events in a manner that achieves fair presentation.
• Obtain sufficient and appropriate audit evidence regarding the financial informa-
tion of the entities or business activities within the group to express an opinion on
the consolidated accounts. We are responsible for the direction, supervision and
performance of the group audit. We remain solely responsible for our opinions.
We must inform the Board of Directors of, among other matters, the planned scope
and timing of the audit. We must also inform of significant audit findings during our
audit, including any significant deficiencies in internal control that we identified.
We must also provide the Board of Directors with a statement that we have
complied with relevant ethical requirements regarding independence, and to
communicate with them all relationships and other matters that may reasonably be
thought to bear on our independence, and where applicable, measures that have
been taken to eliminate the threats or related safeguards.
From the matters communicated with the Board of Directors, we determine
those matters that were of most significance in the audit of the annual accounts
and consolidated accounts, including the most important assessed risks for
material misstatement, and are therefore the key audit matters. We describe these
matters in the auditor’s report unless law or regulation precludes disclosure about
the matter.
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Report on other legal and regulatory requirements
Auditor’s audit of the administration and the proposed appropriations of profit or loss
Opinions
In addition to our audit of the annual accounts and consolidated accounts, we have also audited the administration of the Board of Directors and the Managing Director of
Ferronordic AB (publ) for the year 2022 and the proposed appropriations of the company’s profit or loss.
We recommend to the general meeting of shareholders that the profit be appropriated in accordance with the proposal in the statutory administration report and that
the members of the Board of Directors and the Managing Director be discharged from liability for the financial year.
Basis for Opinions
We conducted the audit in accordance with generally accepted auditing standards in Sweden. Our responsibilities under those standards are further described in the
Auditor’s Responsibilities section. We are independent of the parent company and the group in accordance with professional ethics for accountants in Sweden and have
otherwise fulfilled our ethical responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinions.
Responsibilities of the Board of Directors and the Managing Director
The Board of Directors is responsible for the proposal for appropriations of the
company’s profit or loss. At the proposal of a dividend, this includes an assess-
ment of whether the dividend is justifiable considering the requirements which the
company’s and the group’s type of operations, size and risks place on the size of
the parent company’s and the group’s equity, consolidation requirements, liquidity
and position in general.
The Board of Directors is responsible for the company’s organization and the
administration of the company’s affairs. This includes among other things continuous
assessment of the company’s and the group’s financial situation and ensuring that
the company’s organization is designed so that the accounting, management of
assets and the company’s financial affairs otherwise are controlled in a reassuring
manner.
The Managing Director shall manage the ongoing administration according to
the Board of Directors’ guidelines and instructions and among other matters take
measures that are necessary to fulfill the company’s accounting in accordance with
law and handle the management of assets in a reassuring manner.
Auditor’s responsibility
Our objective concerning the audit of the administration, and thereby our opinion
about discharge from liability, is to obtain audit evidence to assess with a reason-
able degree of assurance whether any member of the Board of Directors or the
Managing Director in any material respect:
• has undertaken any action or been guilty of any omission which can give rise to
liability to the company, or
• in any other way has acted in contravention of the Companies Act, the Annual
Accounts Act or the Articles of Association.
Our objective concerning the audit of the proposed appropriations of the company’s
Our objective concerning the audit of the proposed appropriations of the company’s
profit or loss, and thereby our opinion about this, is to assess with reasonable degree
of assurance whether the proposal is in accordance with the Companies Act.
Reasonable assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with generally accepted auditing standards
in Sweden will always detect actions or omissions that can give rise to liability to
the company, or that the proposed appropriations of the company’s profit or loss
are not in accordance with the Companies Act.
As part of an audit in accordance with generally accepted auditing standards in
Sweden, we exercise professional judgment and maintain professional scepticism
throughout the audit. The examination of the administration and the proposed
appropriations of the company’s profit or loss is based primarily on the audit of the
accounts. Additional audit procedures performed are based on our professional
judgment with starting point in risk and materiality. This means that we focus the
examination on such actions, areas and relationships that are material for the
operations and where deviations and violations would have particular importance
for the company’s situation. We examine and test decisions undertaken, support
for decisions, actions taken and other circumstances that are relevant to our
opinion concerning discharge from liability. As a basis for our opinion on the Board
of Directors’ proposed appropriations of the company’s profit or loss we examined
the Board of Directors’ reasoned statement and a selection of supporting evidence
in order to be able to assess whether the proposal is in accordance with the Com-
panies Act.
Formal annual report
Directors’ report
Risks and uncertainties
Financial reports
Notes
Board signatures
Auditor’s report
125
FERRONORDIC ANNUAL REPORT 2022
Corporate
governance
Formal
annual reportThe shareSustainabilityIntroduction
Market outlook
& operations
The auditor’s examination of the Esef report
Opinion
In addition to our audit of the annual accounts and consolidated accounts, we have also examined that the Board of Directors and the Managing Director have prepared
the annual accounts and consolidated accounts in a format that enables uniform electronic reporting (the Esef report) pursuant to Chapter 16, Section 4(a) of the Swedish
Securities Market Act (2007:528) for Ferronordic AB (publ) for year 2022.
Our examination and our opinion relate only to the statutory requirements.
In our opinion, the Esef report has been prepared in a format that, in all material respects, enables uniform electronic reporting.
Basis for Opinions
We have performed the examination in accordance with FAR’s recommendation RevR 18 Examination of the Esef report. Our responsibility under this recommendation
is described in more detail in the Auditors’ responsibility section. We are independent of Ferronordic AB (publ) in accordance with professional ethics for accountants in
Sweden and have otherwise fulfilled our ethical responsibilities in accordance with these requirements.
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Responsibilities of the Board of Directors and the Managing Director
The Board of Directors and the Managing Director are responsible for the prepa-
ration of the Esef report in accordance with the Chapter 16, Section 4(a) of the
Swedish Securities Market Act (2007:528), and for such internal control that the
Board of Directors and the Managing Director determine is necessary to prepare
the Esef report without material misstatements, whether due to fraud or error.
Auditor’s responsibility
Our responsibility is to obtain reasonable assurance whether the Esef report is in
all material respects prepared in a format that meets the requirements of Chapter
16, Section 4(a) of the Swedish Securities Market Act (2007:528), based on the
procedures performed.
RevR 18 requires us to plan and execute procedures to achieve reasonable
assurance that the Esef report is prepared in a format that meets these require-
ments.
Reasonable assurance is a high level of assurance, but it is not a guarantee
that an engagement carried out according to RevR 18 and generally accepted
auditing standards in Sweden will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are considered material if,
individually or in aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of the Esef report.
The audit firm applies ISQC 1 Quality Control for Firms that Perform Audits
and Reviews of Financial Statements, and other Assurance and Related Services
Engagements and accordingly maintains a comprehensive system of quality
control, including documented policies and procedures regarding compliance with
professional ethical requirements, professional standards and legal and regulatory
requirements.
The examination involves obtaining evidence, through various procedures, that the
Esef report has been prepared in a format that enables uniform electronic reporting
of the annual accounts and consolidated accounts. The procedures selected
depend on the auditor’s judgment, including the assessment of the risks of material
misstatement in the report, whether due to fraud or error. In carrying out this risk
assessment, and in order to design procedures that are appropriate in the circum-
stances, the auditor considers those elements of internal control that are relevant
to the preparation of the Esef report by the Board of Directors and the Managing
Director, but not for the purpose of expressing an opinion on the effectiveness of
those internal controls. The examination also includes an evaluation of the appro-
priateness and reasonableness of the assumptions made by the Board of Directors
and the Managing Director.
The procedures mainly include a validation that the Esef report has been
prepared in a valid XHMTL format and a reconciliation of the Esef report with the
audited annual accounts and consolidated accounts.
Furthermore, the procedures also include an assessment of whether the
consolidated statement of financial performance, financial position, changes in
equity, cash flow and disclosures in the Esef report have been marked with iXBRL
in accordance with what follows from the Esef regulation.
Formal annual report
Directors’ report
Risks and uncertainties
Financial reports
Notes
Board signatures
Auditor’s report
126
FERRONORDIC ANNUAL REPORT 2022
Corporate
governance
Formal
annual reportThe shareSustainabilityIntroduction
Market outlook
& operations
The auditor’s examination of the corporate governance statement
The Board of Directors is responsible for that the corporate governance statement on pages 57–61 has been prepared in accordance with the Annual Accounts Act.
Our examination of the corporate governance statement is conducted in accordance with FAR´s auditing standard RevR 16 The auditor´s examination of the corpo-
rate governance statement. This means that our examination of the corporate governance statement is different and substantially less in scope than an audit conducted
in accordance with International Standards on Auditing and generally accepted auditing standards in Sweden. We believe that the examination has provided us with
sufficient basis for our opinions.
A corporate governance statement has been prepared. Disclosures in accordance with chapter 6 section 6 the second paragraph points 2–6 of the Annual Accounts
Act and chapter 7 section 31 the second paragraph the same law are consistent with the other parts of the annual accounts and consolidated accounts and are in
accordance with the Annual Accounts Act.
The auditor’s opinion regarding the statutory sustainability report
The Board of Directors is responsible for the sustainability report on pages 37–52, and that it is prepared in accordance with the Annual Accounts Act.
Our examination has been conducted in accordance with FAR:s auditing standard RevR 12 The auditor’s opinion regarding the statutory sustainability report. This means
that our examination of the statutory sustainability report is different and substantially less in scope than an audit conducted in accordance with International Standards
on Auditing and generally accepted auditing standards in Sweden. We believe that the examination has provided us with sufficient basis for our opinion.
A statutory sustainability report has been prepared.
KPMG AB, Box 382, 101 27, Stockholm, was appointed auditor of Ferronordic AB (publ) by the general meeting of the shareholders on the 12 May 2022. KPMG AB or
auditors operating at KPMG AB have been the company’s auditor since 2010.
Stockholm 13 April 2022
KPMG AB
Mats Kåvik
Authorised Public Accountant
Formal annual report
Directors’ report
Risks and uncertainties
Financial reports
Notes
Board signatures
Auditor’s report
