Introduction
Annual report 2023
Introduction
Table of contents
The statutory annual report comprises
pp. 43–60, 65–69 and 74–126.
Introduction
This is Ferronordic 3
The year in brief 4
CEO comments 6
Business model 8
Background and history 9
Vision, values and
strategic cornerstones 11
Strategic objectives 13
Value creation 14
Ferronordic as an investment 15
Market outlook & operations
Markets and driving forces 17
USA 19
Germany 24
Central Asia 32
Brands 38
Digital platform 40
e-mobility 41
Sustainability
Ferronordic’s sustainability approach 43
In line with international standards 44
Transparency 45
 46
Fair workplace 48
󰀨 50
Sustainability risks 51
Outlook for 2024 52
EU Taxonomy 53
KPI index 59
The share
The Ferronordic share 62
Corporate governance
Corporate governance report 65
The Board 70
Management and auditors 72
Formal annual report
Directors’ report 74
Risks and uncertainties 77
Financial reports 80
Notes 93
Board signatures 126
Auditor’s report 127
3
FERRONORDIC ANNUAL REPORT 2023
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
This is Ferronordic
Ferronordic is a service and sales company operating in the areas of construction equipment
and trucks in the USA, Germany and Central Asia (CA). Ferronordic also has a used and rental
business. The Group has 42 outlets and approx. 800 employees.
USA
On 30 November 2023, Ferronordic completed
the acquisition of Rudd Equipment Company Inc.
(“Rudd”). Rudd is one of the largest dealers of
Volvo CE in the United States with operations in
all or parts of nine states in the eastern USA. The
Company also represents other brands, such as
Hitachi, Sandvik and Link-Belt. Rudd is based in
Kentucky but covers an extensive sales area with
several large cities, such as Cincinnati, Columbus,
St. Louis, Cleveland and Pittsburgh. In 2023,
Rudd had sales of USD 258.1m (based on prelimi-
nary US GAAP accounts converted to IFRS).
Germany
Since 2020, Ferronordic is a dealer of Volvo and
Renault Trucks in parts of central and eastern
Germany. 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. Ferronordic is also responsible for sales,
service and repairs of Sandvik mobile crushers
and screens in most of Germany.
Central Asia (CA)
The CA segment currently consists of Kazakhstan,
where Ferronordic is the dealer of Volvo Construc-
tion Equipment and Mecalac. The Company is
also responsible for sales, service and repairs of
Sandvik mobile crushers and screens throughout
Kazakhstan.
Contracting services
In addition to service, sales and rental, Ferronordic
also offers contracting services. In contracting ser-
vices, Ferronordic owns and operates machines
or trucks to provide efficient and sustainable trans-
port solutions to its customers. For such transport-
as-a-service solutions, Ferronordic is typically
paid per cubic meter or kilometer. Ferronordic
has, for example, worked in the mining industry
to excavate and transport overburden or rock for
customers. Ferronordic sees great potential in
employing electric trucks to deliver sustainable
transport services.
Headquarters in Stockholm, Sweden
Ferronordic was founded in 2010 and is
headquartered in Stockholm. The shares in
Ferronordic AB (publ) are listed on Nasdaq
Stockholm since 2017.
4
FERRONORDIC ANNUAL REPORT 2023
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual reportIntroduction
The year in brief
4
Group
• 2023 was a year of building a new Ferronordic.
• After hard work to expand our business to new markets, Ferronordic
acquired a major VCE dealer in the eastern USA in November 2023.
• The purchase price of Ferronordic’s US business, and two related work-
shop properties, was SEK 1,093m.
• The US business segment performed strongly in December 2023.
• Continued investment in service network and transition to electric transport
in Germany.
• Efficiency program launched in Germany to improve resilience and profita-
bility in a weaker market.
• The Kazakh business in the Central Asia business segment continued to
develop, albeit slower than expected growth.
• Working capital increased in all segments, mainly as a result of higher
inventory.
• Initiatives to bring down inventory launched and expected to deliver results
in the first half of 2024.
• Net cash position of SEK 957m changed to a net debt position of
SEK 1,349m, mainly due to acquisition in the USA but also due to higher
working capital.
• Continued focus on electric trucks and a sustainable offer to our customers.
• Total revenue for the continuing Group increased by 45 percent to
SEK 2,863m
1
(1,973).
• The operating result for the continuing Group was SEK -115m
1
(233).
• Given the negative result, the Board recommends no dividend be paid
in 2024.
USA (December only)
• New machine sales and rental conversions of 47 units.
• SEK 308m revenue contribution.
• Operating result of SEK 25m, including SEK 11m of acquisition costs.
• Operating profit margin of 8 percent.
Germany
• Three additional workshops launched in the year.
• Network of 22 workshops at year end.
• Further investments to promote electric transport and government subsidies
received for investment in electric trucks.
• Sales of new trucks in units decreased by 2 percent in a market that in-
creased by 25 percent, mainly as supply normalised.
• Trucks sales grew by 32 percent as a result of product mix, higher sales of
used trucks and foreign exchange effects.
• Aftermarket sales increased by 27 percent on a mix of organic and acquired
growth.
• Selling, general and administrative costs increased by 36 percent.
• Much work at the end of 2023 was directed towards cutting costs and
increasing efficiency in the German segment.
• Management changes in Germany include operational roles for Group
executives.
• Impairment of SEK -11m on select Sandvik crushers and screens in inventory.
• Total revenue increased by 28 percent to SEK 2,271m (1,770).
• Operating result decreased to SEK -72m (-21), partly due to restructuring
and impairment costs of SEK -34m.
• Operating margin decreased to -3.2 percent (-1.2).
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
1
Including the effect of the compensation payment from Volvo of SEK 321m.
5
FERRONORDIC ANNUAL REPORT 2023
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual reportIntroduction
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
Central Asia (CA)
• Management changes to drive improved new equipment and aftermarket
sales.
• Investments in capabilities to offer contracting services in Kazakhstan.
• Sales of new construction equipment in units increased by 20 percent in a
market that is estimated to have declined by approx. 23 percent.
• Strong growth in used equipment.
• Aftermarket sales increased by 14 percent, partly on better market penetration.
• Total revenue increased by 40 percent to SEK 284m (203).
• Inventory impairments of SEK -2m negatively impacted gross margin.
• Operating profit decreased to SEK 9m (16).
• Operating margin declined to 3.1 percent (7.6).
2023 2022 2021 %
New units sold 1,094 1,052 854 -3
Revenue, SEK m 2,863 1,973 1,511 45
Growth, % 45 31 40 14
EBITDA adjusted, SEK m -7 -17 -52 60
EBITDA margin adjusted, % -0.2 -1 -3 0.6
Operation profit, SEK m
1
-115 233 -112 -149
Operation margin, % -4 12 -7 -16
Operation profit adjusted, SEK m -115 -88 -112 -30
Operation margin adjusted, % -4 -4 -7 0
Result per share after full dilution, SEK -7.39 30.28 23.26 -124
Net debt/(Net cash), SEK m 1,349 -957 198 -241
Return on capital employed, % -3 11 29 -14
Working capital/Revenue, % 20 11 2 9
Total assets, SEK m 4,705 3,217 3,973 46
Equity/total assets, % 34 58 28 -24
¹
Including the effect of the compensation payment from Volvo of SEK 321m.
6
FERRONORDIC ANNUAL REPORT 2023
CEO comments
2023 was a year of reset and restart for Ferronordic.
We worked hard to expand our business into new
markets and in November we acquired Rudd
Equipment Company, a major construction equip-
ment dealer in the US. After this deal, the US will
be our biggest market and business segment.
Meanwhile, we continued work to improve our
service network and to invest in the transition to
electric transport in Germany. Our costs in Germany,
however, were too high as the market began to
slow down and, by the end of the year, we stream-
lined the organisation to ensure a stronger position
as we entered 2024. In Kazakhstan, the business
continued to grow, but less than expected. In
Kazakhstan we also made changes to the organ-
isation to strengthen our position for the future. At
the Group level, we enhanced our sustainability
efforts which is a core element of our strategic
objectives. In summary, 2023 was a challenging
year, but also a year of changes that will bring
exciting opportunities for the future.
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 2023
US
Geographic expansion is one of our strategic objectives and for some time we
have been looking for opportunities to expand into new markets that fit our company
profile. In November 2023, we announced the acquisition of Rudd Equipment
Company inc, a major dealer of construction equipment in eastern USA. In 2023,
Rudd had a revenue of USD 258m with an operating profit of USD 21m. Including
two real estate assets, Ferronordic paid USD 106m with a combination of own
cash and debt. Since the acquisition, we have got to know our 360 new employees
and visited our 13 new workshops. Rudd is a great strategic fit for us and provides
the platform and scale we have been looking for. The acquisition gives us a strong
base in a dynamic market and opens potential for further expansion in North
America. This is a major step towards rebuilding Ferronordic as a leading service
and sales company.
Germany
In Germany, 2023 was a setback. After achieving a positive operating result in the
first quarter of 2023, our performance deteriorated as we continued to build our or-
ganisation while the demand slowed. We were not able to get the expected returns
on our platform and must become more efficient. It becomes particularly clear in
a declining market but is equally important for increasing long-term resilience and
profitability. We have thus taken measures to reduce the number of administrative
functions while improving the efficiency of the productive organisation. We have
reduced the number of sales areas and removed a number of middle-management
positions. The German management has to a large extent been changed and now
includes Group executives, including myself. The efficiency program is expected
to result in savings of approximately SEK 60m per year starting from the second
quarter of 2024. During the year, we opened three new workshops in Germany.
With a total of 22 workshops in our network, we can shift focus from expanding
to further improving performance in our workshops. Aftermarket sales grew by
27 percent on a mix of organic and acquisitions. This is positive and we expect
aftermarket growth to continue in 2024. Long delivery lead times from suppliers
and declining demand contributed to a growth in inventory and debt during the
second half of 2023. We expect inventory levels to normalise in the first half of
2024. To further strengthen our operations in Germany and free up capital, we
have also decided to reduce our used inventory and rental fleet of diesel trucks.
Meanwhile, we continue to invest in our electric truck rental fleet. We feel confident
in our investments and want to continue to be a driving force in the electrification of
the market.
Kazakhstan
In Kazakhstan, we changed our segment head and continued to build our or-
ganisation to further drive industry segmentation and customer orientation. We
also built and maintained the organisational capacity needed to offer contracting
services in Kazakhstan. The inventory remains too high in Kazakhstan. We expect
the inventory to normalise during the first half of 2024.
Our sales of construction equipment in units increased by 20 percent in a
market that decreased by 23 percent. Used equipment sales grew by 125 percent.
Aftermarket sales increased by 14 percent and continue to lag machine sales but
will pick up as the population increases.
Outlook
After a transformative 2023, we look forward with confidence to a restart in 2024.
We are optimistic about our expansion in the USA and the opportunities there.
Demand in the USA is supported by a dynamic economy and extensive support
programs for infrastructure investment. The German economy is slowing, and the
truck market is expected to decrease in 2024. We have taken steps to adapt our
organisation and cost structure to a weaker market. We believe in continued strong
demand in the aftermarket business. We are confident that we will emerge stronger
from current challenges and remain optimistic about the long-term potential in
Germany. Our operations in Kazakhstan continue to develop, even if they will
constitute a smaller part of the Group’s total operations in the future.
Lars Corneliusson
CEO and President
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
2023 was a year of reset
and restart for Ferronordic.
”
”
CEO comments, cont.
8
FERRONORDIC ANNUAL REPORT 2023
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 construction equipment and trucks.
The business consists of selling, repairing and maintaining construction equipment, trucks, 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, an excellent
network and customer-focused solutions.
Ferronordic’s business delivers value through four main types of customer busi-
ness 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 mainte-
nance 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 machine,
service and spare parts.
Revenue from 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
9
FERRONORDIC ANNUAL REPORT 2023
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,
Ferro nordic 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. In 2023, Ferronordic
acquired Rudd Equipment Company, one of the largest dealers for Volvo CE in the US. Ferronordic
currently has 42 workshops and approx. 800 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 percent during 2014–2015 and the Russian
ruble was severely weakened due to sharply falling oil prices.
• Sales declined sharply but operating profit remained strong.
• 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.
- Became an official dealer of Terex Trucks 2014.
- Agreement with Dressta and Rottne reached in 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.
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
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
10
FERRONORDIC ANNUAL REPORT 2023
Phase IV 2022–
Rebuilding and restarting the business
• Ferronordic sells and exits its Russian business in the end of 2022, receiving
SEK 1,097m (EUR 99m).
• Further expansion of network in Germany by acquiring and opening workshops
in Bingen, Peine, Coswig, Bad Hersfeld, Hanover and Northeim during 2022 and
2023.
• Efficiency enhancement program launched in Germany in late 2023 to cut admin-
istrative costs and change the regional management team to improve resilience
and profitability.
• Investment in electric trucks, infrastructure and organisation to deliver sustainable
transport solutions, starting in Germany.
• Management changes in Kazakhstan to better leverage the platform to drive
growth in equipment and aftermarket sales.
• In 2023, Ferronordic acquired Rudd Equipment Company, one of the largest
dealers for Volvo CE in the US for a net purchase price of SEK 1,093m.
- Rudd is the dealer for VCE, Hitachi, Sandvik and Link-Belt in all or parts of nine
states in the eastern US.
- Based on preliminary 2023 US GAAP results, the US business will become
Ferronordic’s biggest segment
At the end of 2023, the operations consisted of 42 facilities and approx.
800 employees.
Phase III 2017–2021
Leveraging the platform
• Became an official dealer for Mecalac 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.
- Became an authorised dealer for Volvo CE and Mecalac in Kazakhstan in
January 2019.
- Became an authorised dealer for Volvo Trucks and Renault Trucks in approx.
20 percent 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 approx.
1,800 employees.
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
Authorised dealer for Volvo
Trucks and Renault Trucks in
approx. 20 percent 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)
Ferronordic acquired
Rudd Equipment Inc, one
of the largest dealers for
Volvo CE in the US for
a net purchase price of
SEK 1,093m.
11
FERRONORDIC ANNUAL REPORT 2023
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 and its employees when inter-
acting with customers, 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.
Respect
Ferronordic wants 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.
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.
Vision
Mission
Values & operating principles
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
12
FERRONORDIC ANNUAL REPORT 2023
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
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
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 em-
ployees are not afraid to make
mistakes but see it as part of
learning and growing. Ferro-
nordic 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 employee
understands that mutual trust,
dialogue and openness are the
best ways to improve results
and move the business forward.
Ferronordic’s mission is to
support its customers’ growth
and leading positions in their
industries and markets. The
Company does this by develop-
ing products and business solu-
tions based on each customer´s
unique needs, which leads to
increased productivity, greater
flexibility and higher cost
efficiency. Ferronordic is keen
to establish close cooperation,
deliver high-quality services
and products as well as offer
customised and tailor-made
solutions.
Ferronordic collaborates with
world-leading suppliers of
construction equipment and
trucks. The Company offers
premium products of uncom-
promising quality, world-class
comfort, maximum efficiency,
highest safety and minimum
environmental impact. Each
brand has a leading position in
its segment, which Ferronordic
contributes to developing and
strengthening. The brands and
products complement each
other, which means that Ferro-
nordic can deliver both broad
and customised solutions to its
customers.
At Ferronordic, employees have
a quality mindset and a focus
on continuous improvements.
The Company’s employees
welcome and drives change,
are flexible and agile, and
always strives to improve its
services and products for the
benefit of both customers
and environment. Ferronordic
invests in the latest technology
and develops new solutions.
The Company strives towards
economic and ecological sus-
tainability and to contribute to a
circular economy.
Great team Customer centricity Building on strong brands Operational excellence
13
FERRONORDIC ANNUAL REPORT 2023
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual reportIntroduction
Strategic objectives
Ferronordic currently operates in three geographical markets: USA, Germany and Kazakhstan. The
Company represents several leading manufacturers. In addition to Volvo, Ferronordic also cooperates
with Hitachi, Sandvik, Link-Belt and Mecalac. Ferronordic has also developed vertically by expanding its
rental and used businesses and offering contracting services and sustainable transport solutions.
Strategic objectives
Ferronordic’s strategic objectives capture how
Ferronordic wants to grow and create value for all its
stakeholders.
Leadership in the markets for construction equipment
and trucks
Ferronordic’s success is based on successful custom-
ers. For customers to become leaders in their indus-
tries, 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 1.0 x refers to the
dealer business and means that the gross profit from
the aftermarket business covers 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, a broader customer offering, 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 and stationary crushers and screens
in Kazakhstan and Germany. In 2023, Ferronordic ac-
quired Rudd Equipment Company, one of the largest
dealers for Volvo CE in the US, and also become
dealer for Hitachi, Sandvik and Link-Belt.
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. Meanwhile,
Ferronordic can operate the equipment more efficiently
and also use the experience elsewhere in 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. The Com-
pany is looking for opportunities to offer this type of
service in the US, Germany and Kazakhstan.
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
Ferro nordic’s CRM system, which in turn allows
Ferronordic to anticipate and prevent problems.
Ferronordic’s digital platform is operational in
Kazakhstan, but Ferronordic will continue to invest
in the digitalisation of its sales to further develop and
apply the logic in the US, Germany and potential
future markets.
Geographical expansion
Ferronordic has experience from working in demand-
ing markets and under difficult conditions. This experi-
ence can be employed in other markets, and allowed
Ferronordic to expand allowed Ferronordic to expand
to Kazakhstan in 2019. In 2020, Ferronordic entered
the German trucks market with Volvo Trucks and
Renault Trucks and built further institutional knowl-
edge. In 2023, Ferronordic acquired the Rudd
Equipment Company in the US. Ferronordic sees
opportunities to leverage its organisation, experience
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
14
FERRONORDIC ANNUAL REPORT 2023
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual reportIntroduction
Trust capital
Relationships with 8,177 cus-
tomers 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 digital sales and
service platform that generates
sales leads and concrete propos-
als to customers based on data
from the connected machines and
trucks.
Manufactured capital
A truck and machine fleet with a
value of SEK 1,194m for rental or
use in contracting services.
A network of 42 service workshops
at a value of SEK 408m.
Human capital
808 employees with extensive
experience, strong customer
focus, excellent teamwork, and
both broad and deep collective
competence.
Financial capital
SEK 3,397m in capital employed
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 places 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
businesses 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 -115m in operating profit.
For the society
SEK 6m in taxes paid.
72¹ jobs.
For customers
975 trucks sold.
119 machines sold.
For employees
40 more jobs in Germany, 3 more in USA and
2 in Kazakhstan.
4,937.74 hours of training.
SEK 446m in salaries paid and other remuner-
ation.
For financiers
SEK 48m in interest and other finance costs.
For partners and suppliers
SEK 2,418m in payments to suppliers.
Increase of market share in the trucks market
in Germany.
Further investment in brand awareness and
new product (e.g. electric trucks in Germany)
positioning.
Value creation
Resources Business model Value creation Created value 2023
1
Excluding the US
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
15
FERRONORDIC ANNUAL REPORT 2023
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual reportIntroduction
Ferronordic as an investment
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
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. Stable revenue and high cost absorption from the after-
market business provide resilience during times of market volatility. 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 and integration 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. In 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 develop-
ment and career opportunities. 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, over time Ferronordic aims to maintain a strong balance sheet. The Company has historically delivered a
strong cash flow, which provided opportunities for both reinvestments with good returns and dividends to shareholders. In November 2023, Ferronordic
acquired a leading dealer of Volvo Construction Equipment in the US. Ferronordic also continued to invest in the development of its German and
Kazakh businesses. Ferronordic’s financial objectives are currently under review.
5
Introduction
Market outlook & operations
Introduction
17
FERRONORDIC ANNUAL REPORT 2023
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, digitalisa-
tion, electrification and circular economy.
Market outlook & operations
Markets and driving forces
USA
Germany
Central Asia
Brands
Digital platform
e-mobility
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 3.1 per-
cent in 2023. Growth is gradually recovering to the average pre-pandemic level
of 3.8 percent. 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.
The solutions
• Digitalisation
• Electrification
• Circular economy
Basic trends
• Population growth and
urbanisation
• Globalisation
• Growing prosperity and
consumption
Growing demands
• Raw materials
• Transports
• Infrastructure
• Buildings
The challenge
• Stress on the environ ment,
climate and societies
18
FERRONORDIC ANNUAL REPORT 2023
Introduction
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual report
The challenge
The big, global challenge is to meet the growing demand for raw materials, trans-
port, infrastructure and buildings without compromising future generations’ ability to
meet their needs. Sustainability has therefore become a leading consideration and
driving factor when it comes to innovation and development of transport tech nology,
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 sustainability is climate change and the need
to reduce our use of fossil fuels. Part of the solution to this challenge is fuel effi-
ciency 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 manufac-
tured and consumed for as long as possible. When machines 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, remanufac-
ture and recycle trucks, construction equipment and parts with maximum efficiency
to minimise overall resource waste.
Market outlook & operations
Markets and driving forces
USA
Germany
Central Asia
Brands
Digital platform
e-mobility
19
FERRONORDIC ANNUAL REPORT 2023
Introduction
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual report
USA
On 30 November 2023, Ferronordic announced that it had completed of the acquisition of Rudd Equip-
ment Company, Inc. (“Rudd”). Rudd is one of the largest dealers of Volvo CE in the United States with
operations in all or parts of nine states. The Company also represents other brands, such as Hitachi,
Sandvik and Link-Belt. Starting from December 2023, Ferronordic thus operates in the eastern USA.
Ferronordic’s operations in USA offer a base in the world’s second largest market for construction equip-
ment and provide opportunities for possible further expansion in the future.
The US is the world’s largest national economy with estimated GDP of USD 27tn
in 2023. With a population of 335 million people, US economy accounts for approx.
one-fourth of the global output, one-tenth of global trade flows, one-fifth of global
FDI stock and one-fifth of global energy demand. The US dollar is the most widely
used currency in global trade and financial transactions. Changes in US monetary
policy and investor sentiment play a major role in driving the global financing and
market conditions.
Reflecting its size and global importance, US has a mature, highly developed,
and diversified economy. The service sector accounts for more than 70 percent of
the GDP. The United States is also a large producer and consumer of commodities.
It is the world’s largest producer of oil and natural gas and a leading producer and
exporter of other minerals. The American economy is fuelled by high productivity,
well developed infrastructure, and extensive natural resources.
Strong growth above expectations
In 2023, the American economy outperformed expectations along three key dimen-
sions: growing economic output, labour market resilience, and slowing inflation.
GDP increased by 2.5 percent, the highest among the G7 economies, supported
by strong consumer spending, increased government spending and higher ex-
ports. The labour market remained robust and added a total of nearly 2.7 million
jobs in 2023. The unemployment rate was 3.7 percent (3.5). Core PCE inflation
decelerated to 2.9 percent, compared to 4.9 percent in 2022. After multiple interest
rate hikes since March 2022, the effective federal funds rate remained steady
since July 2023 and at the end of 2023 amounted to 5.33 percent. Looking ahead,
in 2024 most analysts expect a soft landing for the US economy. Baseline projec-
tions for GDP growth range between 1.4–2.1 percent.
Economic and political development
¹ Source: Energy Institute (EI) Statistical Review of World Energy (2023)
² Source: U.S. Geological Survey, Mineral Commodity Summaries (2024)
%
Oil production¹
0
5
10
15
20
USA
Saudi Arabia
Russia
Canada
Iraq
China
UAE
Iran
Central Asia
17.2
13.0
12.4
6.2
5.0
4.6
4.1
4.0
2.2
0
5
10
15
20
25
%
Gold reserves²
Australia
Russia
South Africa
USA
China
Central Asia
Indonesia
Brazil
Canada
20.3
18.8
8.5
5.1
5.1
4.7
4.4
4.1
3.9
0
5
10
15
20
25
%
Gas production¹
USA
Russia
Iran
China
Canada
Qatar
Central Asia
Australia
Norway
24.2
15.3
6.4
5.5
4.6
4.4
3.8
3.8
3.0
0
10
20
30
40
%
Copper reserves²
Chile
Peru
Russia
Congo
Mexico
USA
China
Poland
Indonesia
19.0
12.0
8.0
8.0
5.3
5.0
4.1
3.4
2.4
GDP (growth) USA³
-3
-2
-1
0
1
2
3
4
5
6
%
2013 2014
2015 2016
2017
2018
2019
2020
2022
2023
2024e
2021
3
Source: U.S. Bureau of Economic Analysis (BEA); Federal Open Market Committee
Market outlook & operations
Markets and driving forces
USA
Germany
Central Asia
Brands
Digital platform
e-mobility
20
FERRONORDIC ANNUAL REPORT 2023
Introduction
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual report
Trends and driving forces
The US construction equipment market is the second largest in the world with a
total size of approx. 52,000–56,000 units. One of the main drivers for the construc-
tion equipment market is significant infrastructure investments. Federal and state
governments allocate substantial funds for infrastructure development, including
roads, bridges, airports and public transportation. In addition, the construction of
residential and commercial properties remains a robust driver of the market. Pop-
ulation growth, urbanisation and economic expansion lead to growth in residential
and non-residential construction.
Infrastructure investments
Years of underinvestment in the ageing US infrastructure has resulted in a deteri-
oration of major public fixed assets, including roads, bridges, railways and transit
services. The American Society of Civil Engineers assessed the status of the
national infrastructure at a level of C- and estimated the total investment gap over
the next 10 years to amount USD 2.6tn
1
. Approx. 43 percent of public roads are in
poor or mediocre condition and 42 percent of all bridges are at least 50 years old
with 7.5 percent of bridges considered to be in poor condition. Ageing energy infra-
structure results in power outages that cost US economy up to USD 70bn annually.
The need for substantial investments in infrastructure resulted in government’s
initiatives to launch an infrastructure reform.
In 2021, President Biden announced the Bipartisan Infrastructure Law (“BIL”),
a substantial investment program aimed at upgrading the country’s infrastructure,
improving competitiveness and promoting economic growth. The BIL plans to direct
USD 1.2tn of federal funds towards road infrastructure, transportation, energy and
climate projects, most of which will be distributed via state and local government
grants across the US. In addition to that, in 2022 President Biden signed an Infla-
tion Reduction Act (“IRA”). The IRA is aimed at improving domestic manufacturing
capacity, lowering household energy costs and promoting clean energy.
Activity in residential and non-residential construction
The demand for our products and services is largely driven by the rising demand
for residential and non-residential construction. During 2019–2023, US residential
construction spending increased by CAGR 12 percent to USD 874bn and non-
residential construction spending grew by CAGR 7 percent to USD 1,103bn
2
. With
the planned substantial infrastructure investment programs, a growing economy an
increasing population, Ferronordic expects construction activity in US to increase.
USA
¹ Source: 2021 Report Card for America’s Infrastructure
2
Source: US Census Bureau
Investment needs by system based on current trends, 2020–2029, USD bn³
Infrastructure system Total need Funded Funding gap
Surface transportation 2,834 1,619 1,215
Drinking water, wastewater, stormwater 1,045 611 434
Electricity 637 440 197
Airports 237 126 111
Inland waterways and marine ports 42 17 25
Dams 94 13 81
Hazardous and solid waste 21 14 7
Levees 80 10 70
Public parks and recreation 78 10 68
Schools 870 490 380
Total 5,937 3,350 2,588
³ Source: 2021 Report Card for America’s Infrastructure
Market outlook & operations
Markets and driving forces
USA
Germany
Central Asia
Brands
Digital platform
e-mobility
BIL and IRA in brief
1
• Investment plan worth over USD 1.2tn with a focus on 12 main areas for development
• Expected investments of USD 400bn over the next 5 years to repair the roads and
bridges and support transformational projects that will create jobs, increase regional
and national economic opportunities and make US transportation system safer and
more resilient
• Railway development includes funding to modernise the Northeast Corridor and up-
grade rail service in areas outside the northeast and mid-Atlantic, refurbish Amtrak’s
fleet and facilities and upgrade freight rail service in rural communities
• Modernisation of the power grid by building and upgrading resilient transmission lines
to reduce outages and energy costs and facilitate the expansion of clean energy
• Investments in wastewater, water reuse, conveyance and water storage infrastructure
• Improvement and deployment of broadband infrastructure to provide access to reliable
high-speed internet
• Announced list with concrete projects worth USD 435bn, of which approx. USD 68bn
are to be implemented in the states where Ferronordic is operating
1
Source: Whitehouse.gov
Roads, bridges and major projects
176
Airports
8
Broadband
58
Clean energy
and power
28
Public transportation
35
Resilience
19
Passenger and
freight rail
35
Ports and
waterways
10
Safety
13
Water
25
Clean
build -
ings
and
homes
10
Other
18
BIL and IRA announced projects by type as of January 2024, USD bn
1
21
FERRONORDIC ANNUAL REPORT 2023
Introduction
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual report
Market outlook & operations
Markets and driving forces
USA
Germany
Central Asia
Brands
Digital platform
e-mobility
22
FERRONORDIC ANNUAL REPORT 2023
Introduction
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual report
Operations
On 13 November 2023, Ferronordic announced that it has entered into an agree-
ment to purchase 100 percent of the shares in Rudd. The transaction was com-
pleted on 30 November 2023. Ferronordic believes that Rudd is a great strategic fit
for the Group and gives a strong base in a dynamic market that opens potential for
further expansion in North America.
Rudd was founded in 1952 and is one of the largest dealers of Volvo CE in
the United States. Rudd has long traditions, strong customer relationships and a
solid business. The Company has historically had a strong focus on excavation
and extractive industries, particularly in Kentucky and West Virginia. In more recent
years, the Company has also focused more on the general construction segment.
Brands
Rudd is the authorised dealer of Volvo Construction Equipment in all or parts of
nine states in eastern USA. The Company also represents other strong brands,
such as Hitachi, Sandvik and Link-Belt. In 2023, sales of equipment and parts re-
lating to Volvo CE made up approx. 73 percent of Rudd’s revenue while remaining
revenue related to other brands.
Network
Rudd is based in Kentucky but covers an extensive sales area with several
large cities, such as Cincinnati, Columbus, St. Louis, Cleveland and Pittsburgh.
Together with the business, Ferronordic also acquired two real estate properties in
Cincinnati and Louisville. As of today, the business operates 13 outlets, of which
Ferronordic owns 8, across all or portions of nine states:
• Kentucky
• Ohio
• Indiana (except some counties)
• West Virginia (except some counties)
• Western Pennsylvania
• Eastern Missouri
• Southern Illinois
• Several counties in Tennessee and Maryland
Sales
In full-year 2023, Rudd sold 351 new units, 127 used units and 96 units were con-
verted to sales from rental. In December 2023, when Ferronordic consolidated the
US operations, Rudd sold 47 new units, 4 used units and converted 5 units from
rental. Total equipment revenue amounted SEK 212m. During the same period,
aftermarket sales amounted SEK 80m. Other revenue, which mainly consisted of
rental revenue, amounted SEK 15m.
USA
Machines sales
Aftermarket sales
Other sales
%
26
69
5
Net sales by activity
(December 2023)
Peine
Hannover
Barleben
Coswig
Dessau
Görschen
Bautzen
Dresden
Nordhausen
Leipzig
Kassel
Bergstrasse
Simmern
Kirn
Bingen
Limburg
Halger
Frankfurt
Fulda
Bad Hersfeld
Aschaffenburg
(22) Ferronordic outlets in Germany as of December 2023
Northeim
Market outlook & operations
Markets and driving forces
USA
Germany
Central Asia
Brands
Digital platform
e-mobility
23
FERRONORDIC ANNUAL REPORT 2023
Introduction
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual report
Sales of new machines December 2023
Type of product Number of sold units Description
Excavators 18 Used for a wide range of purposes, e.g. landscaping, excavation, trenching, demolition, loading etc.
Wheel loaders 17
󰀨
machines.
Road construction
equipment
3
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 5
Articulated towing vehicles for demanding conditions. Areas of use include road construction, quarrying,
mining and waste management.
Drill rigs 1 Surface drilling rigs are used for blast hole drilling in construction, quarrying and open-pit mining.
Mobile cranes 3 Cranes (tracked or wheeled) are used to lift and move large and heavy materials in a variety of industries.
USA
Market outlook & operations
Markets and driving forces
USA
Germany
Central Asia
Brands
Digital platform
e-mobility
24
FERRONORDIC ANNUAL REPORT 2023
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 phar-
maceuticals as the largest export goods. In addition to its size, the German economy is characterised by
a very high degree of maturity and diversification. The service sector accounts for approx. 70 percent of
the total economy.
Weaker-than-expected growth
The German economy was facing headwinds throughout 2023. A decline in indus-
trial production, higher financing costs and weak foreign demand impacted eco-
nomic activity negatively. As a result, Germany’s GDP decreased by 0.3 percent
in 2023. A slight improvement is expected in 2024 as the economy is forecast to
grow by 0.2–0.5 percent, driven by a recovery in domestic demand and declining
inflation.
A broader recovery is anticipated from 2025, when GDP is expected to increase
by 1.2–1.6 percent. Annual average inflation declined somewhat to 5.9 percent in
2023 (6.9). Inflation is projected to decrease further in 2024 to average 2.7 per-
cent.
Economic and political development
%
24
14
5
3
17
7
9
9
7
5
German exports (2023)¹
Motor vehicles
Machinery and equipment
Chemical products
Data processing devices, electronic and optical devices
Pharmaceutical products and similar
Electrical equipment
Basic metals
Food products
Rubber and plastic products
Other
GDP (current prices) Germany
2
3,000
4,000
5,000
USD billion
2013 2014
2015 2016
2017
2018
2019
2020
2022
2023
2024e 2025e
2021
¹ Source: German Federal Statistical Office
2
Source: IMF database
Market outlook & operations
Markets and driving forces
USA
Germany
Central Asia
Brands
Digital platform
e-mobility
25
FERRONORDIC ANNUAL REPORT 2023
Introduction
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual report
Trends and driving forces
Germany
During the past three years, production and delivery of new trucks were limited by
disruptions in the supply chains. As these constraints receded in 2023, the German
truck market rebounded and increased by 25 percent. Growth was particularly
strong during the first nine months and was mainly driven by the improved supply
situation and improved lead times but also by pent-up demand. Market growth,
however, decelerated towards the year-end and the market is expected to decline
in 2024.
In a longer-term perspective, Ferronordic nevertheless 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 key role for the whole EU
and the rest of Europe. Various development programs, such as Germany’s Na-
tional Recovery and Resilience Plan and the Federal Transport Infrastructure Plan
2030, have been adopted by the German government and will support economic
growth. This will to some extent translate into 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 remain a top priority for the 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 a
demand for completely new services and business solutions. Companies that can
provide charging infrastructure and give advice on which trucks and what equip-
ment best meet the needs of customers and the requirements of the future will
be able to take market shares and facilitate the transition towards zero-emission
transport solutions.
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.
¹ Source: German Federal Association of E-Commerce and Mail-Order Trade
Growth in e-commerce
During 2017–2022, the German e-commerce market was growing at CAGR of
9 percent.
1
Due to economic challenges, in 2023 e-commerce sales declined by
12 percent and amounted to EUR 79b.
1
As the economy will return to growth, the
e-commerce market is expected to expand further. The rapid development of e-
commerce puts new and higher demands on transports and logistics. The pandemic
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 service and sales partners.
Demand will increase for reliable
logistics operators
Market outlook & operations
Markets and driving forces
USA
Germany
Central Asia
Brands
Digital platform
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26
FERRONORDIC ANNUAL REPORT 2023
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 new 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 inter-
national airports.
Development 2023
Despite an unfavorable macroeconomic environment, recovering supply chains,
shorter lead times and stronger order books resulted in a growth in truck reg-
istrations. The total truck market increased by 25 percent and amounted to
69,000 units. The growth was particularly strong during the first nine months but
starting from Q4 2023 the growth slowed down and order intake decreased. Total
mileage
2
in 2023 remained lower than in 2022.
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
202320222021202020192018201720162015201420132012201120102009
Heavy trucks registrations¹ Average truck toll mileage index
2
75
80
85
90
95
110
115
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
68,982
¹ Germany registrations data compiled by Volvo Trucks (until December 2023).
2
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
Introduction
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual report
Market outlook & operations
Markets and driving forces
USA
Germany
Central Asia
Brands
Digital platform
e-mobility
27
FERRONORDIC ANNUAL REPORT 2023
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-
port, timber transport, heavy transport,
construction and civil engineering trans-
port, mining and quarry transport 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 2023
88 4 8
Germany
Market outlook & operations
Markets and driving forces
USA
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Digital platform
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28
FERRONORDIC ANNUAL REPORT 2023
Introduction
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual report
Operations
Ferronordic’s sales area corresponds to approx. 18 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. At the end of the
year, Ferronordic had 22 workshops and 399 employees in Germany. After a rapid
network expansion in 2021, 2022 and, to a lesser extent, in 2023, the future focus
will shift from building the platform towards improving network performance.
German efficiency enhancement program
In the context of a weaker market outlook and with a cost structure that weighed
on profitability, Ferronordic took measures at the end of 2023 to make its or-
ganisation more efficient and to reduce costs. The aim is to make Ferronordic’s
organisation leaner and more resilient by reducing both horizontal and vertical
administrative units, while increasing the efficiency of the productive organisation.
Ferronordic has thus reduced the number of regions in its sales area from four to
two and has reduced a number of middle management roles. The German man-
agement team has been reorganised to include Group Executives with operational
functions in the German business, including Group Commercial Director, Group
HR Director and Group CEO. Ferronordic has also analysed its cost structure
across all functional areas to identify opportunities to reduce costs without nega-
tively impacting – and where possible, improving – the productivity of the service
and sales areas. One key objective of the program is to increase Ferronordic’s
absorption level in Germany, that is how much of its fixed costs are covered by
the gross profit from its aftermarket business. As a result of the cost reduction
program, Ferronordic expects to save approx. SEK 60m annually, starting from the
end of Q2 2024.
0
500
1,000
1,500
2,000
2,500
2023202220212020
Revenue, SEKm
Truck sales
Aftermarket sales
Other income
%
27
69
4
Net sales by activity
-80
-60
-40
-20
0
2023202220212020
Operating profit and
operating margin
-8
-6
-4
-2
0
SEKm %
Operating profit
Operating margin
Germany
Market outlook & operations
Markets and driving forces
USA
Germany
Central Asia
Brands
Digital platform
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29
FERRONORDIC ANNUAL REPORT 2023
Introduction
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual report
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 decreased by 2 percent in 2023 to 975, including light commercial
vehicles. In terms of revenue, sales of new trucks increased by 29 percent and
amounted to SEK 1,336m.
In the coming years, sales of electric trucks are expected to increase sig-
nificantly. Together with digitalisation, electrification also creates completely new
business opportunities where Ferronordic can take greater overall responsibility
of the service offering. In 2023, The German Ministry for Digital and Transport
awarded Ferronordic subsidies in an amount up to EUR 23m for investing in up to
117 electric trucks. Ferronordic plans to use the subsidies to grow its fleet of Volvo
and Renault electric trucks and expand its business in electric rental and sustainable
transport solutions.
Sales of used trucks in units increased by 87 percent. In terms of revenue, sales
of used trucks amounted to SEK 242m, which is an increase of 51 percent com-
pared with the previous year. Ferronordic sees meaningful potential for the used
trucks business to complement its product portfolio.
Long delivery lead times from suppliers and declining demand contributed to
a continued growth in inventory and debt during 2023. In the second half of 2023,
Ferronordic took measures to reduce its inventory position and the Company
expects inventory to decrease in the first half of 2024. To further strengthen its
operations in Germany and to free up capital, Ferronordic has also decided to
reduce its used inventory and rental fleet of diesel trucks. At the same time, the
market and interest from our customers in electric trucks is growing.
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
each customer. In 2023, aftermarket sales increased by 27 percent and amounted
to SEK 608m. The increase was driven by a combination of organic growth and
previously made acquisitions.
2023 2022 2021
Change,
%, pp
Units of new machines and trucks 975 992 800 -5
Units of used machines and trucks 394 211 241 87
Revenue, SEK m 2,271 1,770 1,368 28
Gross profit, SEK m 253 214 149 18
Operating profit, SEK m -72 -21 -71 -248
Gross margin, % 11.1 12.1 10.9 -0.9
Operating margin, % -3.2 -1.2 -5.2 -2.0
SG&A/Revenue, % 14.4 13.5 15.9 0.8
Working capital/Revenue, % 25.9 17.0 6.4 8.9
0
200
400
600
800
1,000
23222120
Units of trucks sold
Segment 2023 2022 2021
Rigid trucks 244 238 190
Tractor trucks 657 673 570
Light commercial vehicles 74 81 40
Total 975 992 800
New cars 0 0 48
Market outlook & operations
Markets and driving forces
USA
Germany
Central Asia
Brands
Digital platform
e-mobility
30
FERRONORDIC ANNUAL REPORT 2023
Introduction
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual report
Sales of new trucks 2023
Type of product Number of sold units Description
Volvo FH16 15
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 641
Long haul and regional haul truck mainly used in transportation and logistics. Usually comes as a semitrailer

Available with an electric engine.
Volvo FMX 25
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 69
Versatile truck, suitable for a variety of purposes, including long haul, regional haul, building and construction.
Available with an electric engine.
Volvo FE 20
Medium-duty truck used for distribution, light construction, utilities and refrigerated transport. Available with
an electric engine.
Volvo FL 17
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 105
Renault truck for long haul and regional haul. Also used in distribution transport and building and construction
transport.
Renault D 4

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 -
Complementary truck for Renault C model. A heavy truck suitable for quarries, logging and various construction
sites.
Renault Master 74
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
USA
Germany
Central Asia
Brands
Digital platform
e-mobility
31
FERRONORDIC ANNUAL REPORT 2023
Introduction
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual report
Service network
At the end of 2023, Ferronordic had 22 workshops in an area that represented approx. 18 percent of the
German truck market (based on registrations). After building the network in 2021, 2022 and 2023, the focus
will shift towards improving network efficiency and performance. The strategy is 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 and thus to increase absorption and build sustainable profitability.
The need for a dense network of workshops is mainly the same as in construction
equipment. The requirements on the workshops can, however, be higher. For
construction equipment, Ferronordic’s mechanics tend to travel to the customer to
service the construction equipment on-site. For trucks, the customers rather tend
to come to Ferronordic’s workshops. Construction equipment and trucks are the
productive assets of Ferronordic’s customers. Any unplanned downtime leads to
a decrease in utilisation and a deterioration in profitability. 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 impor-
tant junctions along the Autobahn, for easy access to our customers. Ferronordic’s
workshops maintain a high and uniform standard in terms of infrastructure, quality
and environment.
Region
No. of
workshops
Description
Northeast 11
Includes Hannover, Leipzig, Dresden, Bautzen,
Dessau, Görschen, Coswig, Barleben, Nordhausen,
Northeim and Peine.
Southwest 11
Includes Frankfurt, Limburg, Bingen, Fulda,
Bergstrasse, Aschaffenburg, Kassel, Bad Hersfeld,
Haiger, Kirn and Simmern.
Germany
Peine
Hannover
Barleben
Coswig
Dessau
Görschen
Bautzen
Dresden
Nordhausen
Leipzig
Kassel
Bergstrasse
Simmern
Kirn
Bingen
Limburg
Halger
Frankfurt
Fulda
Bad Hersfeld
Aschaffenburg
(22) Ferronordics verkstäder i Tyskland vid slutet av 2023
Northeim
Peine
Hannover
Barleben
Coswig
Dessau
Görschen
Bautzen
Dresden
Nordhausen
Leipzig
Kassel
Bergstrasse
Simmern
Kirn
Bingen
Limburg
Halger
Frankfurt
Fulda
Bad Hersfeld
Aschaffenburg
(22) Ferronordic outlets in Germany as of December 2023
Northeim
Market outlook & operations
Markets and driving forces
USA
Germany
Central Asia
Brands
Digital platform
e-mobility
32
FERRONORDIC ANNUAL REPORT 2023
Introduction
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual report
Central Asia (CA)
Ferronordic refers to Central Asia (CA) as Kazakhstan, Uzbekistan, Kyrgyzstan, Tajikistan and Turkmen-
istan. Central Asia is characterised by large amounts of natural resources. In 2023, countries comprising
Central Asia accounted for 2.2 percent of global oil production and 3.8 percent of global gas production
1
.
The region holds substantial reserves of gold (Kazakhstan, Uzbekistan, Kyrgyzstan), zinc (Kazakhstan)
and other minerals. In 2023, Central Asia GDP in current prices amounted to USD 456b with a popula-
tion of 79 million people
2
. In 2023, Ferronordic’s CA operations included Kazakhstan.
Kazakhstan: robust economic performance
Kazakhstan’s economic growth is largely driven by exports of natural resources,
mainly oil and gas, which constitute approx. 30 percent of GDP, but also other
commodities such as copper, zinc and uranium. Kazakhstan is looking to diversify
its economy from dependence on natural resources. The country is investing in
infrastructure and is developing its agricultural sector, which has substantial poten-
tial but remains underinvested. The country is emerging as a major transport and
logistics hub in the region linking Europe and Asia.
Despite geopolitical instability, fluctuating oil prices and oil export disruptions,
Kazakhstan’s economy remained resilient and increased by 5.1 percent in 2023.
Economic growth was driven by both the oil and non-oil sectors. Construction
output increased by 13.3 percent supported by continued public infrastructure
investments. The average oil price in 2023 declined by 18 percent compared to
2022 and amounted to 82 USD/barrel.
In line with global trends, inflation pressure receded in 2023 and inflation de-
creased to 9.8 percent in December 2023 (20.3). The Kazakh currency, the tenge,
depreciated by 2 percent against the Swedish krona from 44.3 at the beginning of
the year to 45.3 at the end of the year.
In 2024, Kazakhstan’s economic growth is expected to slow to 3.1 percent,
mainly due to delays in expanding the Tengiz oilfield. In 2025, GDP growth is
projected to pick up by 5.7 percent. Overall, the foundations of Kazakhstan’s econ-
omy remain strong, and growth is supported by investments in infrastructure and
development of transport and warehousing, which reflects Kazakhstan’s growing
role as a regional hub. Its geographic location, however, also makes it geopolitically
exposed.
³ Source: Energy Institute (EI) Statistical Review of World Energy (2023)

%
Oil production³
0
5
10
15
20
USA
Saudi Arabia
Russia
Canada
Iraq
China
UAE
Iran
Central Asia
17.2
13.0
12.4
6.2
5.0
4.6
4.1
4.0
2.2
0
5
10
15
20
25
%
Gold reserves⁴
Australia
Russia
South Africa
USA
China
Central Asia
Indonesia
Brazil
Canada
20.3
18.8
8.5
5.1
5.1
4.7
4.4
4.1
3.9
0
5
10
15
20
25
%
Gas production³
USA
Russia
Iran
China
Canada
Qatar
Central Asia
Australia
Norway
24.2
15.3
6.4
5.5
4.6
4.4
3.8
3.8
3.0
0
10
20
30
40
%
Zinc reserves⁴
Australia
China
Russia
Peru
Mexico
India
Central Asia
USA
South Africa
29.1
20.0
11.4
9.5
6.4
3.4
3.0
3.0
2.8
Economic and political development
¹ Source: Energy Institute (EI) Statistical Review of World Energy (2023)
² Source: IMF database
Market outlook & operations
Markets and driving forces
USA
Germany
Central Asia
Brands
Digital platform
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33
FERRONORDIC ANNUAL REPORT 2023
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 Central Asia will depend on
several economic and industry trends. These include, for example, 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 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. A total of about 1,000 investment projects worth over
USD 70b are expected to support the construction sector going forward. Several
large construction projects are planned or ongoing. Among others, these include
the construction of a container hub in the Aktau port, construction of the Bakhty-
Ayagoz railway and planned reconstruction of 11,000 km of the country’s road
network. We expect construction activity in Kazakhstan to increase, driven by a
long-term need to improve the country’s ageing and underinvested infrastructure.
Activity in the commodity sector
Construction equipment is used 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 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 process-
ing of these natural resources, as well as the construction and maintenance of
the infrastructure required for it, are important drivers for continued growth and
for future construction projects. Examples of major projects related to the extrac-
tion 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 the Taldykorgan-Usharal gas pipeline.
Gradually maturing customers
On more developed markets, companies that procure construction equipment have
shifted focus from short- to long-term capex programs and from a focus on initial
price to one of total cost of ownership. The total cost of ownership includes fuel
costs, repair and maintenance costs, operator costs, standstill costs and residual
value over the machine’s life cycle. In Kazakhstan, some companies continue to
focus on the initial price. This is gradually changing as companies become more
mature and learn more about long-term efficiency and productivity. The availability
of high-quality aftermarket 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 machines become more advanced.
Central Asia (CA)
Market outlook & operations
Markets and driving forces
USA
Germany
Central Asia
Brands
Digital platform
e-mobility
Introduction
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual report
34
FERRONORDIC ANNUAL REPORT 2023
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 2023
46 10 25 17 3
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
everything from larger pro-
duction machines to smaller
and simpler ones.
Customers’ focus on produc-
tivity and efficiency creates
high demands on spare
parts availability and service
quality.
A 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 machineutilisation
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
Central Asia (CA)
Market outlook & operations
Markets and driving forces
USA
Germany
Central Asia
Brands
Digital platform
e-mobility
35
FERRONORDIC ANNUAL REPORT 2023
Introduction
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual report
Machines sales
In Kazakhstan, Ferronordic sells new and used machines from premium manufac-
turers. The Company’s main partner is Volvo CE, which manufactures machines
such as articulated haulers, wheel loaders and excavators. In addition, Ferronordic
sells backhoe loaders and compact equipment from Mecalac and mobile crushers
and screens from Sandvik. In 2023, sales of new Volvo CE machines, rental,
attachments and Volvo CE aftermarket sales accounted for 92 percent of total
sales in Kazakhstan.
In 2023, Ferronordic increased sales of new machines in units in Kazakhstan
by 20 percent to 72 machines. In terms of revenue, new machine sales increased
by 40 percent to SEK 188m.
Sales of used machines in units increased by 125 percent to 54 machines
and trucks. In terms of revenue, sales of used equipment and trucks increased by
151 percent to SEK 35m.
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 Ferronordic has delivered and that become
an integral part of its customers’ production processes. Ferronordic’s digital sales
platform (see also p. 40) plays an important role in securing this level of uninterrupted
performance 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 2023, aftermarket sales in Kazakhstan increased by
14 percent to SEK 60m.
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 trans-
ported. Ferronordic creates value by operating the machines more efficiently, with
higher utilisation and lower fuel and parts consumption. The Group’s ambition is to
offer contracting services in Kazakhstan in the future.
2023 2022 2021
Change,
%, pp
Units of new machines and trucks 72 60 54 20
Units of used machines and trucks 54 24 6 125
Revenue, SEK m 284 203 143 40
Gross profit, SEK m 43 36 25 18
Operating profit, SEK m 9 16 13 -44
Gross margin, % 15.0 17.8 17.4 -2.8
Operating margin, % 3.1 7.6 8.9 -4.6
SG&A/Revenue, % 10.8 12.5 8.2 -1.7
Working capital/Revenue, % 23.6 -2.9 -8.1 26.5
Machine sales
Aftermarket sales
%
21
79
Net sales by activity
%
25
46
10
17
New machine net sales by industry
3
Oil and gas
General Construction and Other
Road Construction
Mining
Quarries & Aggregates
0
10
20
30
40
50
60
70
80
2023202220212020
Number of machines sold
0
50
100
150
200
250
300
2023202220212020
Revenue, SEKm
The business
Central Asia (CA)
Market outlook & operations
Markets and driving forces
USA
Germany
Central Asia
Brands
Digital platform
e-mobility
36
FERRONORDIC ANNUAL REPORT 2023
Introduction
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual report
Sales of new machines 2023
Type of product Number of sold units Description
Excavators 33 Used for a wide range of purposes, e.g. landscaping, excavation, trenching, demolition, loading etc.
Wheel loaders 4
󰀨
machines.
Road construction
equipment
18
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 3
Articulated towing vehicles for demanding conditions. Areas of use include road construction, quarrying,
mining and waste management.
Backhoe loaders 14
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.
Central Asia (CA)
Market outlook & operations
Markets and driving forces
USA
Germany
Central Asia
Brands
Digital platform
e-mobility
37
FERRONORDIC ANNUAL REPORT 2023
Service network
As of the end of 2023, Ferronordic operated 7 workshops in Kazakhstan.
It is important for dealers of construction equipment to be close to their customers:
1. It is typically difficult and inefficient 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 facili-
ties 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 custom-
ers complement Ferronordic’s network.
Astana
Karaganda
Ust-Kamenogorsk
Aktobe
Atyrau
Shymkent
Almaty
(7) Ferronordic outlets in Kazakhstans as of end of the year 2023
Central Asia (CA)
Introduction
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual report
Market outlook & operations
Markets and driving forces
USA
Germany
Central Asia
Brands
Digital platform
e-mobility
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, produc-
tivity and sustainability metrics in order to best contribute to the success of the
customer’s business and have a minimal negative impact on the environment. At
the core of Ferronordic’s offer are construction equipment from Volvo Construction
Equipment and trucks from Volvo Trucks and Renault Trucks. From December
2023, Ferronordic also represents Hitachi Construction Machinery, Sandvik drill
rigs and Link-Belt cranes in parts of the USA. From 2021, Ferronordic is a partner
for Sandvik’s mobile crusher and screens in Germany and Kazakhstan. From
2019, Ferronordic is also a partner for Mecalac’s backhoe loaders and compact
equipment in Kazakhstan. In order to leverage its organisation and infrastructure
and offer its customers a more complete range of equipment, Ferronordic is seek-
ing partnerships with other leading brands.
Brands
38
FERRONORDIC ANNUAL REPORT 2023
Introduction
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual report
Market outlook & operations
Markets and driving forces
USA
Germany
Central Asia
Brands
Digital platform
e-mobility
39
FERRONORDIC ANNUAL REPORT 2023
Introduction
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual report
Brand Descpription
Volvo Construction Equipment
Prole: 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. From December 2023, Ferronordic is, through its subsidiary Rudd Equip-
ment Company, also an authorised dealer of Volvo CE in parts of the US.
O󰀨er:󰀨
Sales 2023: 58 new machines in Kazakhstan and 43 new machines in US.
Volvo Trucks
Prole: 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: Since 2020, Ferronordic is an authorised dealer and aftermarket partner for Volvo Trucks in an area corresponding to approx. 20 percent of the German truck market.
O󰀨er:󰀨
Sales 2023: 787 new trucks.
Renault Trucks
Prole: 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: Since 2020, Ferronordic is an authorised dealer and aftermarket partner for Renault Trucks in an area corresponding to approx. 20 percent of the German truck market.
O󰀨er:󰀨
Sales 2023: 188 new trucks including 74 light commercial vehicles.
Sandvik
Prole: Swedish Sandvik is a premium brand and a global company specializing in products for mining, rock excavation, rock drilling, rock processing (crushing and screening),
metal cutting and machining. The products are used in areas such as open pit mining, mining and recycling.
Business:󰀩
through its subsidiary Rudd Equipment Company, is also an authorised dealer of Sandvik drills in parts of the USA.
O󰀨er: Mobile crushers and screens and surface drill rigs.
Sales 2023: 1 new drill rig.
Mecalac
Prole: French Mecalac is a leading manufacturer of backhoe loaders, compact wheel loaders and other compact machines.
Business:󰀩
O󰀨er: Backhoe loaders.
Sales 2023: 14 new backhoe loaders.
Hitachi Construction Machinery
Prole: Hitachi Construction Machinery (HCM) is a global manufacturer of excavators, wheel loaders and mining machinery. With over 70 overseas subsidiaries, Hitachi is
one of the most well-known brands in the construction equipment business.
Business: 󰀩
O󰀨er: Rigid trucks and large excavators.
Link-Belt Cranes
Prole: Link-Belt Cranes is an American industrial company that specialises in telescopic and lattice boom cranes. Link-belt is headquartered in Lexington, Kentucky.
Business: 󰀩
O󰀨er: Telescopic and lattice boom cranes.
Sales 2023: 2 new mobile cranes.
Market outlook & operations
Markets and driving forces
USA
Germany
Central Asia
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 unplanned and costly downtime.
Ferronordic has combined its understanding of its customers and the machine
data to build its own system for digital sales support for both 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 for other products.
The Company aims to apply the digital sales logic to its construction equipment
business in the US and to its 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 from the telematics systems flow through the rule engine, where they
are analysed, categorised and combined. The signals are then automatically con-
verted 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 stored 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.
40
FERRONORDIC ANNUAL REPORT 2023
Introduction
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual report
Connectivity increases operational reliability and efficiency
Telematics system
CMR
Market outlook & operations
Markets and driving forces
USA
Germany
Central Asia
Brands
Digital platform
e-mobility
41
FERRONORDIC ANNUAL REPORT 2023
Introduction
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual report
e-mobility
Sustainable transport solutions
Climate change may be the biggest challenge 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 en-
vironmental 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 and mobile charging
equipment. At the end of 2023, this company had a business manager responsible
for promoting electric mobility and two sales consultants. The first investments
in the Company have been in vehicles for an electric truck rental fleet, charging
infrastructure and skills development within the organisation. At the end of 2023,
Ferronordic had 32 Volvo and Renault electric trucks in its electric rental fleet.
These vehicles are available for rental and are used as demo vehicles. Ferronordic
expects to continue to grow its rental fleet in 2024. Since starting its electric rental
business in Germany, Ferronordic has also invested approx. SEK 7.3m in electric
vehicle chargers to our sales outlets. Future investments will build on these assets
and the knowledge built in the sustainable transport area. Ferronordic also sells
electric trucks from Volvo and Renault through its dealer network. In its core dealer
business Ferronordic sold 53 electric trucks in 2023.
For Ferronordic, it is important to be a pioneer in electric mobility as the future
development of the transport industry is built on understanding and having expe-
rience from the changes we see today. This will require attracting new talent 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 trans-
port industry value chain. From being a supplier of trucks and construction equip-
ment 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 ser-
vicing 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
USA
Germany
Central Asia
Brands
Digital platform
e-mobility
Introduction
Sustainability
43
FERRONORDIC ANNUAL REPORT 2023
Introduction
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual report
Sustainability
Ferronordic’s
sustainability approach
In line with
international standards
Transparency
Planet first
Fair workplace
Sustainable offer
Sustainability risks
Outlook for 2024
EU Taxonomy
KPI index
EXTRACTING
RAW MATERIAL
PARTS
SUPPLY
MANU-
FACTURING DISTRIBUTION
USER
ENERGY RECOVERY
INCINERATION, LANDFILL
4
.
R
E
C
Y
C
L
E
3
.
R
E
M
A
N
U
F
A
C
T
U
R
E
2
.
R
E
F
U
R
B
I
S
H
1
.
S
E
R
V
I
C
E
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 stakeholders 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 opera-
tions. Sustainability is essential to Ferronordic’s constant efforts to improve and
build resilience.
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
Ferronordic’s sustainability approach
This sustainability report concerns Ferronordic’s reporting of non-financial information for the financial
year 2023 in accordance with Swedish legislation. Information and key figures presented refer to the
entire Group, excluding the USA, unless stated otherwise.
on system thinking, which helps Ferronordic understand how the Company’s oper-
ations 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. 45). 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. 45). 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.
In 2023, work began on conducting a double materiality analysis, which will
form the basis of the Company’s sustainability report in accordance with the CSRD
(Corporate Sustainability Reporting Directive) and ESRS (European Sustainability
Reporting Standards). Based on the results from the double materiality analysis,
the sustainability goals, risks and impacts communicated in this report will be
reviewed. A new gap analysis was also carried out during the first quarter of 2024.
As of October 2023, Ferronordic has also established a Sustainability and Ethics
committee.
44
FERRONORDIC ANNUAL REPORT 2023
Introduction
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual report
Sustainability
Ferronordic’s
sustainability approach
In line with
international standards
Transparency
Planet first
Fair workplace
Sustainable offer
Sustainability risks
Outlook for 2024
EU Taxonomy
KPI index
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 ensure that we manage our environmental impact throughout the
value chain of delivering our products and services.
Our Equality, Diversity, and Non-Discrimination Policy includes 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. Ferronordic’s
legal and compliance department oversees this process.
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
45
FERRONORDIC ANNUAL REPORT 2023
Introduction
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual report
Sustainability
Ferronordic’s
sustainability approach
In line with
international standards
Transparency
Planet first
Fair workplace
Sustainable offer
Sustainability risks
Outlook for 2024
EU Taxonomy
KPI index
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. The materiality
analysis underlying this sustainability report was carried out in 2021 before the
ongoing conflict in Ukraine.
In 2023, work began on conducting a double materiality analysis, which will
form the basis of the Company’s sustainability report in accordance with CSRD
and ESRS.
Stakeholder Dialogue
The conducted materiality analysis included stakeholder dialogue consisting of
surveys, in-depth interviews, investor meetings, customer conversations and
Transparency
Ferronordic reports ESG information using methodologies widely adopted by the industry.
employee surveys. Other essential groups participating in the dialogue were sup-
pliers, partners, authorities, municipalities and non-profit organisations. In 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.
Material Aspects
The results of the materiality analysis carried
out in 2021 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
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
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
46
FERRONORDIC ANNUAL REPORT 2023
Introduction
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual report
Sustainability
Ferronordic’s
sustainability approach
In line with
international standards
Transparency
Planet first
Fair workplace
Sustainable offer
Sustainability risks
Outlook for 2024
EU Taxonomy
KPI index
Ferronordic, as well as its partners, has high ambitions in terms of
sustainability. Ferronordic applies an environmental perspective from
production, use, maintenance and repair to reuse and recycling. We have
actively continued to promote electric trucks in Germany. The ratio of
sold electric trucks in 2023 was 4.79 percent of total share of sold trucks.
During 2023, Ferronordic was awarded up to EUR 23m in government
subsidies for further investments in electric 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 opera-
tions. 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 oper-
ations. During 2021, 9 out of 14 workshops were certified. In 2023, 16 out
of 22 workshops in Germany were 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 for 2023 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. Business travel data come
from the Company’s travel agencies.
Planet first
Electricity consumption 2023 2022 2021 2020 2019
Electricity, MWh
1
1,407 4,186 3,250 2,501 2,123
Electricity rate
2
0.59 2.83 3.19 - -
Renewable energy share, %
3
80.6 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. The 2023 data
refer to Germany and Kazakhstan.
2
MWh/revenue. Applies to Germany only and was first calculated in 2021.
3
Refers to Germany only.
Tons of CO
2
eq- emissions
by source 2023 2022 2021 2020 2019
Electricity
4
241 1,667 1,184 882 754
Fuel 882 74,134
5
65,253 36,057 32,879
Business travel
6
543 879 878 385 1,115
Total 1,666 76,680 67,314 37,324 34,747
4
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. The 2023
data refer to Germany and Kazakhstan.
5
2022 is the first year that car data from Germany is included.
6
Excluding Germany 2019 and 2020 and domestic travel in Russia. In addition,
strongly affected by the pandemic. 2023 data refer to Sweden, Germany and
Kazakhstan.
47
FERRONORDIC ANNUAL REPORT 2023
Introduction
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual report
Sustainability
Ferronordic’s
sustainability approach
In line with
international standards
Transparency
Planet first
Fair workplace
Sustainable offer
Sustainability risks
Outlook for 2024
EU Taxonomy
KPI index
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 compo-
nents 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
proportion 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. The acquisition of the American company Rudd Equipment Company, Inc.
in December 2023 means that Ferronordic is once again active in machine and
component rebuild. Rudd’s rebuild center specialises in the repair of major compo-
nents for construction and mining equipment. Rudd also offers mid-life rebuild for
machines.
Information regarding waste generation in the Company’s markets shows that
the largest categories consist of plastic and incineration. Current data provides an
overview of which waste categories Ferronordic should focus on to increase the
proportion of recycling.
Rebuild categories¹ December 2023
Transmissions
2
Cylinders
1
Other components
3
1
In units.
4
18
16
11
%
22
15
Waste per category
*
3
Less than 1 percent.
Plastic
Incineration
LED batteries
Carton
Oil
Metal
Tires
3
Paper
3
Glass
3
Wood
3
Electronic waste
3
Fluorescent lamps
3
Other
10
48
FERRONORDIC ANNUAL REPORT 2023
Sustainability
Ferronordic’s
sustainability approach
In line with
international standards
Transparency
Planet first
Fair workplace
Sustainable offer
Sustainability risks
Outlook for 2024
EU Taxonomy
KPI index
Introduction
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual report
Work environment
Health and safety are core aspects of Ferronordic’s business. Some of the Com-
pany’s employees work in challenging 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 injuries. Ferronordic works sys-
tematically and proactively with employees’ working environment. This includes,
among other things, training. It also includes frequent inspections 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.
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 contrib-
utes 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 em-
ployee satisfaction and maintain diversity. By 2025, we want to reach 80 percent
employee engagement and 30 percent diversity.
Diversity 2023 2022 2021 2020 2019
Women in Board, % 33 33 29 17 17
Women in management, %
7
25 20 32 28 -
Total women employee, % 17 15 13 10 13
Diversity, %
8
20 24 21 - -
Employee engagement, %
9
- - 77.2 - -
7
First calculated year 2020.
8
First calculated year 2021. Calculated as employees of diverse backgrounds/average total
headcount.
9
First calculated year 2021. Engagement is measured every second year, but has this year
been postponed due to organisational changes in Germany. Gallup Q12 employee satisfaction
survey methodology.
Health & Safety 2023
1
2022 2021 2020 2019
Hours training total 4,298 57,227 61,027 49,761 59,954
Hours training/employee 9.5 36 34.1 33.9 47.9
Safety hours training total 2,041 22,844
2
6,810 4,282 9,344
Sick days/employee
3
14.2 10.2 5.9 4.9 2.6
Near-miss
4
0 114 129 48 169
Minor injuries
5
47 50 24 1 1
Major injuries 16 16 5 3 4
Fatalities 0 1 0 0 0
LTIFR Germany
6
16.72 18.11 3.87 - -
1
Unless otherwise stated, all data for 2023 refer to Germany and Kazakhstan.
2
The increase during 2022 was 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. After evaluation, the
number provided in last years’ report was incorrect and has here been adjusted.
3
The increase in 2022 was mainly due to the pandemic.
4
2019–2022 refers only to Russia and Kazakhstan. The changes between the years are mainly
due to the pandemic. The 2023 data refer only to Kazakhstan.
5
Minor and major occupational accidents from 2021 and 2022 also include Germany.
6
Lost Time Injury Frequency Rate. First calculated year 2021.
Fair workplace
49
FERRONORDIC ANNUAL REPORT 2023
Introduction
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual report
Sustainability
Ferronordic’s
sustainability approach
In line with
international standards
Transparency
Planet first
Fair workplace
Sustainable offer
Sustainability risks
Outlook for 2024
EU Taxonomy
KPI index
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 relevant level and
competence. We run an Anti-corruption Policy to adhere to Ferronordic’s
commitment to zero tolerance to corruption (for more information, see p. 44).
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 state-
ments 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 management 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 facilitates a mutual understanding
of the importance of our shared environmental footprint. Ferronordic only
works with premium manufacturers. These producers have for a long time
been working to reduce their environmental impact. This work and the
close cooperation with its partners help Ferronordic reduce its supply chain
footprint. 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
Anti-corruption and compliance 2023 2022 2021 2020 2019
Percentage of employees who have
completed anti-corruption training, %
100 100 100 100 100
Number of training hours in
anti-corruption/employee
0.56 1.14 1.08 1.06 1.04
Reported whistle-blower incidents 1 4 2 2 1
Whistleblower incidents which led to action 0 0 1 0 1
50
FERRONORDIC ANNUAL REPORT 2023
Introduction
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual report
Sustainability
Ferronordic’s
sustainability approach
In line with
international standards
Transparency
Planet first
Fair workplace
Sustainable offer
Sustainability risks
Outlook for 2024
EU Taxonomy
KPI index
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 performance, 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 2023 was 4.01 percent.
Sustainable offer
By a sustainable offer, we mean products and services with minimum emissions (given the techno-
logy) and resource waste, both in production and for the customer, that enable maximum recycling.
Sustainable offerings KPI 2023 2022 2021
Share of total sales, % 4.01 4.63 0.95
51
FERRONORDIC ANNUAL REPORT 2023
Introduction
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual report
Sustainability
Ferronordic’s
sustainability approach
In line with
international standards
Transparency
Planet first
Fair workplace
Sustainable offer
Sustainability risks
Outlook for 2024
EU Taxonomy
KPI index
Sustainability risks
Risk mapping
To identify and calibrate sustainability risks, Ferronordic carried out a 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 underestimated. The
mapping of sustainability risks is linked to Ferronordic’s overall process for risk
management. During 2023, Ferronordic began a double materiality analysis. This
process will continue throughout 2024 and will help us identify and update risks
annually.
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 and compliance
personnel to identify, describe and manage risks. The level of risk and the imple-
mentation of controls are reported by the employees responsible for the relevant
risks. The risks and controls are reviewed annually. During 2023, the Group’s risk
management process included Sweden, Germany and Kazakhstan.
• Sustainable transport solution – In 2024, we plan to make
further investments in electric trucks and charging stations
as well as starting to operate zero emission trucks ourselves.
• Mapping of the value chain’s climate footprint – In 2024,
Ferronordic intends to continue mapping the Company’s CO
2
footprint throughout the value chain.
• Impact assessment of climate change – In 2024, Ferro nordic
intends to continue 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 – Aware-
ness of human rights is increasing among companies world-
wide. The issue is central to both consumers and interest
groups. Focus is mainly on the supply chain, where the most
significant challenges are. More regulations are also expect-
ed 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. During 2023, Ferronordic started to
also review other parts of its value chain with risks linked to
human rights, and will continue this review during 2024.
• Corporate Sustainability Reporting Directive (CSRD) – In
2024, preparations will continue for the transition to reporting
in accordance with the EU’s new directive for sustainability
reporting, CSRD.
• Sustainability targets – In 2024, Ferronordic will continue
to review its sustainability targets as the double materiality
analysis continues.
Outlook for 2024
52
FERRONORDIC ANNUAL REPORT 2023
Sustainability
Ferronordic’s
sustainability approach
In line with
international standards
Transparency
Planet first
Fair workplace
Sustainable offer
Sustainability risks
Outlook for 2024
EU Taxonomy
KPI index
Introduction
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual report
53
FERRONORDIC ANNUAL REPORT 2023
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 2022, an extended analysis of Ferronordic’s
operations in relation to the Taxonomy has been carried out in 2023.
Sustainability
Ferronordic’s
sustainability approach
In line with
international standards
Transparency
Planet first
Fair workplace
Sustainable offer
Sustainability risks
Outlook for 2024
EU Taxonomy
KPI index
The EU Taxonomy Regulation is a classification system for sustainable economic
activities in relation to the European Union’s six environment objectives:
1. Climate change mitigation (CCM)
2. Climate change adaptation (CCA)
3. Sustainable use and protection of water and marine resources (WTR)
4. Transition to a circular economy (CE)
5. Pollution prevention and control (PPC)
6. Protection and restoration of biodiversity and ecosystems (BIO)
An activity is considered sustainable according to the EU Taxonomy when it
contributes substantially to one or several of the six environmental objectives,
without causing significant harm to any of the others, and at the same time meets
minimum safeguards.
The assessments for Taxonomy-eligibility and Taxonomy-alignment are based
on our best interpretation of the Taxonomy Regulation and the currently available
guidelines from the European Commission.
Methodology to identify eligible activities
Ferronordic has identified its taxonomy-eligible activities by screening the economic
activities in the Climate Delegated Act, the Complementary Climate Delegated Act,
the Environmental Delegated Act, and the amendments to the Climate Delegated
Act. Ferronordic has identified that a small proportion of its economic activities
qualify as eligible for Climate Change Mitigation (CCM), and a bigger proportion
qualifies as eligible for Transition to a Circular Economy (CE).
Climate Change Mitigation (CCM)
• For its new workshops, Ferronordic invests in solar cells to generate electricity
for its own requirements and sells any excess power generated back to the
electricity market. Such investments are recognised as CapEx under Electricity
generation using solar photovoltaic technology (CCM 4.1)
• Ferronordic invests in battery electric trucks to provide sustainable transport
solutions, via rental or transport as-a-service arrangements. Net investments into
Ferronordic’s fleet for electric rental are recognised as CapEx under Infrastructure
enabling low-carbon road transport and public transport (CCM 6.15). Ferronordic
also sells electric trucks to customers, but this turnover is not recognised as
Ferro nordic neither manufactures nor operates these trucks as its primary business.
• To support its customers and facilitate the transition to low-emission transport,
Ferronordic invests in mobile chargers. Ferronordic also invests in fixed chargers
for customers and employees at its workshops. Such investments are recognised
as CapEx under Installation, maintenance and repair of charging stations for
electric vehicles in buildings and parking spaces attached to buildings (CCM 7.4).
• To offer service and repairs to its customers, Ferronordic invests and maintains
properties (workshops). Such investments and maintenance are recognised
as CapEx and OpEx respectively under Acquisition and ownership of buildings
(CCM 7.7).
Transition to a Circular Economy (CE)
Ferronordic’s customers buy construction equipment and trucks. The core of
Ferronordic’s business is to service and repair the machines and trucks it sells or
rents to its customers. The productivity (driven by uptime and operational perfor-
mance) and lifetime of these machines and trucks are critical to the profitability of
Ferronordic’s customers. Therefore, pre-emptive, preventive and reactive repairs
and maintenance is a key part of Ferronordic’s business. In addition to sales and
rental of new and used construction equipment and trucks, service and spare
parts, Ferronordic also rebuilds and remanufactures used equipment for an
extended productive life.
• Ferronordic repairs, refurbishes, and maintains construction equipment and
trucks for its customers. Sales from service on such activities are recognised as
revenue under Repair, refurbishment and remanufacturing (CE 5.1).
• Ferronordic stores, sells and installs spare parts to the machines and trucks of
its customers. Maintaining a high availability of spare parts, being close to our
customers’ equipment and training mechanics to apply the right spare parts in the
right way is critical to the businesses of Ferronordic’s customers. Sales of spare
parts are recognised as revenue under Sale of spare parts (CE 5.2).
• Ferronordic wants to provide the most efficient solution to its clients. Depending
on the intensity of their work requirements, difference customers need different
levels of productivity from their machines. As part of this effort, Ferronordic offers
trade-in solutions (accepts a used machine or truck as partial payment for a new)
and used equipment to customers for whom a used machine may be a more
efficient solution. Sales of used equipment is recognised as revenue under Sale
of second-hand goods (CE 5.4).
54
FERRONORDIC ANNUAL REPORT 2023
Introduction
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual report
Sustainability
Ferronordic’s
sustainability approach
In line with
international standards
Transparency
Planet first
Fair workplace
Sustainable offer
Sustainability risks
Outlook for 2024
EU Taxonomy
KPI index
Methodology to identify aligned activities
For an economic activity to be considered taxonomy-aligned – and hence envi-
ronmentally sustainable – it needs to substantially contribute to at least one of the
EU’s six environmental objectives and not significantly harm any of the others.
In addition, it needs to be carried out in adherence with certain minimum safe-
guards as regards social and governance aspects of sustainability. Only activities
in Climate Change Mitigation and Climate Change Adaptation are screened for
alignment in the 2023 EU taxonomy.
Ferronordic believes that all its eligible activities meet the minimum safeguard
requirements. As presented in the table below, the result shows that Ferronordic
currently meets the requirements for alignment for certain of the identified eligible
economic activities in climate change mitigation. Most of Ferronordic’s eligible ac-
tivities are however in the circular economy objective. Circular economy activities
are not screened for alignment in 2023 and are thus not recognised as aligned.
Substantial contribution
Ferronordic has identified a number of activities that fulfill the technical screening
criteria of substantially contributing to climate change mitigation. They consist of
Electricity generation using solar photovoltaic technology (CCM 4.1), Infrastructure
enabling low-carbon road transport and public transport (CCM 6.15), Installation,
maintenance and repair of charging stations for electric vehicles in buildings (and
parking spaces attached to buildings) (CCM 7.4), and Acquisition and ownership of
buildings (CCM 7.7).
Doing no significant harm
Taxonomy-eligible activities have been assessed against each of the do no signif-
icant harm (DNSH) criteria to consider if they also qualify as aligned. In absence
of regulatory guidance and market practice, Ferronordic recognises that there is
a meaningful scope for interpretation of the DNSH criteria and have made its best
efforts to test its eligible activities for alignment.
The Do No Significant Harm Criteria of one eligible activity has been tested on
all other objectives:
With regards to CCM 7.7, Ferronordic has not procured documentation to
show that some of its buildings meet the hurdle requirements for energy efficiency.
As such, no CapEx or OpEx under CCM 7.7 is recognised as aligned.
As for Ferronordic’s other economic activities in Climate Change Mitigation
(CCM) and Climate Change Adaptation, these include Electricity generation using
solar photovoltaic technology (CCM 4.1), Infrastructure enabling low-carbon road
transport and public transport (CCM 6.15), and Installation, maintenance and
repair of charging stations for electric vehicles in buildings (and parking spaces
attached to buildings) (CCM 7.4). The manufacturing of solar cells, batteries for
electric trucks and machines and mobile charging stations in Ferronordic’s up-
stream value chain involves the mining, processing and transport of minerals,
energy intense manufacturing and components that may currently be hard to
re cycle. While Ferronordic recognises that these activities, which all fall under
Climate Change Mitigation, are likely to have some negative impact on climate
change adaptation, water and marine resources, transitioning to a circular economy,
pollution and biodiversity and ecosystems, Ferronordic believe that its eligible
climate change mitigation activities do no significant harm to the other objectives.
Minimum safeguards
Ferronordic’s Human rights policy outlines the Group’s commitment to respect
human rights and is aligned with the UN Guiding Principles on Business and
Human Rights and OECD’s guidelines for multinational enterprises, including the
principles of the Declaration of the International Labour Organisation on Funda-
mental Principles and Rights at Work and the International Bill of Human Rights,
both in Ferronordic’s own operations and its supply chain. Ferronordic’s Code of
Conduct, governance practices and systematic due diligence serve to uphold mini-
mum safeguards on human rights, corruption, taxation, and fair competition.
The minimum safeguard criteria have been assessed at Group level, and thus
all economic activities identified as taxonomy-aligned are covered by Ferronordic’s
Group-wide policies and procedures.
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 turn-
over is Ferronordic’s total sales and rental income in 2023, which includes the
IFRS 15 and the IFRS 16 income according to the EU Taxonomy turnover defini-
tion. The total CapEx is the Group’s total capital expenditure in 2023, as presented
in the line of additions, excluding goodwill additions, in Note 11, Property, plant and
equipment. The total OpEx covers the maintenance expenses, short-term lease
costs, non-capitalised research and development costs, and repair and mainte-
nance costs at the Group level. Ferronordic has worked to ensure that nothing has
been double counted. The risk of double counting is reduced since Ferronordic
only reports against two of the taxonomy’s objectives: Climate Change Mitigation
and Circular Economy.
55
FERRONORDIC ANNUAL REPORT 2023
Introduction
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual report
Turnover
Sustainability
Ferronordic’s
sustainability approach
In line with
international standards
Transparency
Planet first
Fair workplace
Sustainable offer
Sustainability risks
Outlook for 2024
EU Taxonomy
KPI index
Substantial Contribution Criteria
DNSH criteria
('Does Not Significantly Harm')
Economic Activities (1)
Code (2)
Turnover (3)
Proportion of Turnover (4)
Climate Change Mitigation (5)
Climate Change Adaptation (6)
Water (7)
Pollution (8)
Circular Economy (9)
Biodiversity and ecosystems (10)
Climate Change Mitigation (11)
Climate Change Adaptation (12)
Water (13)
Pollution (14)
Circular Economy (15)
Biodiversity (16)
Minimum Safeguards (17)
Proportion of Taxonomy-
aligned (A.1.) or eligible
(A.2.) turnover, year N-1 (18)
Category (enabling activity) (19)
Category (transitional
activity) (21)
SEK %
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y/N Y/N Y/N Y/N Y/N Y/N Y/N % E T
A. TAXONOMY-ELIGIBLE ACTIVITIES 35%
A.1. Environmentally sustainable activities (Taxonomy-aligned)
Turnover of environmentally sustainable
activities (Taxonomy-aligned) (A.1)
0,00 0% 0% 0% 0% 0% 0% 0% Y Y Y Y Y Y Y 0%
Of which enabling 0,00 0% 0% 0% 0% 0% 0% 0% E
Of which transitional 0,00 0% 0% 0% 0% 0% 0% 0% T
A.2 Taxonomy-Eligible but not environmentally sustainable
activities (not Taxonomy-aligned activities)
5.1 Repair, refurbishment and remanu facturing – Circular
economy
CE5.1 292,194,673 10% N/EL N/EL N/EL N/EL EL N/EL EL
5.2 Sale of spare parts – Circular economy CE5.2 444,792,650 16% N/EL N/EL N/EL N/EL EL N/EL EL
5.3 Sale of second-hand goods – Circular economy CE5.4 276,764,044 10% N/EL N/EL N/EL N/EL EL N/EL EL
Turnover of Taxonomy-eligible but not environmentally
sustainable activities (not Taxonomy-aligned activities) (A.2)
1,013,751,367 35% 35% 36%
Turnover of Taxonomy-eligible activities (A.1+A.2) 1,013,751,367 35% 35% 36%
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
Turnover of Taxonomy-non-eligible activities 1,849,248,633 65%
Total 2,863,000,000 100%
56
FERRONORDIC ANNUAL REPORT 2023
Introduction
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual report
CapEX
Sustainability
Ferronordic’s
sustainability approach
In line with
international standards
Transparency
Planet first
Fair workplace
Sustainable offer
Sustainability risks
Outlook for 2024
EU Taxonomy
KPI index
Substantial Contribution Criteria
DNSH criteria
(‘Does Not Significantly Harm’)
Economic Activities (1)
Code (2)
Absolute CapEx (3)
Proportion of CapEx (4)
Climate Change Mitigation (5)
Climate Change Adaptation (6)
Water (7)
Pollution (8)
Circular Economy (9)
Biodiversity and ecosystems (10)
Climate Change Mitigation (11)
Climate Change Adaptation (12)
Water (13)
Pollution (14)
Circular Economy (15)
Biodiversity (16)
Minimum Safeguards (17)
Proportion of Taxonomy-
aligned (A.1.) or eligible (A.2.)
CapEx, year N-1 (18)
Category (enabling
activity) (19)
Category (transitional
activity) (21)
SEK %
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL Y/N Y/N Y/N Y/N Y/N Y/N Y/N
%
E T
A. TAXONOMY-ELIGIBLE ACTIVITIES 26%
A.1 Environmentally sustainable activities (Taxonomy-aligned)
4.1 Electricity generation using solar photovoltaic technology CCM4.1 1,492,400 1% EL N/EL N/EL N/EL N/EL N/EL Y Y Y Y EL
6.15 Infrastructure enabling low-carbon road transport and public transport CCM6.15 34,813,956 23% EL N/EL N/EL N/EL N/EL N/EL Y Y Y Y Y Y EL E
7.4 Installation, maintenance and repair of charging stations for electric
vehicles in buildings (and parking spaces attached to buildings)
CCM7.4 2,865,925 2% EL N/EL N/EL N/EL N/EL N/EL Y Y EL E
CapEx of environmentally sustainable activities (Taxonomy-aligned) (A.1) 39,172,281 26% 0% 0% 0% 0% 0% 0% Y Y Y Y Y Y Y 0%
Of which enabling 34,813,956 25% 0% 0% 0% 0% 0% 0% E
Of which transitional 0 0% 0% 0% 0% 0% 0% 0% T
A.2 Taxonomy-eligible but not environmentally sustainable activities
(not Taxonomy-aligned activities)
CapEx of Taxonomy-eligible but not environmentally sustainable activities
(not Taxonomy-aligned activities) (A.2)
0,00 0% 0%
CapEx of Taxonomy-eligible activities (A.1+A.2) 39,172,281 26% 18%
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
Capex of Taxonomy-non-eligible activities 109,827,719 74%
Total 149,000,000 100%
57
FERRONORDIC ANNUAL REPORT 2023
Introduction
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual report
OpEX
Sustainability
Ferronordic’s
sustainability approach
In line with
international standards
Transparency
Planet first
Fair workplace
Sustainable offer
Sustainability risks
Outlook for 2024
EU Taxonomy
KPI index
Substantial Contribution Criteria
DNSH criteria
(‘Does Not Significantly Harm’)
Economic Activities (1)
Code (2)
Absolute OpEx (3)
Proportion of OpEx (4)
Climate Change Mitigation (5)
Climate Change Adaptation (6)
Water (7)
Pollution (8)
Circular Economy (9)
Biodiversity and ecosystems (10)
Climate Change Mitigation (11)
Climate Change Adaptation (12)
Water (13)
Pollution (14)
Circular Economy (15)
Biodiversity (16)
Minimum Safeguards (17)
Proportion of Taxonmy-
aligned (A.1.) or eligible (A.2.)
OpEx, year N-1 (18)
Category (enabling
activity) (19)
Category(transitional
activity) (21)
SEK %
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL Y/N Y/N Y/N Y/N Y/N Y/N Y/N % E T
A. TAXONOMY-ELIGIBLE ACTIVITIES 1%
A.1. OpEx of environmentally sustainable activities (Taxonomy-aligned)
Environmentally sustainable activities (Taxonomy-aligned) (A.1) 0,00 0% 0% 0% 0% 0% 0% 0% Y Y Y Y Y Y Y 0%
Of which enabling 0,00 0% 0% 0% 0% 0% 0% 0% E
Of which transitional 0,00 0% 0% 0% 0% 0% 0% 0% T
A.2 Taxonomy-Eligible but not environmentally sustainable activities
(not Taxonomy-aligned activities)
7.7 Acquisition and ownership of buildings CCM7.7 4,836,166 1% EL N/EL N/EL N/EL N/EL N/EL EL
OpEx of Taxonomy-eligible but not environmentally sustainable activities
(not Taxonomy-aligned activities) (A.2)
4,836,165 1% 1% 1%
OpEx of Taxonomy-eligible activities (A.1+A.2) 4,836,165 1% 1% 1%
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
OpEx of Taxonomy-non-eligible activities 488,163,834 99%
Total 493,000,000 100%
58
FERRONORDIC ANNUAL REPORT 2023
Introduction
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual report
Sustainability
Ferronordic’s
sustainability approach
In line with
international standards
Transparency
Planet first
Fair workplace
Sustainable offer
Sustainability risks
Outlook for 2024
EU Taxonomy
KPI index
Nuclear energy related activities

energy from nuclear energy processes with minimal waste from the fuel cycle.
NO

including for district heating or industrial processes, such as hydrogen production, as well as for safety upgrades of these, using best available technology.
NO

heating or industrial processes, such as hydrogen production from nuclear energy, as well as safety upgrades of these.
NO
Fossil gas related activities

fuels.
NO

electricity using fossil gaseous fuels.
NO

gaseous fuels.
NO
Mandatory disclosure on nuclear and fossil
gas related activities
59
FERRONORDIC ANNUAL REPORT 2023
Introduction
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual report
KPI index
Indicator Market Unit 2019 2020 2021 2022 2023¹ 2023 vs. 2022 YoY
Number of Board members Group # 6 6 7 6 6 0%
Number of Board meetings per year Group # 10 14 9 16 8 -50%
Board meeting attendance Group % 93 98 100 98 100 2%
Women members of Board Group % 17 17 29 33 33 0%
Nationalities present in Board Group # 1 1 1 1 1 0%
Independent members of Board Group # 4 4 5 4 4 0%
Electricity consumption Group MWh 2,123 2,501 3,250 4,186 1,407 -66%
Fuel consumption Group 1,000 l 12,894 14,140 25,589 29,072 370 -99%
Flight miles Group 1,000 km 9,980 3,549 8,034 6,780 2,348 -65%
CO emissions related to flights Group tons 1,115 385 878 879 543 -38%
Share of electric trucks sold Group % 1.2 4.79 299%
Electricity rate (MWh/revenue) Group % 3.20 2.80 0.59 -79%
Renewable energy share GER % 0 0 0 0 80.6 81%
Transmissions USA # 2 -
Cylinder USA # 1 -
Other components USA # 3 -
Incineration Group % 28 26 18 -31%
Tires Group % 26 22 <1 -
Metal Group % 10 10 4 -60%
Oil Group % 10 14 11 -21%
Plastic Group % 9 9 22 144%
Carton Group % 7 8 15 88%
LED batteries Group % 7 7 16 129%
Paper Group % 1 2 <1 -
Glass Group % 1 1 <1 -
Wood Group % 1 1 <1 -
Electronic waste Group % <1 <1 <1 -
Fluorescent lamps Group % <1 <1 <1 -
Sustainability
Ferronordic’s
sustainability approach
In line with
international standards
Transparency
Planet first
Fair workplace
Sustainable offer
Sustainability risks
Outlook for 2024
EU Taxonomy
KPI index
1
Group data for 2023 refers to Germany, Kazakhstan and Sweden.
60
FERRONORDIC ANNUAL REPORT 2023
Introduction
Market outlook
& operations Sustainability The share
Corporate
governance
Formal
annual report
Indicator Market Unit 2019 2020 2021 2022 2023¹ 2023 vs. 2022 YoY
Lost Time Injury Frequency Rate GER # 3.87 18.11 16.72 -8%
Accidents at work (minor) Group # 1 1 24 50 47 -6%
Accidents at work (major) Group # 4 3 5 16 16 0%
Fatalities Group # 0 0 0 1 0 -100%
Personal protective equipment Group EUR
2
389,160 330,620 492,200 646,100 64,670 -90%
ISO 45001 Certification GER Y/N N N N N N
ISO 14001 Certification GER Y/N Y Y Y Y Y
ISO 9001 Certification GER Y/N Y Y Y Y Y
Internal HSE inspections Group # 52 15 72 113 36 -68%
Number of violations discovered Group # 618 315 855 1,071 134 -87%
Number of violations closed on time Group % 60 67 100 95 84 -12%
Safety walks Group # 1,480 655 1,104 1,208 64 -95%
Near-miss
4
CA # 169 48 129 114 0 -100%
Closed Near-miss reportings
4
CA % 0 -1 1 1 0 -100%
Near-miss frequency rate
4
CA # 9 8 0 -100%
Safety training Group hrs 9,344 4,282 6,810 22,844 2,041 -91%
Anti-corruption training Group hrs 1,239 1,556 1,930 2,302 257 -89%
Anti-corruption training/employee Group hrs/# 1.04 1.06 1.08 1.14 0.56 -51%
Reported whistleblower incidents Group # 1 2 2 4 1 -75%
Whistleblower incidents which led to action Group # 1 0 1 0 0 -
Number of employees at end of year Group # 1,189 1,469 1,791 1,842 827 -55%
Employee turnover Group % 13 15 14 15 23 53%
Average age of employees at end of year Group # 37 39 39 39 39 0%
Proportion of female/male employees Group % 13 10 13 15 17 13%
Proportion of female/male employees in executive
management
Group % 11 16 15 20 14 -30%
Proportion of female/male employees in management Group % - 28 32 20 25 25%
Nationalities in workforce Group # 7 19 20 23 27 17%
Diversity (employees of diverse backgrounds/average
total headcount)
Group % 21 24 20 -17%
Vacancies announced internally in year Group % 88 93 93 90 63 -30%
Vacancies filled internally in year Group % 60 20 25 20 43 115%
Internal promotions made in year Group # 268 187 273 148 11 -93%
Training hours provided in year Group hrs 56,954 49,761 61,027 57,227 4,298 -92%
Total training hours per Employee Group hrs/# 48 34 34 36 9.5 -74%
Work-related serious accidents or fatalities in year Group # 4 3 5 7 0 -100%
Sick-days in year Group # 3,097 7,189 10,502 18,797 6,435 -66%
Average number of sick-days per employee Group # 2.6 4.9 5.9 10.3 14.2 38%
Number of partners that signed a Code of Conduct Group # 4 5 7 40%
Number of partners that signed a policy on Human Rights Group # 4 4 7 75%
Share of sustainable offerings sold Group % 0.95 4.63 4.01 -13%
KPI Index, cont.
Sustainability
Ferronordic’s
sustainability approach
In line with
international standards
Transparency
Planet first
Fair workplace
Sustainable offer
Sustainability risks
Outlook for 2024
EU Taxonomy
KPI index
1
Group data for 2023 refers to Germany, Kazakhstan and Sweden.
2
Due to the sale of the Russian business, EUR amounts calculated using the average exchange rate (RUB to EUR) of each year.
3
After evaluation, the number provided in last years’ report was incorrect and has here been adjusted.
4
Near-miss data for 2019–2022 refer to Russia and CA. Data for 2023 refer only to CA.
³
Introduction
The share
62
FERRONORDIC ANNUAL REPORT 2023
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 2023, the share price was SEK 71.00, which is a decrease
7.4 percent compared to the previous year. This corresponds to a decrease in the
market capitalisation of the Company to SEK 1,032m (1,114). 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 cap 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 2023, 12,978,165 shares (40,492,661) were traded at a total value of SEK 1,051m
(2,929). The average turnover was 51,706 shares (160,050) for SEK 4,259m (11.6)
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 2023 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 2024, the Board
proposes no dividend to be paid out.
Ownership
On 31 December 2023, the number of shareholders amounted to 11,520 (12,248).
Foreign ownership amounted to 9 percent (18). Among the ten largest shareholders,
a few changes took place in 2023. Skandinavkonsult, Avanza Pension, Lars
Corneliusson, Altocumulus and Per Arwidsson (and associated persons) increased
their holdings, while SEB Life International and PEG Capital Partners AB decreased
their positions. Other changes are of a minor nature.
The Ferronordic share
Data per share (SEK) 2023 2022 2021 2020 2019
Operating profit -7.9 17.0 33.2 22.6 24.6
- after full dilution -7.7 17.0 33.1 22.6 24.6
Profit -7.4 30.3 23.3 15.3 17.3
- after full dilution -7.2 30.3 23.3 15.3 17.3
Operating cash flow -1.9 14.8 31.5 47.7 -22.7
- after full dilution -1.8 14.8 31.5 47.7 -22.7
Equity 111.6 128.9 75.8 55.5 61.3
- after full dilution 109 128.9 75.8 55.5 61.3
Stock price by year end 71.00 76.70 337 157 163
Highest share price 98.95 367.50 359 173 167
Lowest share price 64.25 28.15 154 73 125
Dividend
1
7.5 7.5 - 7.5 4.3
1
The Board’s proposal 2022.
Significant shareholders as at end of 2023
2
Shareholders
Number of
shares
Share of capital
and votes, %
1. Skandinavkonsult i Stockholm AB
3
2,450,000 16.9
2. Avanza Pension 1,328,964 9.1
3. Lars Corneliusson (directly and through companies) 993,590 6.8
4. Nordnet Pension 992,708 6.8
5. AltoCumulus 784,093 5.4
6. Per Arwidsson and associated persons
4
768,677 5.3
7. Arbona AB 270,053 1.9
8. Janne Pakarinen 216,806 1.5
9. Magallanes Value Investors 216,196 1.5
10. Norges Bank 157,480 1.1
Other shareholders 6,353,867 43.7
Total 14,532,434 100.0
2
Euroclear 31 December 2023.
3
Associated persons of Håkan Eriksson.
4
Of which 493,180 are owned as call options.
63
FERRONORDIC ANNUAL REPORT 2023
Sustainability The shareIntroduction
Market outlook
& operations
Corporate
governance
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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
executive 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 percent of the Company’s outstanding number of
shares, to be distributed between approx. 19 people forming the senior manage-
ment of the Company and its subsidiaries. 499,000 of the warrants were trans-
ferred to participants in January 2023. 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
approx. SEK 76,570,000. Participation in the program and subsequent subscription
requires that a participant remains an employee of the Company or its subsidiaries.
Prior programs were launched on 30 November 2020 and 12 May 2021. The 2020
program entailed an issuing of a maximum of 332,000 warrants with a subscription
price of SEK 206. The 2020 program expired out of the money with no issue of
shares in November 2023. The 2021 program entailed an issuing of a maximum of
364,500 warrants with a subscription price of SEK 344. The 2021 program is still
active but as of 31 December 2023 out of the money.
For more information on Ferronordic’s LTI programs, refer also to Note 17, on
p. 108.
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
Redemption of
shares
- - -66,728 - -5,958
2017 Conversion 3,199,101 3,199,101 - - -
2018
Redemption of
shares
- - -66,728 - -5,958
Outstanding shares
31 December 2023
14,532,434 - - -
0
100
200
300
400
500
29-1201-1202-1102-1001-0902-0803-0702-0602-0503-0402-0302-0202-01
0
20
40
60
80
100
120
140
Ferronordic & OMX 2023
Volume per day/1,000
Nasdaq OMX Nordic 120
(indexed at 1,451)
Ferronordic
(indexed at 79)
Introduction
Corporate governance
65
FERRONORDIC ANNUAL REPORT 2023
The share
Corporate
governanceSustainabilityIntroduction
Market outlook
& operations
Formal
annual report
Corporate governance
Corporate governance report
The Board
Management and auditors
Corporate governance report
Shareholders
General Meeting
The Board of Directors
CEO
Management
group
Auditors
Audit Committee
Group functions
Remuneration Committee
Nomination Committee
Business segment
USA
Business segment
Germany
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 2023 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
pp. 62–63.
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
on the record date 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, share-
holders also have the opportunity to ask questions to the Board and the manage-
ment.
Business segment
Central Asia
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Market outlook
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annual report
Annual General Meeting 2023
The Annual General Meeting took place on 11 May 2023 at Radisson Blu Hotel,
Nybrokajen 9 in Stockholm. At the meeting, 36.41 percent of the shares and votes
were represented in person or by proxy.
The Annual General Meeting made the following resolutions:
• to approve annual and consolidated accounts
• to pay a dividend of SEK 7.5 per share
• 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.
Annual General Meeting 2024
Ferronordic AB’s Annual General Meeting 2024 will take place on 16 May 2024 at
14.00 at Radisson Blu Hotel, Nybrokajen 9 in Stockholm. Further information is
available at the Company’s website www.ferronordic.com.
Nomination Committee
At the 2023 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 2023 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 Lars Corneliusson and related parties, and Lars Hagerud, representing
AltoCumulus.
The Nominations Committee for the 2024 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 Lars Corneliusson and related parties
• 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. 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.
Corporate governance
Corporate governance report
The Board
Management and auditors
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annual report
Composition and work in 2023
Since the 2023 Annual General Meeting, the Board has consisted of 6 members
without deputies, all elected at the 2023 Annual General Meeting for the period up
to the 2024 Annual General Meeting. Detailed information about the Board mem-
bers, including their shareholdings and other positions, can be found on pp. 70–71.
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 manage-
ment 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
8/8
Lars Corneliusson 2011 No No
8/8
Håkan Eriksson 2016 Yes No
8/8
Staffan Jufors 2017 Yes Yes
8/8
Aurore Belfrage 2021 Yes Yes
8/8
Niklas Florèn 2021 Yes Yes
8/8
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 2023, the Board held eight meetings. Over the year, the Board devoted particular
focus to the following:
• The Group’s earnings and financial position
• Interim reports
• The development of the CA, German and US economy and its impact on the
markets and the Group’s finances
• Corporate governance, risk management and internal control
• Strategy issues and business development, in particular the Group’s expansion
to the US
• 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 2023 Annual General Meeting, the remuneration of the Board
amounted to SEK 2.4m, 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, main-
tain ongoing contacts with the auditors, monitor the auditors’ independence and
objectivity, 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 2023, 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 2023,
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
follow-up assignment also includes following up and evaluating current remunera-
tion structures and remuneration levels in the Group.
In 2023, 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 2023, 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.
Corporate governance
Corporate governance report
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Management and auditors
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Sustainability and Ethics Committee
The Sustainability and Ethics Committee is responsible for overseeing and prepa-
ration of matters related to ESG, ethics and sustainability reporting. This committee
was organised during the autumn 2023 and held two formal meetings.
In 2023, the Sustainability and Ethics Committee consisted of the following members:
• Aurore Belfrage (Chairman)
• Annette Brodin Rampe
• Niklas Florén
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 2023 consisted of 7 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 2023, 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
• Onur Gucum, Commercial Manager
• Anton Zhelyapov, Head of Rental and Used business
Information about management, including age, relevant education and sharehold-
ings can be found on pp. 72–73. For certain matters, executive management is
supplemented by the regional managing directors and certain other Group func-
tions (Extended Management Team). The Group has established functions that
are responsible for Group-wide activities, such as financial reporting, treasury, IT,
communications, legal, HR, purchasing, logistics, real estate, etc.
Remuneration to senior executives
The 2023 Annual General Meeting approved the following guidelines for remuneration
to the Company’s senior executives:
• Remuneration to executives is based on current market terms on the markets
where Ferronordic operates. Remuneration shall also be competitive in order to
attract and retain competent executives.
• Fixed salaries are established individually based on the criteria specified above,
as well as the individual executive’s areas of responsibility and performance. For
expatriates with salaries in local currency, the fixed salaries can be adjusted to
reflect changes in foreign exchange rates.
• Executives may receive variable salaries in addition to fixed salaries. Variable
salaries are paid upon fulfilment of pre-determined and measurable performance
criteria, primarily based on the development of the Group as a whole, and/or the
part of the group’s business that the executive is responsible for. Variable salary
for the CEO as well as executives shall not exceed 100 percent of the fixed
salary.
• A share or warrant-based long-term incentive program for the Company’s and its
subsidiaries’ senior management may be introduced as per separate decision.
• Executives are entitled to customary non-monetary benefits such as company
cars and company health insurance. In addition, company housing and other
benefits can be offered on an individual basis, such as housing allowances and
school/kindergarten allowances for expatriates.
• In addition to those pension benefits that executives are entitled to according
to law, executives may be offered pension benefits that are competitive in the
country where the individual in question is or has been a resident or to which the
individual has a relevant connection. Pension plans shall be defined contribution
plans without guaranteed pension levels.
• Severance pay shall not exceed 12 months’ salary.
Remuneration to the CEO and other members of the management is described in
Note 29. The Board may deviate from these guidelines if there are special reasons
for doing so in an individual case. Remuneration already decided for the manage-
ment that has not fallen due at the 2023 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 2023 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
Ferronordic in assignments regarding tax and accounting matters. The compensation
paid to KPMG is described in Note 30.
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 standards
and other requirements for listed companies.
Corporate governance
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Management and auditors
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annual report
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 misap-
propriation of assets. Identified risks are prioritised and actions to manage and
mitigate the identified 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 reporting.
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 policies
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. Policies
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 manage-
ment group’s meetings and regional board meetings as well as within the internal
audit process. 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 2024
The Board of Directors
Corporate governance
Corporate governance report
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Management and auditors
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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.
Managing Director of CJSC Volvo Vostok
and Head of Volvo Trucks Russia.
Shares in Ferronordic 90,000 2,000 993,590 shares and 182,000 warrants
(through companies).
The Board
Corporate governance
Corporate governance report
The Board
Management and auditors
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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, and
Joheco AB.
Several board assignments (incl. My
Telescope, Bubbleroom, The Swedish Insti-
tute’s Transparency Council and Söderhub.
com) and roles as investor in start-up
companies in the technology sector.
CEO for WirelessCar.
Previous assignments
and positions
Among others Board chairman and CEO of
Kapitalkredit Sverige AB and board chair-
man 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 2,450,000 (through companies). - 50
The board, cont.
Corporate governance
Corporate governance report
The Board
Management and auditors
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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
and Deputy CEO.
Group CFO and Head of Investor
Relations.
General Counsel and Head of
Treasury and Deputy CEO.
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
Management.
LL.M. MBA (LBS) and BAs in Economics
& Management and International
Business.
M.Sc. in Law and B.Sc in Econom-
ics and Business Administration.
Previous assignment
and positions
Managing Director of CJSC Volvo
Vostok and Head of Volvo Trucks
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,
Swedbank, Ikea and Catella in
Eastern Europe.
Shares in Ferronordic 993,590 shares and 182,000 war-
rants (through companies).
3,770 shares and 90,500 warrants. 133,200 shares and 90,500
warrants.
8,000 shares and 90,500 warrants. 6,282 shares and 90,500 warrants.
Employed since 2011 2010 2013 2019 2020
Corporate governance
Corporate governance report
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Management and auditors
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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 75,000 warrants. 768 shares and 90,500 warrants.
Employed since 2012 2015
Auditor
At the AGM 2023, 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.
Corporate governance
Corporate governance report
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Management and auditors
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FERRONORDIC ANNUAL REPORT 2023
Corporate
governance
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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 2023 Unless otherwise
stated, all amounts are indicated in SEKm (SEKm). Amounts in brackets refer to
the financial year 2022, 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
certain extent, the Parent Company purchases goods from the suppliers of the
Group, that are resold to the subsidiaries. The Parent Company is also the holder
of the ”Ferronordic” trademark.
Ferronordic is a service and sales company in the areas construction equip-
ment and trucks. It is dealer for Volvo CE in all or parts of nine states in the United
States and represents Hitachi, Sandvik and Linkbelt in parts of the same area.
Ferronordic is dealer of Volvo Trucks, Renault Trucks and Sandvik mobile crushers
in Germany. It is also dealer of Volvo CE and certain other brands in Kazakhstan.
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 author-
ised 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
Directors’ report
Trucks and Renault Trucks in parts of Germany. Following the conflict in Ukraine,
the Group sold its Russian subsidiaries at the end of 2022 for a price close to the
Company’s net asset value. As a result, Ferronordic left Russia. The sale of the
Russian business did not affect the Group’s remaining operations in Kazakhstan
and Germany. In November 2023, the Group acquired Rudd Equipment Company
(“Rudd”) in the USA. Rudd is one of the largest dealers of Volvo CE in the United
States with operations in all or parts of nine states. The Company also represents
other brands, such as Hitachi, Sandvik and Link-Belt. In the 2023 results, the results
of Rudd is consolidated in the Group’s results only in December. In the Group’s
balance sheet from 31 December 2023, Rudd’s balance sheet is consolidated in full.
The consolidation of Rudd in Ferronordic’s financial statements significantly impacts
many of the Group’s operational and financial key performance indicators (KPI).
As of 2023, the Group recognises three reportable operating segments: USA,
Germany and Central Asia (CA). Kazakhstan is currently the only market in the
Central Asia segment (see also Note 6 on p. 96).
Ferronordic’s operations consist of selling new and used construction equip-
ment and trucks, spare parts and attachments. The Group also provides service of
equipment, technical support and other professional services. In the US, Ferronordic
has a fleet of construction equipment machines for rental that can be sold to cus-
tomers during the rental period. Such conversion of rental to sales is an important
sales channel in the US. The Group also offers contracting services, where the
Group owns, services and operates equipment on behalf of its customers and is paid
per cubic meter and kilometre of material transported. In 2023, the Group had no
ongoing contracting services projects. The ambition is to offer contracting services in
Kazakhstan 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.
0
500
1,000
1,500
2,000
2,500
3,000
2023202220212020
Q1
Q3
Revenue, SEK m
0
200
400
600
800
1,000
1,200
2023202220212020
New units delivered
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Ferronordic’s customers of construction equipment in the United States operate in a
number of different industries, such as general construction, infrastructure and mining.
Ferronordic’s customers of trucks in Germany include transport operators and
logistics companies of various sizes, operating in a wide range of segments including
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.
Net sales and results
In December 2023, Ferronordic’s North American business sold 47 new units,
4 used units and converted 5 units from rental.
In 2023, Ferronordic’s sales of new trucks and light commercial vehicles in
Germany decreased by 2 percent to 975 (992), while during the same period the
market¹ grew by 25 percent.
In Kazakhstan (CA segment), unit sales of new construction equipment
increased by 20 percent to 72 (60), while during the same period the market
declined by an estimated 23 percent².
Net sales
The Group’s net sales increased by 45 percent to SEK 2,863m (1,973). Truck and
machine sales increased by 50 percent while aftermarket sales (spare parts and ser-
vice) increased by 41 percent. Net sales in other income, mainly rental operations,
increased by 4 percent. In the US, net sales in December contributed SEK 308m to
the Group. In Germany, net sales increased by 28 percent to SEK 2,271m (1,770).
Net sales in Kazakhstan increased by 40 percent in SEK to SEK 284m (203).
Gross profit and operating profit
Gross profit for the year amounted to SEK 377m (250), an increase of 51 percent
and partly driven by the acquisition of Rudd in the US. The gross margin increased
from 12.7 percent to 13.2 percent. Selling and administrative expenses increased
by 46 percent but was unchanged as a share of net sales 17.7 percent. Other
costs were higher in 2023 than in 2022. Other income was higher in 2022, when
Ferronordic received a compensation payment from Volvo CE of SEK 321m and
sold its business in Russia. Partly as a result if this, operating profit decreased to
SEK -115m (233). The adjusted³ operating profit decreased from SEK -88m to
SEK -115m.
Result before income tax
Net financing costs remained unchanged at SEK -17m, as both finance income
and expenses were higher on higher interest rates and higher cash and debt posi-
tions through the year. Result before income tax decreased to SEK -153m (258).
The adjusted result before income tax in 2022 was SEK -63m.
Result for the year
Result for continuing operations for the year decreased to SEK -107m (183).
Result for the year including discontinued operations in 2022 was SEK 440m.
Earnings per share
Earnings per share before dilution amounted to SEK -7.39 (30.28). After dilution,
earnings per share were SEK -7.22 (30.28).
Cash flow and investments
Cash flow from operating activities after changes in working capital, financial
expenses and taxes decreased to SEK -27m (215). Cash flow from investing activ-
ities amounted to SEK -1,215m (521). The Group’s cash flows resulted in a net debt
position, which at the end of 2023 amounted to SEK 1,349m (net cash of 957).
Financial position
Cash and cash equivalents on 31 December 2023 amounted to SEK 426m
(1,688). Interest-bearing liabilities (including financial leasing) amounted to
SEK 1,776m (731). Tangible fixed assets increased to SEK 1,828m (560).
Equity on 31 December 2023 amounted to SEK 1,622m (1,873).
Dividend
At the 2023 Annual General Meeting, it was decided to pay a dividend of SEK 7.5 per
share. For the 2024 Annual General Meeting, the Board of Directors does not recom-
mend to pay a dividend.
-150
-100
-50
0
50
100
150
200
250
20232022
4
20212020
Results from operating activities, SEK m
1
ACEA statistics
2
Based on estimates 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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4
The adjusted operating result in 2022 was SEK -88m.
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Employees
At the end of 2023, the number of full-time equivalent employees in the Group was
827 (457), of which 399 (382) related to Germany, 355 related to USA, 54 (57) to
Central Asia and 19 (18) 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 in Note 29. The Company’s
remuneration committee handles policies and matters concerning the remuneration
of the Company’s senior executive management. 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 enable 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 2024 are the same as those that applied for 2023.
Outlook
2023 was transformative for Ferronordic. After a challenging year, we look forward
with confidence to a restart in 2024. We are optimistic about our expansion in the
USA and the opportunities there. Demand in the USA is supported by a dynamic
economy and extensive support programs for infrastructure investment. The German
economy is slowing, and the truck market is expected to decrease in 2024. We
have taken steps to adapt our organisation and cost structure to a weaker market.
We believe in continued strong demand in the aftermarket business. We are con-
fident that we will emerge stronger from current challenges and remain optimistic
about the long-term potential in Germany. Our operations in Kazakhstan continue
to develop, even if they will constitute a smaller part of the Group’s total operations
in the future.
Risks and uncertainties
Ferronordic is exposed to a number of operational and financial risks. The Group
currently operates in the United States, Germany and Kazakhstan, which means
that the Group has business in two developed markets and in one emerging
market. In developed markets, competitive, labour and regulatory pressure can be
strong. In an emerging market, the institutional and regulatory frameworks can be
unstable. The tax and judicial systems are not always transparent or consistent.
Corruption can be a problem. Access to funding can be limited, monetary policy
unpredictable and the currency unstable. Counterparty and insurance risks are
often greater and instruments to manage such risks are either less effective or
more expensive. In its position as a service and sales company, between suppliers
and customers, Ferronordic is exposed to both supply and demand disruptions and
to changes in macroeconomic activity. For more on risks and uncertainties, please
refer to pp. 77–78.
Shares and shareholders
Please see the section Shares and shareholders on pp. 62–63.
The work of the board
Please see the Corporate Governance Report on pp. 65–69.
Parent company
In 2023, the revenue of the Parent Company decreased by 57 percent to
SEK 36m (84). Sales and administrative expenses amounted to SEK 118m (-57).
The result amounted to SEK -24m (1,544).
Events subsequent to the reporting date
Other than as mentioned elsewhere in this report, there were no significant events
after the end of the reporting period.
Proposed allocation of profit
The following amount is available for SEK
allocation by the AGM 1,923,270,998
Dividend on shares 0
Amount carried forward 1,923,270,998
of which the following to the Share Premium fund 639,802,700
Total amount allocated 1,923,270,998
Sustainability report
The Group’s sustainability report can be found on pp. 43–59.
Alternative performance measurements
Definitions of alternative performance measurements are described on p. 23 of
the 2023 Year-End Report.
Formal annual report
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Notes
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Risks and uncertainties
The Ferronordic 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, procure-
ment, logistics, regulatory requirements, capacity utilisation and price risks. Operational 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.
The Group is also exposed to reputational risks and risks related to changes in the environment.
Risk management
The management of operational risks consists of a large number of daily routines
and standardised processes that are regulated in the Group’s policy documents,
for example, regarding the purchase of machines and parts, approvals of discounts
and buyback 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 operates in a cyclical
business. On the assumption that interest rates tend to be higher when economies
are strong, the Group has mostly floating interest rates. For longer-term loans, the
Group may partially use fixed interest rate instruments.
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
A smaller part of the Group’s operations is connected to Kazakhstan, where the
political conditions have historically been volatile. Political trends have sometimes
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. In 2023, part of the government was replaced. Political changes
can result in changes of government positions and relations with private business.
Changes in government policy and legislation 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 and intensified risks in the country.
In developed markets like the US and Germany, competitive and regulatory pres-
sures can be strong and impact the market environment and the Group’s profitability.
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 applica-
tion of recently adopted legislation and its impact on complex commercial agree-
ments, 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. Media also reports of instances where sanctioned goods and products
have been resold from Kazakhstan to Russia.
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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
and negative publicity. Notwithstanding such procedures, corruption and unethical
behaviour can have adverse negative effect on the Group’s operations, earnings
and financial position.
Ferronordic has extensive know-your-customer procedures. Ferronordic’s
sales contracts prohibits unethical use of the equipment and trucks and resale
to sanctioned markets. Ferronordic’s machines are also required to carry GPS
trackers. Many of Ferronordic’s machines are covered by service contracts, which
means that Ferronordic regularly maintains the machines at the sites of the cus-
tomers.
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
in minimising its ecological footprint. The Group considers that its product range
is leading in terms of safety, recycling and pollution and that stricter regulation
tends to favor the market position of the Group’s products. Accidents, waste and
discharges of pollutants can however happen. No guarantees can 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 exec-
utives. 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. For more information on
environmental risks, please refer also to the Sustainability report on p. 51.
Tax system
For information on risks associated with the US, German and Kazakh tax systems,
please see Note 10.
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 does
not hedge this indirect exposure to commodity prices.
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, unfavour-
able 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 financial 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 and residual value
The Group has continuously expanded its network and infrastructure. An un-
foreseen decline in capacity utilisation, e.g., as a result of economic downturn,
discontinuation of certain products etc., generally results in decreased sales which
in the short term cannot be offset by a corresponding cost reduction. The Group
also has a meaningful fleet of machines and trucks for rental. The utilisation of this
fleet could decline if economic activity, consumption or industrial activity declines.
By owning machines and trucks for rental or contracting services, the Group is also
exposed to residual value, referring to risk on the value of a machine or truck at
the end of rental period or use in contracting services. Such risks can be greater
in times of technological disruption, for example with the development of electric
transport with changes in battery technology.
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 and be competitive in a
low-emission economy.
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Dependence on key employees
The Group is dependent on its ability to identify, recruit and retain qualified
executives 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 impor-
tant 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 retain 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 de-
creased profitability. The Group strives to manage this price risk by, together
with its suppliers, continuously monitoring the development of price position-
ing 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
insurance 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 relevant 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.
Material disputes
No material disputes took place during the year.
Formal annual report
Directors’ report
Risks and uncertainties
Financial reports
Notes
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Auditor’s report
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SEK m Note 2023 2022
Continuing operations
Revenue 6 2,863 1,973
Cost of sales -2,486 -1,723
Gross profit 377 250
Selling expenses 7 -190 -140
General and administrative expenses 7 -319 -208
Other income 8 24 337
Other expenses 8 -8 -6
Operating profit -115 233
Finance income 9 31 2
Finance costs 9 -48 -19
Foreign exchange gains/(losses) (net) -21 42
Result before income tax -153 258
Income tax 10 46 -75
Result from continuing operations -107 183
Discontinued operations
Result from discontinued operations - 257
Result for the year -107 440
Other comprehensive result
Items that are or may be reclassified to profit or loss:
Foreign currency translation differences for foreign operations -35 322
Other comprehensive result for the year, net of tax -35 322
Total comprehensive result for the year -142 762
Earnings per share
Basic earnings per share (SEK) 31 -7.39 30.28
Diluted earnings per share (SEK) 31 -7.39 30.28
Basic earnings per share from continuing operations (SEK) 31 -7.39 12.58
Diluted earnings per share from continuing operations (SEK) 31 -7.39 12.58
Consolidated statement of comprehensive income

Formal annual report
Directors’ report
Risks and uncertainties
Financial reports
Notes
Board signatures
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SEK m Note 31 December 2023 31 December 2022
ASSETS
Non-current assets
Property, plant and equipment 11 1,828 560
Intangible assets 12 244 85
Deferred tax assets 13 127 78
Total non-current assets 2,199 724
Current assets
Inventories 14 1,443 460
Trade and other receivables 15 630 344
Prepayments 6 1
Cash and cash equivalents 16 426 1,688
Total current assets 2,506 2,493
TOTAL ASSETS 4,705 3,217
Consolidated statement of financial position

Formal annual report
Directors’ report
Risks and uncertainties
Financial reports
Notes
Board signatures
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Consolidated statement of financial position, cont.
SEK m Note 31 December 2023 31 December 2022
EQUITY AND LIABILITIES
Equity 17
Share capital 1 1
Additional paid in capital 630 630
Translation reserve -22 13
Retained earnings 1,013 1,229
TOTAL EQUITY 1,622 1,873
Non-current liabilities
Borrowings 18 671 393
Deferred income 19 14 22
Deferred tax liabilities 13 277 1
Long-term lease liabilities 18 59 43
Total non-current liabilities 1,020 459
Current liabilities
Borrowings 18 1,024 274
Trade and other payables 21 997 573
Deferred income 19 8 16
Provisions 20 12 1
Short-term lease liabilities 18 22 21
Total current liabilities 2,062 884
TOTAL LIABILITIES 3,083 1,344
TOTAL EQUITY AND LIABILITIES 4,705 3,217

Formal annual report
Directors’ report
Risks and uncertainties
Financial reports
Notes
Board signatures
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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 2023 1 630 1,229 13 1,873
Total comprehensive income for the year
Result for the year - - -107 - -107
Other comprehensive income
Foreign exchange differences - - - -35 -35
Total comprehensive income for the year - - -107 -35 -142
Contribution by and distribution to owners
Dividends 17 - - -109 - -109
Total contributions and distributions - - -109 - -109
Balance 31 December 2023 1 630 1,013 -22 1,622
Consolidated statement of changes in equity

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 - - 440 - 440
Other comprehensive income
Foreign exchange differences - - - 322 322
Total comprehensive income for the year - - 440 322 762
Contribution by and distribution to owners
Warrant issue 17 - 10 - - 10
Total contributions and distributions - 10 - - 10
Balance 31 December 2022 1 630 1,229 13 1,873
Formal annual report
Directors’ report
Risks and uncertainties
Financial reports
Notes
Board signatures
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SEK m Note 2023 2022
Cash flows from operating activities
Result before income tax from continuing operations -153 272
Result before income tax from discontinued operations - 510
Adjustments for:
Depreciation and amortisation 11, 12 109 272
(Gain)/loss from impairment of receivables 8 -1 52
Profit on disposal of property, plant and equipment - -4
Finance costs 9 48 95
Finance income 9 -31 -24
Foreign exchange losses/(gains) (net) 21 -14
Cash flows from operating activities before changes
in working capital and provisions
-7 1,158
Change in inventories -335 594
Change in trade and other receivables -50 341
Change in prepayments -4 -191
Change in trade and other payables 409 -1,470
Change in provisions 12 4
Change in deferred income -16 -10
Cash flows from operating activities before interest and tax paid 8 427
Income tax paid -6 -127
Interest paid -29 -85
Cash flows from operating activities -27 215
of which from discontinued operations - -11
Consolidated statement of cash flows

Formal annual report
Directors’ report
Risks and uncertainties
Financial reports
Notes
Board signatures
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Consolidated statement of cash flows, cont.
SEK m Note 2023 2022
Cash flows from investing activities
Proceeds from sale of property, plant and equipment - 5
Interest received 27 18
Acquisition of property, plant and equipment -149 -351
Acquisition of intangible assets - -1
Acquisition of business -1,093 0
Sale of subsidiary - 849
Cash flows from investing activities -1,215 521
of which from discontinued operations - 682
Cash flows from financing activities
Dividends -109 -
Proceeds from borrowings 467 403
Repayment of loans -362 -170
Leasing financing paid -17 -65
Cash flows from financing activities -21 168
of which from discontinued operations - 195
Net change in cash and cash equivalents -1,263 903
of which from discontinued operations - 866
Cash and cash equivalents at start of the year 1,688 768
Effect of exchange rate fluctuations on cash and cash equivalents 1 17
Cash and cash equivalents at end of the year 426 1,688

Formal annual report
Directors’ report
Risks and uncertainties
Financial reports
Notes
Board signatures
Auditor’s report
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FERRONORDIC ANNUAL REPORT 2023
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SEK m Note 2023 2022
Revenue 36 84
Cost of sales -22 -68
Gross profit 14 16
Administrative expenses -118 -57
Other income 21 330
Other costs - -28
Operating profit -82 261
Finance income 9 78 1,313
Finance costs 9 -7 -26
Foreign exchange gains/(-losses) (net) -20 58
Result before income tax -30 1,607
Income tax 10 6 -63
Result for the year -24 1,544
Parent Company income statement

Parent Company statement of comprehensive income
SEK m Note 2023 2022
Result for the year -24 1,544
Total comprehensive income for the year -24 1,544
Formal annual report
Directors’ report
Risks and uncertainties
Financial reports
Notes
Board signatures
Auditor’s report
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SEK m Note 31 December 2023 31 December 2022
ASSETS
Non-current assets
Property, plant and equipment 11 0 0
Intangible assets 12 0 0
Financial assets
Holdings in group companies 26, 28 288 35
Loans to group companies 26 66 -
Deferred tax assets 13 6 -
Total financial assets 360 35
Total non-current assets 361 36
Current assets
Trade and other receivables 15 47 77
Prepayments 0 0
Loans to group companies 1,784 490
Cash and cash equivalents 16 266 1,543
Total current assets 2,098 2,111
TOTAL ASSETS 2,458 2,146
Parent Company balance sheet

Formal annual report
Directors’ report
Risks and uncertainties
Financial reports
Notes
Board signatures
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Parent Company balance sheet, cont.
SEK m Note 31 December 2023 31 December 2022
EQUITY AND LIABILITIES
Equity 17
Restricted equity
Share capital 1 1
Unrestricted equity
Share premium reserve 640 640
Retained earnings 1,308 -128
Result for the year -24 1,544
TOTAL EQUITY 1,925 2,058
Non-current liabilities
Borrowings 18 455 -
Total non-current liabilities 455 -
Current liabilities
Trade and other payables 21 78 89
Total current liabilities 78 89
TOTAL LIABILITIES 534 89
TOTAL EQUITY AND LIABILITIES 2,458 2,146

Formal annual report
Directors’ report
Risks and uncertainties
Financial reports
Notes
Board signatures
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FERRONORDIC ANNUAL REPORT 2023
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SEK m Note Share capital
Share premium
reserve Retained earnings Total equity
Balance 1 January 2023 1 640 1,417 2,058
Total comprehensive income for the year
Result for the year - - -24 -24
Total comprehensive income for the year -24 -24
Contribution by and distribution to owners
Dividends on shares 17 - - -109 -109
Total contributions and distributions - - -109 -109
Balance 31 December 2023 1 640 1,283 1,925
Parent Company statement of changes in equity

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 and distribution to owners
Warrant issue 17 - 10 - 10
Total contributions and distributions - 10 - 10
Balance 31 December 2022 1 640 1,417 2,058
Formal annual report
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SEK m Note 2023 2022
Cash flows from operating activities
Result before income tax -30 1,607
Adjustments for:
Depreciation and amortisation 11, 12 0 0
Finance costs 9 7 26
Finance income 9 -78 -1,313
Foreign exchange losses (gains) (net) 20 -58
Cash from operating activities before changes in
working capital and provisions
-82 262
Change in trade and other receivables 29 -4
Change in trade and other payables -14 -72
Cash flows from operations before income taxes
and interest paid
-67 185
Income tax paid - -
Interest paid -3 -1
Cash flows from operating activities -70 184
Parent Company statement of cash flows

Formal annual report
Directors’ report
Risks and uncertainties
Financial reports
Notes
Board signatures
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Parent Company statement of cash flows, cont.
SEK m Note 2023 2022
Cash flows from investing activities
Interest received 29 2
Dividend from subsidiary - 107
Repayment of loans by subsidiaries 345 -
Loans to subsidiaries -1,703 -286
Contribution to subsidiaries -253 -
Sale of subsidiary - 1,097
Cash flows from investing activities -1,583 919
Cash flows from financing activities
Repayment of loans - -31
Loans from subsidiaries - 130
Loans received 469 -
Dividend -109 -
Cash flows from financing activities 360 99
Net increase/(decrease) in cash and cash equivalents -1,292 1,202
Cash and cash equivalents at start of year 1,543 241
Effect of exchange rate fluctuations on cash and cash equivalents 16 100
Cash and cash equivalents at year-end 16 266 1,543

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Directors’ report
Risks and uncertainties
Financial reports
Notes
Board signatures
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Notes
Content of notes
Note Page
1. General information 93
2. Basis of preparation 93
3. Changed accounting policies 93
4. Significant accounting policies 94
5. Determination of fair value 96
6. Segment reporting and revenue 96
7. Selling, general and administrative expenses 98
8. Other income and expenses 99
9. Finance income and finance costs 99
10. Income taxes 100
11. Property, plant and equipment 101
12. Intangible assets 104
13. Deferred tax assets and liabilities 105
14. Inventories 107
15. Trade and other receivables 107
16. Cash and cash equivalents 107
17. Capital and reserves 108
18. Borrowings 109
19. Deferred income 111
20. Provisions 111
21. Trade and other payables 112
22. Financial instruments and risk management 112
23. Leases 117
24. Capital commitments 118
25. Contingencies 118
26. Related party transactions 118
27. Events subsequent to the reporting date 119
28. Interest in Group Companies 119
29. Employees, Board and management 120
30. Auditors’ fees and expenses 122
31. Earnings per share 122
32. Acquisition of business 123
33. Sale of subsidiaries 124
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Notes
NOTE 1 General information
Ferronordic AB, reg. no. 556748-7953 (the “Parent Company”) is a Swedish public
limited liability company, having its address at Nybrogatan 6, 114 34 Stockholm.
The Parent Company together with its subsidiaries comprise the “Group” or
“Ferronordic”. The shares in Ferronordic AB (publ) are listed on Nasdaq Stockholm,
Sweden. www.ferronordic.com.
Ferronordic is a service and sales company in the areas of trucks and con-
struction equipment. It is dealer of Volvo Trucks, Renault Trucks and Sandvik mobile
crushers and screens in Germany, and dealer of Volvo Construction Equipment,
Sandvik mobile crushers and screens and Mecalac in Kazakhstan. From Novem-
ber 2023 Ferronordic is the dealer for Volvo CE in all or parts of nine states in the
United States and also represents Hitachi, Sandvik and Link-Belt in parts of the
same area. Ferronordic began its operations in 2010 and currently has 42 work-
shops and approx. 800 employees. Ferronordic’s vision is to be the leading service
and sales company in its markets.
NOTE 2 Basis of preparation
Ferronordic’s financial statements are prepared in accordance with the Interna-
tional Financial Reporting Standards (IFRS) issued by the International Financial
Standards Board (IASB) as well as the interpretations of the IFRS Interpretations
Committee, as adopted by the European Union.
RFR 1 on Supplementary Accounting Rules for Groups, issued by the Swedish
Financial Reporting Board, is applied. The annual accounts of the Parent Company
are prepared in accordance with the Swedish Annual Accounts Act and RFR 2,
Accounting for Legal Entities, issued by the Swedish Financial Reporting Board.
Basis of measurement
The financial statements of the Group are prepared on the basis of historical cost.
Functional and presentation currency
Items included in the various units of the Group are valued in each Group com-
pany’s functional currency. The functional currency for the Parent Company is the
Swedish krona (SEK). The functional currency for the Group company in Kazakh-
stan is the Kazakh tenge (KZT). The functional currency of the Group companies in
Germany is the euro (EUR). The functional currency of the Group companies in the
USA is the US dollar (USD). The Group and the Parent Company have selected
SEK as presentation currency. Except if otherwise noted, all amounts have been
rounded to the nearest thousand.
Estimates and judgments
The preparation of the Group’s financial statements in conformity with IFRS
requires management to make various estimates and assumptions that affect the
application of accounting policies and the reported amounts of assets, liabili-
ties, income, and expenses. Actual results may differ from those estimates and
assumptions.
Estimates and assumptions are reviewed on an ongoing basis. Changes in
estimations and assumptions are recognised in the period when they occur and in
future periods affected by the changes. The judgments that have the most signifi-
cant effect on the amounts recognised in the Group’s financial statements are set
out in Note 4 (useful life and the residual value of property, plant, and equipment;
recognition of deferred tax assets; obsolescence provisions in relation to invento-
ries), Note 22 (allowance for expected credit losses) and Note 25 (contingencies).
NOTE 3 Changed accounting policies
No significant changes in accounting policies occurred in 2023.
Note 2, Basis for preparation, cont.
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NOTE 4 Significant accounting policies
The material accounting policies set out below have been applied consistently by
all Group companies for all periods presented.
Business combinations
The Group accounts for business combinations using the acquisition method when
control is passed over to the Group. The consideration transferred in the acqui-
sition, as well as the identifiable net assets acquired, are measured at fair value.
Any goodwill that arises is tested annually for impairment. Transaction costs are
expensed as incurred.
A contingent consideration is measured at fair value at the date of acquisition.
Subsidiaries
Subsidiaries are entities controlled by the Group. The financial statements of the
subsidiaries are included in the consolidated financial statements from the date
when the Group obtains control over the entity until the date when the Group
ceases control over the entity.
Elimination of intra-group transactions
Intra-group balances and transactions (and unrealised income and expenses arising
from such transactions) are eliminated in the consolidated financial statements.
Unrealised losses are eliminated in the same way as unrealised gains, unless there
is a need for impairment.
Foreign currency
Foreign currency transactions
Transactions in foreign currencies are translated to the functional currency at the
exchange rate on the transaction date.
Monetary assets and liabilities in foreign currencies are translated to the func-
tional currency at the exchange rate on the reporting date.
Foreign currency gains or losses on monetary items comprise the difference
between amortised cost in the functional currency at the beginning of the period
(adjusted for effective interest and payments during the period) and the amortised
cost in the functional currency translated at the exchange rate at the end of the
reporting period.
Non-monetary items in foreign currencies that are measured on the basis
historical cost are translated to the functional currency at the exchange rate at the
date of the transaction.
Foreign currency differences are recognised in profit or loss.
Foreign operations
Assets and liabilities of foreign operations are translated to SEK at the exchange
rates on the reporting date. Income and expenses of foreign operations are trans-
lated to SEK at the exchange rate on the transaction date.
Foreign currency differences on the balance sheet are recognised in other compre-
hensive income and included in the translation reserve in equity.
If the Group’s control, significant influence, or joint control over a foreign oper-
ation is lost, the accumulated translation reserve related to that foreign operation is
reclassified to profit or loss as part of the gain or loss on disposal.
Foreign exchange gains and losses arising from receivables or payables to
a foreign operation which are not expected to be settled in the foreseeable future
form part of net investment in foreign operations and are recognised in other com-
prehensive income and presented in the translation reserve in equity.
Financial instruments
Financial instruments within Ferronordic are financial assets and financial liabilities
which are, all, except for contingent consideration, measured at amortised cost.
Except for trade receivables, which are recognised when they originate, all
financial assets and financial liabilities are recognised when Ferronordic becomes
bound by the provisions of the relevant instrument.
Trade receivables are initially recognised at the transaction price. Other
financial assets and financial liabilities are initially recognised at fair value, plus
trans action costs directly attributable to the acquisition or issue of the relevant
instrument.
Property, plant and equipment
Except for land, property, plant, and equipment is recognised at cost less accu-
mulated depreciation and impairment losses. Cost includes expenditures that are
directly attributable to the acquisition of the asset
Depreciation
The estimated useful life of certain significant items of property, plant and equipment:
• Buildings 2–45 years
• Machinery and equipment 2–16 years
• Contracting services machines 3 years
• Rental machines 3 years
• Office equipment 2–10 years
• Cars 3–7 years
• Rental trucks 5 years
Land is not depreciated.
The residual value for machines in contracting services and machines and
trucks in rental is 25 percent of the cost of the assets. For all other property, plant
and equipment, the residual value is zero.
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Intangible assets
Intangible assets acquired by the Group with finite useful lives are measured at
cost less accumulated amortisation and accumulated impairment losses.
Goodwill arising on the acquisition of subsidiaries is measured at cost less
accumulated impairment losses, if applicable.
Amortisation and impairment
Estimated useful lives of the Group’s intangible assets:
• Software and software licenses 2–5 years
Impairment test on goodwill is performed annually and when there is an indication
of impairment.
Leases
Long-term leases are reported as right-of-use assets and corresponding lease lia-
bilities on the commencement day of the lease. Payments for short-term contracts
and leases of low value are expensed on a straight-line basis in the income state-
ment.Short-term contracts are contracts with a lease term of 12 months or less.
Contracts of low value include various IT-equipment and smaller office furniture.
Inventories
Inventories are measured at the lower of cost and net realisable value. The cost
of inventories is based on the first-in first-out principle, and includes expenditure
incurred in acquiring the inventories, production or conversion costs and other
costs incurred in bringing them to their existing location and condition. Each truck
and machine in inventory has specifically identified costs.
The net realisable value is the estimated selling price in the ordinary course of
business, less the estimated costs of completion and selling expenses.
Impairment
Financial instruments
The Group uses a matrix of loss rates to measure its expected credit losses of
trade and other receivables. Loss rates are calculated as the probability of a
loss for each group of receivables, based on the period of delinquency within the
Group’s different revenue types (i.e. equipment sales, aftermarket sales, con-
tracting services, and other revenue). Loss rates are calculated as a proportion of
actual average losses to the average amount of receivables for a given revenue
type and category of ageing during the twelve months period preceding the report-
ing date (the Group considers this sufficient to determine whether a loss is likely to
happen).
Warranties
The Group provides warranties on new machines, trucks and components. The
Group’s suppliers reimburse the Group for costs incurred as a result of these
warranties at agreed rates and amounts. Both the gross provision amount for the
warranties and the related receivable from the suppliers are recorded. Provisions
for warranties are based on historical data and recognised when the relevant
products are sold.
The Group also offers extended warranties for an additional charge. When
extended warranties are sold to customers, the Group also purchases a corre-
sponding extended warranty from the relevant supplier. These are recognised as
other receivables and amortised to profit and loss evenly during the contract term.
Revenue
Ferronordic categorises revenue as trucks and equipment sales, aftermarket sales
(parts and service), contracting services, and other revenue. Revenue is recog-
nised when control has been transferred from Ferronordic to the customer. Control
refers to the customers’ ability to use machines, spare parts or services in its
operations and to obtain the associated cash flows.
Equipment sales includes sales of new and used trucks, construction equip-
ment, light commercial vehicles and attachments. Control over the equipment
typically transfers to the customer upon delivery, i.e. when the trucks or equipment
has been accepted by the customer and the equipment has been physically trans-
ferred (although in some cases Ferronordic may allow that the equipment is stored
at its premises until it can be moved to the customer). If the truck or equipment
is transferred at the customer’s premises but the customer does not accept the
equipment, no revenue is recognised and the equipment is instead considered to
be stored at the customer’s premises. The revenue for each unit of equipment sold
is specified in the relevant sales contract.
Aftermarket sales includes sales of spare parts, service (maintenance and
repairs) and other aftermarket service (e.g. extended warranties). As for parts
sales, control transfers to the customer upon delivery, i.e. when the part has been
transferred to and accepted by the customer. As for service sales, control transfers
when Ferronordic incurs the associated cost to deliver the service and the cus-
tomer can benefit from the use thereof. As most services rendered are short-term
repairs, this typically occurs when the rendered services are completed. Sales of
extended warranty contracts is recognised evenly during the contract period. The
revenue for each transaction of parts or service sales is specified in the relevant
contract or in the individual specification signed by the customer.
In contracting services control transfers to the customer when the customer
can benefit from the use of the rendered service, i.e. when the transported material
(e.g. earth or rock) has been physically delivered to and accepted by the customer.
Revenue is measured as the volume of contracted units that are delivered and
confirmed by the customer, multiplied by the price per volume of unit agreed (e.g.
cubic meter, distance moved or surface prepared).
Other revenue mainly consists of rental revenue.
Note 4, Significant accounting policies, cont.
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The Group does not have significant contract assets from contracts with customers.
Information on receivables from contracts with customers is presented in Note 15,
Trade and other receivables. Information on contract liabilities from contracts with
customers is presented in Note 21, Trade and other payables.
Disaggregation of revenue is presented in Note 6, Segment reporting and
revenue.
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 ac-
counting 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 ac-
cording 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.
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
impairment, 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.
Formal annual report
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Board signatures
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NOTE 5 Determination of fair value
To measure the fair value of an item, the Group uses market observable data as
far as possible. Fair values are categorised into different levels as follows:
• Level 1: quoted prices (unadjusted) in active markets for identical items
• Level 2: other observable inputs, either directly (i.e. prices) or indirectly
(i.e. derived from prices)
• Level 3: other inputs that are not based on observable market data (unobservable
inputs)
If the fair value measurement can be categorised at different levels, the measurement
is categorised entirely at the lowest level that is used for the measurement. Changes
in levels are recognised at the end of the period when the changes occurred.
Fair values of borrowings and finance leases are calculated based on the
present value of future cash flows from principal and interest, discounted at the
market rate of interest at the reporting date (level 2).
For leases, the market rate of interest is determined by reference to similar
lease agreements.
The Group does not disclose the fair values of short-term receivables and
payables since it reasonably can be assumed that the carrying amounts are the
same as the fair values.
NOTE 6 Segment reporting and revenue
a) Segment reporting and disaggregation of revenue:
From 2023 the Group recognises three separate reportable segments: USA,
Germany and Central Asia (CA). Operating segments are reported in a manner
consistent with the internal reporting provided to the chief operating decision-
maker (CODM). The chief operating decision-maker, who is responsible for allo-
cating resources and assessing financial performance of the operating segments,
has been identified as the Group Executive Management Team.
The segments are partly managed separately due to differences in markets,
logistics, supply chains, products, customers and marketing strategies. For each seg-
ment, the Group’s management reviews internal reports on at least a monthly basis.
In the US, trucks and equipment sales include sales of new and used construc-
tion equipment from Volvo, Hitachi, Sandvik and Link-Belt. In Germany, trucks and
equipment sales include sales of new Volvo Trucks and Renault Trucks, Sandvik’s
mobile crushers and screens, Renault light commercial vehicles and used trucks.
In Central Asia (CA), trucks and equipment sales include sales of new and used
construction equipment, Sandvik’s mobile crushers and screens, used trucks and
attachments. Aftermarket sales include sales of service and parts. Other revenue
consists mainly of rental revenue. Contracting services include only revenue from
contracting services operations. Currently, there are no contracting services oper-
ations. Information regarding the results of each segment is included in this report.
The performance of each segment is mainly evaluated based on revenue, gross
profit, EBITDA, operating profit and operating margin, as included in internal man-
agement reports that are reviewed by the Group’s Executive Management Team.
The Group had no inter-segment revenues during the periods presented.
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Unallocated Unallocated Germany Germany Group costs² Group costs² Total Total SEK m (or as stated) USA 2023 USA 202220232022 CA 2023 CA 20222023202220232022External revenue 308 - 2,271 1,770 284 203 2,863 1,973Equipment and truck sales 212 - 1,578 1,194 224 151 2,015 1,345Aftermarket sales 80 - 608 479 60 52 748 531Other revenue 15 - 85 97 - - 101 97Gross profit 82 - 253 214 43 36 377 250EBITDA 39 - 18 39 13 16 -76 -72 -7 -17Depreciation and amortization -14 - -90 -71 -4 -1 -108 -72Operating profit 25 - -72 -21 9 16 -38 316Operating profit adjusted¹ 25 - -72 -21 9 16 -38 -5Group costs - - - -11 - - -76 -72 -76 -83Operating profit adjusted² 25 - -72 -32 9 16 -76 -72 -115 -88after Group costsFinance items (net) -39 25Profit(loss) before tax -153 258Result from continuing operations -107 183
¹ In 2022, Group operating profit of SEK 316m include a compensation payment from Volvo CE of SEK 321m. In the adjusted operating profit, this extraordinary other income is removed to
facilitate comparison over periods. For more information on the compensation payment from Volvo CE, please refer to Ferronordics Q3 2022 report. The profit before tax is derived from the
operating profit before any adjustments, with consideration of Group costs and finance items.
² In prior periods, Group overhead costs have been allocated on the basis of the share of revenue and gross profit of the business segments in the Group. Starting from 2023, Ferronordic
shows the Group overheads separate, which also means that no overhead Group costs will fall directly on the business segments.
Note 6, Segment reporting and revenue, cont.
SEK m US 2023
Germany
2023 CA 2023
Group assets
2023
Intersegment
2023 Total 2023
Deferred tax assets - 120 - 6 - 127
Intersegment contributions and loans - - - 2,167 -2,167 -
Other non-current assets
3
1,360 702 9 1 - 2,072
Total assets 2,412 1,693 308 2,459 -2,167 4,705
Additions to non-current assets
3
- 175 4 - - 179
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GermanyGroup assetsIntersegmentSEK m US 20222022 CA 202220222022 Total 2022Deferred tax assets - 77 2 - - 78Intersegment contributions and loans - - - 466 -466 -3Other non-current assets- 636 10 - - 645Total assets - 1,398 248 2,036 -465 3,2173Additions to non-current assets- 219 6 - - 225
3
Except for financial instruments and deferred tax assets.
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In the US, equipment and trucks sales include sales of new and used construction
equipment and attachments. Aftermarket sales include sales of service and parts.
Contracting services include only revenue from contracting services operations.
Other revenue consists mainly of rental revenue.
In Germany, equipment and trucks sales include sales of new Volvo Trucks
and Renault Trucks, Renault light commercial vehicles and used trucks. After-
market sales include sales of service and parts. Other revenue consists mainly of
rental revenue and sales of passenger cars.
In Central Asia (CA), equipment and trucks sales include sales of new and
used construction equipment, used trucks, attachments and diesel generators.
Aftermarket sales include sales of service and parts. Contracting services include
only revenue from contracting services operations. Other revenue consists mainly
of rental revenue.
No customer represented more than 3 percent of the revenue in 2023 (3).
Note 6, Segment reporting and revenue, cont.
Revenue by country
SEK m 2023 2022
Germany 2,271 1,770
Kazakhstan 284 203
US 308 -
Total 2,863 1,973
Revenue from discontinued operations in Russia in 2022 was SEK 4,496m.
Other non-current assets by country
SEK m 2023 2022Germany 702 636Kazakhstan 9 10Sweden 0 -US 1,360 -Total 2,071 645
NOTE 7 Selling, general and administrative expenses
Selling expenses
GROUPSEK m 2023 2022Personnel expenses 178 127Depreciation 5 3Other Selling Expenses 7 10190 140
General and administrative expenses
GROUPSEK m 2023 2022Personnel expenses 190 148Depreciation and amortisation 20 12Rent 10 3Other general and administrative expenses 99 45319 208
PARENT COMPANY
SEK m 2023 2022
Personnel expenses 63 44
Depreciation and amortisation 0 0
Other general and administrative expenses 55 12
118 57
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NOTE 8 Other income and expenses
Other income
GROUPSEK m 2023 2022Other income 24 33724 337
Other income in 2022 included compensation from Volvo CE for termination of the
Group’s dealership in Russia in the amount of SEK 321m.
Other expenses
GROUPSEK m 2023 2022Impairment of trade receivables 0 1Sundry expenses 8 68 6
Other income
PARENT COMPANY
SEK m 2023 2022
Other income 21 330
21 330
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. Other income in 2023 in the
Parent company included reversals of those losses, as they have not been
incurred.
NOTE 9 Finance income and finance costs
GROUPSEK m 2023 2022Interest income on bank deposits 31 2Finance income 31 2Interest expense on lease obligations -2 -2Interest expense on bank loans -46 -12Other finance costs 0 -5Finance costs -48 -19Net finance income/(costs) -17 -17
No interest income or interest expenses relate to financial instruments measured
at fair value through profit or loss.
PARENT COMPANY
SEK m 2023 2022
Interest income on loans to subsidiary 50 11
Dividends from subsidiary - 107
Result from sale of subsidiary - 1,193
Interest income on bank deposits 29 2
Finance income 78 1,313
Interest cost on loans from subsidiary - -25
Other finance costs -7 -1
Finance costs -7 -26
Net finance income 72 1,287
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NOTE 10 Income taxes
The Parent Company is a tax resident of Sweden where the applicable tax rate for
2023 was 20.6 percent (20.6).
The other Group companies that were operational in the presented periods
are tax residents of USA, Germany and Kazakhstan. In Germany and Kazakhstan
the applicable tax rates for 2023 were 30 percent and 20 percent respectively
(same as in 2022). In the US, the applicable tax rate 2023 was 25 percent.
Income tax is calculated separately for each Group entity by multiplying the appli-
cable tax rate with the taxable results for the period. The average tax rate of the
Group in 2023 was 30.0 percent (27.6).
SEK m Group 2023 Group 2022 Parent Company 2023 Parent Company 2022Current tax expense -11 -85 - -43Deferred tax benefit /(expense) 57 10 6 -20Total income tax benefit 46 -75 6 -63
Reconciliation of effective tax rate:
GROUP SEK m 2023 % 2022 %Result for the year -107 197 Total income tax 46 -75 Result before tax -153 100 272 100Income tax at applicable tax rate 44 -29.0 -48 -17.5Other items 2 -1.0 -28 -10.146 -30.0 -75 -27.6
In 2022 the Group recognised as an income tax expense and tax liability a possible payment of tax on goodwill recognised in acquisitions in Germany in 2020–2021 in
the amount of SEK 20m. In the tax reconciliation it is included in other items.
PARENT COMPANY
SEK m 2023 % 2022 %
Result for the year -24 1,544
Total income tax 6 -63
Result before tax -30 1,607 100
Income tax at applicable tax rate 6 -20.6 -331 -20.6
Dividend from subsidiary (non-taxable) - - 22 1.4
Result from sale of subsidiary - - 246 15.4
Other items 0 0.2 0 -0.1
6 -20.4 -63 -3.9
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NOTE 11 Property, plant and equipment
GROUP Machinery Contracting Rights of use and services Rental O󰀩ce Under con-related to SEK m Land Buildingsequipmentmachinesmachinesequipment Carsstructionfacilities rent TotalCostBalance 1 January 2023 57 157 33 - 356 7 52 1 78 740Additions 1 - 2 - 144 - 2 5 26 180Acquisition of business 93 117 5 - 985 3 100 - 22 1,326Transfers to inventory - - - - -78 - - - - -78Translation difference -4 -5 0 - -40 0 -5 0 -2 -56Balance 31 December 2023 147 268 40 - 1,367 9 150 5 124 2,111Depreciation and impairment lossesBalance 1 January 2023 - 6 11 - 102 2 28 - 31 180Depreciation - 2 4 - 75 - 9 - 18 108Translation difference - 0 0 - -3 0 -1 - -1 -5Balance 31 December 2023 - 8 15 - 174 2 36 - 48 283Carrying amounts1 January 2023 57 151 22 - 254 5 23 1 47 56031 December 2023 147 261 25 - 1,194 7 113 5 76 1,828
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Machinery Contracting Right of use and services Rental O󰀩ce Under con-assets related to SEK m Land Buildingsequipmentmachinesmachinesequipment Carsstructionfacilities rent TotalCostBalance 1 January 2022 54 148 91 527 280 17 182 4 200 1,504Additions 11 68 3 - 103 2 22 - 16 224Disposals - -2 -3 - - -2 - - -24 -31Transfers to inventory - - - -66 -39 - - - - -105Transfers - 5 -2 - - - 8 -3 -8 -Disposed of in a sale -15 -87 -72 -571 -24 -14 -198 - -140 -1,122of subsidiaryTranslation difference 7 25 16 109 37 3 38 - 35 270Balance 31 December 2022 57 157 33 - 356 7 52 1 78 740Depreciation and impairment lossesBalance 1 January 2022 8 35 50 152 71 11 82 - 88 498Depreciation - 15 2 133 55 - 24 - 40 270Disposals - - - - - - - - -24 -24Transfers to inventory - - - -45 -27 - - - - -72Transfers - - - - - - 5 - -5 -Disposed of in a sale -9 -52 -51 -274 -19 -12 -100 - -85 -603of subsidiaryTranslation difference 2 7 10 34 22 2 17 - 17 111Balance 31 December 2022 - 6 11 - 102 2 28 - 31 180Carrying amounts1 January 2022 46 113 41 375 209 6 101 4 112 1,00631 December 2022 57 151 22 - 254 5 23 1 47 560
Depreciation was allocated as follows:
• Cost of sales: SEK 84m (59)
• Selling expenses: SEK 5m (3)
• General and administrative expenses: SEK 20m (12)
• Discontinued operations: SEK - (196)
Note 11, Property, plant and equipment, cont.
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Right of use assets:
Machines and Contracting services Right of use assets SEK mtrucks in rentalmachines Carsrelated to facilities rent TotalCostBalance 1 January 2023 - - 25 78 104Additions - - - 26 26Acquisition of business - - - 22 22Translation difference - - 0 -2 -2Balance 31 December 2023 - - 25 124 150Depreciation and impairment lossesBalance 1 January 2023 - - 10 31 41Depreciation - - 6 18 24Translation difference - - 0 -1 -1Balance at 31 December 2023 - - 16 48 64Carrying amounts1 January 2023 - - 16 47 6331 December 2023 - - 10 76 86
Machines and Contracting services Right of use assets SEK mtrucks in rentalmachines Carsrelated to facilities rent TotalCostBalance 1 January 2022 - 39 68 200 307Additions - - 17 15 32Disposals - - - -24 -24Buyout from lease - -46 -44 - -90Reclassification - - 8 -8 -Disposed of in a sale of subsidiary - - -36 -137 -173Translation difference - 7 14 32 53Balance 31 December 2022 - - 25 78 104Depreciation and impairment lossesBalance 1 January 2022 - 26 23 88 138Depreciation - 8 15 40 63Disposal - - - -24 -24Buyout from lease - -38 -27 - -66Reclassification - - 5 -5 -Disposed of in a sale of subsidiary - - -11 -83 -95Translation difference - 5 5 15 25Balance at 31 December 2022 - 0 10 31 41Carrying amounts1 January 2022 - 13 44 112 16931 December 2022 - - 16 47 63
Note 11, Property, plant and equipment, cont.
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PARENT COMPANY
SEK m Office equipment Company cars
Cost
Balance at 1 January 2023 0 -
Additions 0 0
Balance at 31 December 2023 0 0
Depreciation
Balance at 1 January 2023 0 -
Depreciation - 0
Balance at 31 December 2023 0 0
Carrying amounts
Balance at 31 December 2023 - 0
SEK m Office equipment Company cars
Cost
Balance at 1 January 2022 0 -
Balance at 31 December 2022 0 -
Depreciation
Balance at 1 January 2022 0 -
Depreciation 0 -
Balance at 31 December 2022 0 -
Carrying amounts
Balance at 31 December 2022 0 -
NOTE 12 Intangible assets
GROUPOther SEK m Goodwillintangible assets TotalCostBalance at 1 January 2023 84 3 87Acquisition of business 150 16 166Disposals - -1 -1Translation differences -5 -1 -6Balance at 31 December 2023 228 17 246AmortisationBalance at 1 January 2023 - 1 1Amortisation - 0 0Translation differences - 0 0Balance at 31 December 2023 - 2 2Carrying amounts31 December 2023 228 16 244
Note 11, Property, plant and equipment, cont.
Other SEK m Goodwillintangible assets TotalCostBalance at 1 January 2022 77 9 87Acquisitions – separately acquired - 1 1Disposals - -4 -4Disposed of in a sale of subsidiary - -5 -5Translation differences 7 1 8Balance at 31 December 2022 84 3 87AmortisationBalance at 1 January 2022 - 6 6Amortisation - 2 2Disposals - -3 -3Disposed of in a sale of subsidiary - -3 -3Translation differences - 0 0 Balance at 31 December 2022 - 1 1Carrying amounts31 December 2022 84 2 85
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SEK m Software and software licenses
Cost
Balance at 1 January 2022 1
Balance at 31 December 2022 1
Amortisation
Balance at 1 January 2022 0
Amortisation 0
Balance at 31 December 2022 1
Carrying amounts
Balance at 31 December 2022 0
Note 12, Intangible assets, cont.
NOTE 13 Deferred tax assets and liabilities
(a) Deferred tax assets and tax liabilities:
GROUP31 December 202331 December 2022SEK m Assets Liabilities Net Assets Liabilities NetProperty, plant and equipment - - - - -1 -1Intangible assets - -277 -277 - - -Tax loss carry-forwards 127 - 127 78 0 78Net tax assets/(liabilities) 127 -277 -150 78 -1 77Set off tax - - - - - -Net tax assets/(liabilities) 127 -277 -150 78 -1 77
PARENT COMPANY
SEK m Software and software licenses
Cost
Balance at 1 January 2023 1
Balance at 31 December 2023 1
Amortisation
Balance at 1 January 2023 1
Amortisation 1
Balance at 31 December 2023 0
Carrying amounts
Balance at 31 December 2023 0
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Other intangible assets consist of tradename in the US segment, acquired in the
purchase of the business in the US. Other intangible assets also include software
licences in other segments.
Amortisation of SEK 0m (0) was recognised as general and administrative
expenses and SEK -m (2) in discontinued operations.
The carrying amount of goodwill related to acquisitions in Germany was
SEK 84m (84). The carrying amount of goodwill related to acquisition of Rudd in
the US was SEK 144m. At the end of 2023, Ferronordic conducted impairment
tests on the Group companies. The tests were based on value in use which was
calculated based on 2023-2028 discounted cash flow (DCF), sensitivity and sce-
nario analysis models. For the impairment tests, Ferronordic models its business
by segment. Ferronordic applies different discount rates across the Group. In
Sweden, Germany and the United States, Ferronordic applies a cost of capital
(before tax) of 11 percent (11). Cash flow forecasts were based on a growth rate
of 2 percent of EBITDA in the sixth year and after. The forecasts for EBITDA were
made considering past experience and market outlook. Sales volume forecasts
were estimated based on past experience and market outlook. We have consid-
ered publicly available industry data and our initiatives to consolidate our market
position and increase aftermarket sales.
Based on Ferronordic’s base case assumptions and these impairment tests,
the Group concluded not to impair any goodwill in 2023 (same as in 2022).
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PARENT COMPANY
31 December 2023
31 December 2022
SEK m Assets Liabilities Net Assets Liabilities Net
Tax loss carryforwards 6 - 6 - - -
Note 13, Deferred tax assets and liabilities, cont.
Effect of Recognised in Disposed of in movement in SEK m 1 January 2022profit or losssale of subsidiaryexchange rates 31 December 2022Property, plant and equipment -7 -1 7 -1 -1Intangible assets - - - - -Inventories 11 -2 -11 2 -Trade and other receivables -4 26 -23 - -Prepayments 3 -3 -1 1 -Trade and other payables 14 -5 -12 3 -Provisions 8 2 -11 2 -Deferred income 4 -2 -2 1 -Tax loss carry-forwards 69 27 -22 4 7898 43 -75 11 77
PARENT COMPANY
SEK m
1 January
2023
Recognised in
profit and loss
31 December
2023
Tax loss carry-forwards - 6 6
Net tax assets/(liabilities) - 6 6
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SEK m
1 January
2022
Recognised in
profit and loss
31 December
2022
Tax loss carry-forwards 20 -20 -
Net tax assets/(liabilities) 20 -20 -
b) Changes in deferred tax:
GROUPAcquired through Effect of business Recognised in movments in SEK m 1 January 2023combinationprofit and lossexchange rates 31 December 2023Property, plant and equipment -1 - 1 - -Intangible assets - -290 - 13 -277Tax loss carry-forwards 78 - 56 -7 12777 -290 57 5 -150
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NOTE 14 Inventories
Group Group Parent Company Parent Company SEK m31 December 202331 December 202231 December 202331 December 2022Raw materials and consumables 0 1 - -Work in progress 21 - - -Goods for resale 1,422 459 - -1,443 460 - -
Inventories of SEK 2,186m (1,526) were sold during the year and recognised as cost of sales. Write-down of inventories to net realisable value of SEK 0m (0) was recog-
nised as cost of sales.
NOTE 15 Trade and other receivables
Group Group Parent Company Parent Company SEK m31 December 202331 December 202231 December 202331 December 2022Trade receivables 482 312 - -Trade receivables due from subsidiaries - - 46 61VAT receivable 11 5 0 1Warranty claims 8 1 - -Prepaid income tax 0 0 - -Other receivables 129 26 - 15630 344 47 77
Credit risks, currency risks and losses related to trade and other receivables are presented in Note 22, Financial instruments and risk management.
NOTE 16 Cash and cash equivalents
Group Group Parent Company Parent Company SEK m31 December 202331 December 202231 December 202331 December 2022Bank balances 411 1,680 266 1,543Call deposits 15 8 - -Cash and cash equivalents 426 1,688 266 1,543
Interest risk, currency risk and a sensitivity analysis for financial assets and liabilities are presented in Note 22, Financial instruments and risk management.
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NOTE 17 Capital and reserves
a) Share capital and additional paid-in capitalSharesNumber of shares 2023 2022In issue 1 January 14,532,434 14,532,434In issue 31 December, fully paid 14,532,434 14,532,434Par value per share, SEK 0.089 0.089
Each share carries one vote.
b) Translation reserve
The translation reserve comprises foreign currency differences arising out of the
translation of financial information of foreign operations from functional currency
to presentation currency.
c) Dividends
At the general meeting on 11 May 2023, it was decided to pay dividends on
shares in an amount of 7.5 SEK per share, in total SEK 109m. SEK m 2023 2022Dividends paid on shares 109 -
Proposed allocation of profit
SEK 1,923,270,998 is available for distribution by the AGM. The Board proposes
that this amount be allocated as follows:
SEKDividend on shares -Amount carried forward 1,923,270,998 of which to the share 639,802,700premium reserveTotal amount allocated 1,923,270,998
The Board has recommended that the AGM 2024 decides not to pay a dividend.
d) Share based incentive program
2022 long-term incentive program
At Ferronordic’s extraordinary general meeting on December 15, 2022, the
shareholders decided to approve an incentive program for members of the Group’s
management and extended management teams. 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 involves the issue of a maxi-
mum of 1,178,000 warrants, or 7.5 percent of the Company’s outstanding number
of shares, distributed among 19 people, who make up the top management of the
Company and its subsidiaries. Each warrant entitles the participant to subscribe for
a share in the Company no earlier than three years after the issue of the warrant.
The warrants vests proportionally over 3 years. The company reserves the right to
take back unvested warrants. The warrants are acquired at fair value as assessed
by an external and independent financial advisor and based on the Black-Scholes
option pricing model. Subscription of shares would be executed by cash payment
to the Company with an exercise price corresponding to SEK 65. The costs were
covered by the Company through a bonus payment which, after tax deductions,
was used to acquire the warrants. Some of the participants received the bonus
payment and acquired their warrants in 2023. In the event of full allocation and
subsequent subscription of warrants, the Company’s equity would increase by
approx. SEK 76,570,000.
Background and previous incentive programs
In 2020, the Board proposed to introduce a long-term incentive program for
Ferronordic’s management and certain other senior executives. The program was
designed to run over a three-year horizon and to be repeated three years in three
installments, where each year’s program would require separate approval by the
annual general meeting. The maximum potential dilution for the Company’s share-
holders throughout the program would be approx. 2.5 percent per annum and no
more than 7.5 percent in total. Each warrant would give the participant the right to
subscribe for a share in the Company no earlier than three years after the issue of
the warrant. According to the program, the participants would receive a cash com-
pensation from the group which, after tax, would cover 80 percent of the cost of
acquiring the warrants under the program. The remaining 20 percent of the cost to
acquire the warrants would be borne by the participants themselves. The warrants
would be acquired at fair value as assessed by an external and independent finan-
cial advisor and based on the Black-Scholes option pricing model. Subscription of
shares would take place against cash payment to the Company at the redemption
price. Participation in the program and subsequent subscription of shares requires
that a participant remains employed by the Company or its subsidiaries. Should a
participant terminate their employment before the end of the program, the Company
reserves the right to buy back 20 percent of the participant’s warrants at original cost.
The extraordinary general meeting on 5 November 2020 approved the first
round of the long-term incentive program. On 30 November 2020, the Company
issued 332,000 warrants with a subscription price of SEK 206 to 24 management
participants. In case of full participation in the program and subsequent subscrip-
tion, the Company’s equity would increase by approx. SEK 71m.
The annual general meeting on 12 May 2021 approved the second round
of the long-term incentive program. On 28 May 2021, the Company issued
364,500 warrants with a subscription price of SEK 344 to 27 management
participants. In case of full program retention and subsequent subscription, the
Company’s equity would increase by approx. SEK 130m.
The 2022 program can be viewed as a continuation of the incentive program
launched in 2020. The warrants from the first round in 2020 expired without value
in 2023. The warrants from the second round in 2021 remain active, but as a result
of the share price performance in 2022, they have lost most of their value and
effectiveness as a motivational instrument.
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NOTE 18 Borrowings
a) Borrowings and lease liabilities
GROUP
SEK m 2023 2022Non-current liabilitiesSecured bank loans 644 355Other loans 27 38Lease liabilities 59 43 730 436Current liabilities Secured bank loans 1,024 196Other loans - 78Lease liabilities 22 21 1,046 295
The terms and conditions of outstanding loans are set out in the table below
PARENT COMPANY
SEK m 2023 2022
Non-current liabilities
Secured bank loans from Nordea 455 -
455 -
GROUP
SEK m Currency Nominal interest rate Year of maturity 31 December 2023 31 December 2022Secured bank loan (VFS) EUR EURIBOR+3.9% 2024–2025 628 218Secured bank loan (Nordea) USD SOFR+3.3% 2025–2026 455 -Secured bank loan (VFS) USD FRB SOFR+1.75% 2024 169 -Secured bank loan (JP Morgan Chase) USD CME SOFR+1.1% 2024 331 -Secured bank loan (Nordea) EUR EURIBOR+3.3% 2024 84 333Other loans EUR 3.3%–6.5% 2024–2025 27 116Lease liabilities EUR, USD 2.7%–7.7% 2024–2033 81 64Total interest-bearing liabilities 1,776 731
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b) Reconciliation of movements of liabilities to cash flows from financing activities
GROUPLiabilitiesLease SEK mliabilities Borrowings TotalBalance as at 1 January 2023 64 667 731Changes in cash flows from financing activitiesProceeds from borrowings - 467 467Repayment of loans - -362 -362Repayment of lease liabilities -17 - -17Total -17 105 88Other changes equity-related:Translation difference - 23 23Total - 23 23Other changes related to liabilitiesNew leases 18 - 18Reclassification from payables - 427 427Buyback liabilities - 0 0Acquisition of business 15 472 488Total 34 899 933Balance as at 31 December 2023 81 1,695 1,776
GROUPLiabilitiesLease SEK mliabilities Borrowings TotalBalance as at 1 January 2022 159 808 966Changes in cash flows from financing activitiesProceeds from borrowings - 403 403Repayment of loans - -170 -170Repayment of lease liabilities -65 - -65Total -65 233 168Other changes equity-related: Translation difference 22 56 78Total 22 56 78Other changes liability-related: New leases 32 - 32Reclassification from payables - 65 65Buyback liabilities - 27 27Sale of subsidiary -84 -521 -605Total -53 -429 -481Balance as at 31 December 2022 64 667 731
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NOTE 19 Deferred income
GroupGroupParent CompanyParent CompanySEK m31 December 202331 December 202231 December 202331 December 2022Deferred income short-term due to 8 16 - -buy back transactionsTotal 8 16 - -
GroupGroupParent CompanyParent CompanySEK m31 December 202331 December 202231 December 202331 December 2022Deferred income long-term due to buy back transactions 14 22 - -Total 14 22 - -
NOTE 20 Provisions
GROUP
SEK m Warranties Other TotalBalance 1 January 2023 1 - 1Provisions made - 11 11Provisions used -1 - -1Translation difference 0 0 1Balance 31 December 2023 0 12 12Non-current provisions - - -Current provisions 0 12 12 0 12 12
GROUP
SEK m Warranties Other TotalBalance at 1 January 2022 27 12 39Provisions made 27 10 37Provisions used -26 - -26Disposed of in a sale of subsidiary -32 -25 -57Translation difference 5 3 8Balance at 31 December 2022 1 - 1Non-current provisions - - -Current provisions 1 - 1 1 - 1
Other provision of SEK 12m is a provision for restructuring in Germany.
Warranties on new machines and components
The Group’s suppliers provide warranties on new machines and new components,
which the Group extends to its customers. The suppliers also offer extended
warranties for an additional charge, which the Group offers its customers, also for
an additional charge. The suppliers compensate the Group for costs related to the
warranties at pre-agreed rates and amounts.
Both the gross provision amount of the standard warranties and the receivables
from the suppliers are recognised. Provisions for standard warranties are recog-
nised when the products that the warranties relate to are being sold. Warranty
provisions are based on historical data. Amounts of expected reimbursement as of
31 December 2023 and 31 December 2022 respectively, are disclosed in Note 15,
Trade and other receivables.
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NOTE 21 Trade and other payables
GroupGroupParent CompanyParent CompanySEK m31 December 202331 December 202231 December 202331 December 2022Trade payables 791 451 10 0Advances from customers 4 29 - -Other payables and accrued expenses 155 43 24 42Income tax payable 43 41 42 42Other taxes payable 3 8 2 4997 573 78 89
The Parent Company’s trade payables related to machines from Mecalac, and machines and spare parts from Sandvik purchased by the Parent Company and resold to
its subsidiaries.
Currency and liquidity risks related to trade and other payables are disclosed in Note 22, Financial instruments and risk management.
NOTE 22 Financial instruments and risk management
The Group is exposed to various types of credit risk, liquidity risk and market risk.
The Group has established policies and procedures to identify, analyse and mini-
mise these risks, as well as to establish appropriate limits and control mechanisms
to monitor that these are adhered to. Employees are trained to understand the
risks at hand and the requirements of applicable policies and procedures. Policies
and procedures are reviewed regularly and amended to reflect changed market
conditions or changes in the business.
The purpose of the Group’s policies and procedures is to develop a control
environment where employees understand their roles and obligations. The Board
also oversees how management monitors compliance with the Group’s policies
and procedures and reviews the adequacy of the risk management framework in
relation to relevant risks.
The Group’s internal auditor evaluates the Group’s risks, monitors that estab-
lished policies and procedures are complied with and suggests how the Group’s
control environment can be improved. The internal auditor reports to the Board’s
audit committee.
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In the table below carrying amounts and fair values of financial assets and liabilities are set out.
SEK m20232022Financial assets at amortised costNote Carrying amount Fair value Carrying amount Fair valueTrade and other receivables 15 630 630 344 344Cash and cash equivalents 16 426 426 1,688 1,688 1,057 1,057 2,032 2,032
Financial liabilities at amortised costSecured bank loans 18 1,667 1,667 551 551Other loans 18 27 27 116 116Trade and other payables 21 997 997 573 573Deferred income 19 22 22 38 382,713 2,713 1,278 1,278
Carrying values and fair values
The carrying amounts of the Group’s financial assets and liabilities as of 31 De-
cember 2023 approximate their fair values. as for variable rate instruments interest
rate of the borrowings approximate market rate, for fixed rate instruments the
difference between carrying amounts and fair values is not significant.
Credit risk
General
The Group to a certain extent sells products and services on credit and is thus ex-
posed to certain credit risk. The risk is influenced mainly by the characteristics of
the individual customers, but management also considers the demographics of the
Group’s customer base as a whole, such as general default risk in the customers’
different industries.
At the end of 2023, the 20 largest trade receivables comprised 31 percent of
the total trade receivables (at the end of 2022, the corresponding figure was 20 pe r -
cent).
To minimise credit risk, the Group first and foremost strives to sell as much
as possible without credit. For machine and trucks sales, customers are usually
financed by leasing companies that purchase the machines from the Group in
cash. For aftermarket sales, the Group typically require payments in advance.
However, there are cases where the Group itself offers credit to its customers,
both for machine sales and sales of parts and services.
For machines in Kazakhstan, the Group can provide credit up to 12 months, but
typically with a relatively large down-payment and always with retention right or
pledge to the sold machines (in some cases, additional collateral can be requested,
usually in the form of sureties from the customers’ owners). To meet the custom-
ers’ financing needs, the Group may also offer short-term rental agreements, also
up to 12 months, where the Group retains ownership in the machine. Often the
customer then purchases the machine from the Group at the expiry of the rental
agreement.
For sales of spare parts and service, the Group typically does not require any
collateral, but in some cases, personal sureties are requested.
Credit approvals
The Group has a structured process for approving credits and settling credit limits
where all customers are screened and assessed individually by both the finance
and the security department before any credit is approved.
The credit review typically includes external ratings (when available) and the
use of credit databases. New credit and/or new limits are then referred to the re-
gional management and/or to the Group’s credit committee for approval, depend-
ing on the size of the credit and the recommendation of the finance and security
departments.
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i) Exposure to credit risk
The carrying amount of financial assets represent the maximum credit exposure.
Cash and cash equivalents are held with banks, which are rated AA-, A- (S&P) in
Sweden, Germany and Austria, B (Fitch) in Kazakhstan and non-rated in Russia
(the Russian business was divested at the end of 2022). Expected credit losses on
cash and cash equivalents were on 31 December 2023 (same for 2022) considered
not material and were thus not accounted for.
The credit risk in the periods presented by geographical region is:
-
2023 2022 SEK mCarrying amount Carrying amountUS 353 Germany 93 277 Kazakhstan 37 36 482 312
ii) Impairment of receivables
Ageing of trade receivables
GROUP31 december 2023Gross SEK mamount Average loss rate, % ImpairmentNot past due 313 0.0 -Past due 0–30 days 95 0.0 -Past due 31–120 days 60 1.7 -1Overdue above 120 days 48 69.3 -33 516 -34
31 december 2022Gross SEK mamount Average loss rate, % ImpairmentNot past due 228 0.9 -2Past due 0–30 days 34 0.0 -Past due 31–120 days 41 0.0 -Overdue above 120 days 15 20.0 -3318 -5
Movement in expected credit losses in respect of trade receivables
GROUPSEK m 2023 2022Balance 1 January -5 -22Net change during the year 1 -52Acquisition of business -22 -Disposed in a sale of subsidiary - 78Translation differences -8 -9Balance 31 December -34 -5
The parent company has significant loans to its subsidiaries. The parent company
reviews these loans continuously, using the same models as those applied for the
impairment tests in the Group. Given the outlook for the subsidiary companies,
the parent company does not currently expect any credit losses on its loans to its
subsidiaries.
Liquidity risk
The Group strives to maintain sufficient cash and cash equivalents to meet its
operational needs and financial commitments.
The Group’s treasury department monitors liquidity risk continuously and con-
trols that financial liabilities are discharged on time, using a payment calendar tool.
The treasury department performs annual, monthly and daily planning to control
cash flows.
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Maturities of financial liabilities (including estimated interest payments)
GROUP
31 december 2023Contractual 0–6 6–12 1–2 2–3 3–4 4–5 Over 5 SEK m Carrying amountcash flowsmonthsmonthsyearsyearsyearsyearsyearsLease liabilities 81 89 15 15 25 17 6 6 5Borrowings 1,695 1,846 948 136 325 437 - - -Trade and other payables 909 909 909 - - - - - -2,685 2,843 1,872 151 350 453 6 6 5
31 december 2022Contractual 0–6 6–12 1–2 2–3 3–4 4–5 Over 5 SEK m Carrying amountcash flowsmonthsmonthsyearsyearsyearsyearsyearsLease liabilities 64 65 11 11 20 15 7 1 -Borrowings 667 692 145 143 388 15 - - -Trade and other payables 531 531 531 - - - - - -1,263 1,288 688 154 408 30 7 1 -
The cash flows presented are not expected to occur significantly earlier or in amounts that differ significantly.
The amount of cash and cash equivalents is disclosed in the credit risk section of this note and current available credit lines are disclosed in Note 18, Borrowings.
Currency risk
Most of the Group’s sales and purchases are made in USD, EUR and KZT. The
Group is also exposed to risks on purchases and borrowings, primarily in USD and
EUR. Transactions recorded in these currencies are then translated to the SEK
reporting currency of the Group.
Interest on borrowings is denominated in the same currency as the borrowings. In
respect of other financial assets and liabilities denominated in foreign currencies,
the policy is to minimize net exposure and to keep residual net exposure at an ac-
ceptable level by buying or selling foreign currencies at spot rates when necessary
to address short-term imbalances.
Exposure to currency risk related to change of rates of SEK to USD, SEK to EUR and KZT to USD
GROUP
SEK m SEK/USD 2023 SEK/USD 2022 SEK/EUR 2023 SEK/EUR 2022 KZT/USD 2023 KZT/USD 2022Cash and cash equivalents 25 0 222 1,306 0 20Bank loans -455 0 -84 -335 0 0Intercompany loans 1,066 0 1,053 846 -60 0Trade and other payables 0 0 0 0 -183 -131Net exposure 635 0 1,192 1,817 -243 -111
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Sensitivity analysis
The Group is mainly exposed to movements in the following pairs of currencies
SEK/EUR, SEK/USD and SEK/KZT.
A strengthening (weakening) of the SEK to EUR, SEK to USD and KZT to
USD by 20 percent would at 31 December 2023 have decreased (increased) profit
or loss before taxes by the amounts shown below.
The analysis assumes that other variables, in particular interest rates, remain
unchanged. The analysis was performed on the same basis as for 2022.
A strengthening (weakening) of these currencies would have no significant
effect on the translation difference in as of the end of 2023 (the same for 2022).
31 December 2023SEK m Strengthening WeakeningSEK/USD (20%) -127 127SEK/EUR (20%) -238 238KZT/USD (20%) 49 -49
31 December 2022SEK m Strengthening WeakeningSEK/USD (20%) - -SEK/EUR (20%) -363 363KZT/USD (20%) 22 -22
Interest rate risk
The Group seeks to borrow funds at a mix of fixed and variable interest rates and is
therefore normally exposed to interest rate risk during the term of its credit facilities.
Profile of interest-bearing financial instruments at the reporting date:
The Group has mainly floating rate borrowings, where rates are calculated on the
basis of the variable central bank key rate in the country of borrowing. These instru-
ments are included in the table below.
GROUP
SEK m 2023 2022Variable rate instruments Loans and borrowings -1,667 -461 -1,667 -461
GROUP
SEK m 2023 2022Fixed rate instruments Bank deposits 15 8Loans and borrowings -27 -207Lease liabilities -81 -64 -93 -263
Sensitivity analysis
An increase (decrease) of interest rate by 200 bp or 2 percent will increase (de-
crease) finance expenses in the Group’s profit or loss by SEK 33m (9).
Fair value sensitivity analysis for fixed rate instruments
The Group does not account for any fixed rate financial instruments at fair value
through profit or loss. A change in interest rates at the reporting date would there-
fore not affect profit and loss or equity.
Applied exchange rates
Reporting Reporting Average rate date spot Average rate date spot In SEK2023rate 20232022rate 2022EUR 11.48 11.10 10.93 11.13KZT 2.33 2.21 2.08 2.29(per 100)USD 10.61 10.04 10.12 10.44
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The Group has no formal policy for capital management but seeks to maintain
a sufficient capital base for meeting its operational and strategic needs, and to
maintain the confidence of market participants. This is achieved by efficient cash
management, constant monitoring of the Group’s revenues and profit, and a long-
term investment plan, mainly financed by the Group’s operating cash flows. The
Group is in the process of resetting its financial objectives. These have previously
included a limit for debt in relation to EBITDA.
Capital management
Debt to capital ratio
GROUP
SEK m 2023 2022Total liabilities 3,083 1,344Cash and cash equivalents -426 -1,688Net Debt 2,656 -345Total equity 1,622 1,873Debt to capital ratio 1.64 -0.18
NOTE 23 Leases
a) Leases as lessee
The following information is related to lease agreements for the Group where the
Group is the lessee. The Group rents premises and facilities used for workshops,
warehouses and offices. Right-of-use assets under IFRS 16 related to these rental
contracts are presented in Note 11, Property, plant and equipment. Interest ex-
penses on lease liabilities are disclosed in Note 9, Financial expenses. The future
minimum lease payments are disclosed in Note 18, Borrowings.
The table below summarises expenses relating to short-term leases and expenses
relating to variable lease payments not included in the measurement of lease
liabilities.
GROUPSEK m 2023 2022Short-term lease of premises 10 4and facilitiesVariable lease payments 28 1438 18
The Group had no significant expenses relating to the lease of low value assets.
Cash outflow for leases during 2023 amounted to SEK 57m (85), including
short-term leases and expenses relating to variable lease payments. The amount
for 2022 was recalculated correspondingly.
b) Leases as lessor
The Group to some extent makes short-term and long-term operating leases of
equipment to customers. The rental income during 2023 from such arrangements
amounted to SEK 101m (81).
The table below shows maturity analysis of lease payments to be received after the
reporting date (not discounted):
GROUPSEK m 31 December 2023 31 December 2022Within one year 49 511-5 years 33 77 82 128
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NOTE 24 Capital commitments
At the reporting date the Group had no significant capital commitments.
NOTE 25 Contingencies
Taxation contingencies
Significant changes to the Kazakh tax system have taken place in recent years as
previous legislation regarding important taxes (e.g. corporate income tax, transfer
pricing, taxing at source and VAT) has been gradually replaced. The application of
the legislation is, in many aspects, still unclear. The application of established tax
rules, such as existing double-taxation treaties, is also subject to regular review.
Furthermore, the Kazakh tax authorities can be unpredictable in their interpretation
of tax legislation and their enforcement and collection of tax.
Technical violations of contradictory laws and edicts may lead to severe penal-
ties. The tax authorities can interpret legislation to the disadvantage of the taxpayers,
which thus are required to turn to the courts to defend their positions. Consequently,
the Group’s tax liability may come to significantly exceed the amounts which thus far
have been booked, paid, or reported in the Group’s financial statements. Additional
tax liability, as well as unforeseen changes in Kazakh tax legislation, could have an
adverse effect on the Group’s business, result, and financial position.
Pledged assets
Ferronordic AB has pledged the shares in Ferronordic Germany Holding AB, which
is the company that in turn owns the shares in the German and American opera-
tions, to Nordea Bank Plc as security for the loans taken out from the bank. The
net assets of Ferronordic Germany Holding AB as at 31 December 2023 amounted
to SEK 268m (14).
Furthermore, the inventory (machines and trucks) is pledged to varying
extents to Volvo Financial Services in Germany and the USA and also to Nordea’s
American branch as security for a local revolving credit facility for the subsidiary
Rudd Equipment Company inc. The total amount of pledged assets in these opera-
tions amounted to SEK 1,893m (306)
Transactions with other related parties
PARENT COMPANY
Revenue
SEK m 2023 Transaction value 2022 Transaction value
Services and other income:
Subsidiaries 22 23
Interest accrued:
Subsidiaries 50 11
Equipment sold:
Subsidiaries 23 71
Dividends received:
Subsidiaries - 107
94 211
Expenses
SEK m 2023 Transaction value 2022 Transaction value
Interest expense:
Subsidiaries 0 -25
NOTE 26 Related party transactions
Control relationships
The Group’s consolidated annual and interim financial statements are publicly available.
At the end of 2023, members of management and the Board controlled
25 percent of the shares and votes in the Parent Company (24).
Transactions with employees
Except for regular salary payments and similar, there were no transactions be-
tween the Group and its employees during the year.
Remuneration to management is included in personnel costs and presented in
Note 29, Employees, Board and Management.
.
Outstanding balances
SEK m 31 december 2023 31 december 2022
Contributions to subsidiaries 288 175
Loans to subsidiaries 1,850 168
Trade and other receivables 46 43
2,184 386
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 2023 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. Machines from Mecalac were also sold to
Kazakhstan in 2022. In 2023, machines sold related to machines from Mecalac
purchased by the parent company and sold to Kazakhstan. Kazakhstan in 2023
and 2022 and in Russia in 2022.
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NOTE 27 Events subsequent to the reporting date
Other than as stated above, nothing material has changed that the Group is aware of and that requires disclosure in the financial statements.
NOTE 28 Interests in group companies
As of 31 December 2023, the Group consists of the following legal entities:
20232022Corporate Country of Ownership/ Ownership/ Carrying Subsidiaryidentity numberincorporationvoting, % Carrying amountvoting, %amountFerronordic AB 556748–7953 Sweden Parent Company - Parent Company -Ferronordic Kazakhstan LLP Kazakhstan 100 14 100 14Ferronordic Torgoviy Dom Kazakhstan LLP Kazakhstan 100 0 100 0Ferronordic Germany Holding AB Sweden 100 273 100 21Ferronordic GmbH Germany 100 27 100 26Ferronordic Immobilien GmbH Germany 100 1 100 1Ferronordic Electric Trucks GmbH Germany 100 0 100 0Ferronordic Auto GmbH Germany - - 100 10Ferronordic Charter GmbH Germany - - 100 1Truck Center Krämer GmbH Germany - - 100 3Truck Center Rhön GmbH Germany - - 100 0Thomas Nutzfahrzeuge GmbH Germany - - 100 1Ferronordic Americas LLC USA 100 0 100 -Rudd Equipment Company LLC USA 100 2 100 -Ferronordic LLC Russia 100 0 100 0 317 77
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NOTE 29 Employees, board and management
a) Number of employees (average)
2023 of which female, % 2022 of which female, %Parent Company – CitizenshipSweden 6 33 6 17Germany - - 0 0Total in Parent Company 6 33 6 17Subsidiaries - CitizenshipGermany 335 16 330 17Kazakhstan 31 29 14 43Sweden 1 0 1 0US (annualised) 355 14 - -Other 86 15 80 34Total in subsidiaries 808 15 425 18Total Group 814 16 430 18
b) Breakdown between men and women in management
GroupParent CompanyFemale representationFemale representationSEK m 2023 2022 2023 2022Board, % 33 33 17 17Management, % 14 14 10 10
c) Personnel costs
20232022Salaries and Social security Salaries and Social security SEK mother remunerationexpensesother remunerationexpensesParent Company 45 13 34 8 (of which pension costs) 4 1 Subsidiaries 361 65 271 38 (of which pension costs) 36 21Total 407 78 305 47 (of which pension costs) 40 22
The personnel costs included in cost of sales in the subsidiaries amounted to SEK 100m (96).
The Parent Company’s personnel costs include remuneration to the members of the Board.
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The table below shows salaries and other remuneration (excluding pension costs)
distributed between the Parent Company and its subsidiaries and between man-
agement and other employees.
The members of the Board and management in the Parent Company, the
subsidiaries, and the Group in 2023 amounted to 10 (10), 3 (4) and 13 (14),
respectively.
During 2023 and partly as a result of the Group’s sale of its Russian business,
the Group transferred some executives from Group subsidiaries to the Parent
company.
Note 29, Employees, board and management, cont.
20232022SEK m Board and management Other employees Board and management Other employeesParent Company 42 3 30 4 (of which bonuses) 23 1 18 1 Subsidiaries 9 352 19 252 (of which bonuses) 1 89 0 35 Total 51 355 49 256 (of which bonuses) 24 90 19 36
d) Remuneration to the Board
Remuneration paid to the Board in 2023 was fixed and amounted to SEK 2.4m
(2.6). At the AGM 2023, it was resolved that the remuneration to the Board should
be paid in an amount of SEK 2.6m. Of this amount, SEK 800,000 should be paid
to the chairman and SEK 400,000 to each of the other Board members, except for
Lars Corneliusson, who is employed by the Group. No additional remuneration is
paid for work on the board committees.
Remuneration to the Board (SEK)
Name 2023 2022Staffan Jufors 800,000 800,000Aurore Belfrage 400,000 400,000Anette Brodin-Rampe 400,000 400,000Lars Corneliusson - -Erik Eberhardson - 166,666Håkan Eriksson 400,000 400,000Niklas Florén 400,000 400,000 2,400,000 2,566,666
e) Remuneration to management
Remuneration to management consists of fixed and variable salaries, with the
variable part based on achieved results and individual targets. Potential severance
pay to the CEO shall not exceed 12 months’ salary while severance pay for other
senior executives ranges from three to 12 months’ salary. The principles for remu-
neration to management, as adopted by the AGM, are described in the corporate
governance report. A long-term share-based incentive program was introduced
for senior management in 2020 and was continued in 2022 and 2023. For more
information on this program, please refer to Note 17, Capital and reserves.
The CEO’s remuneration in 2023 amounted to SEK 16,175,956 (15,300,648)
including share-based incentive program in an amount of SEK 4,564,000 (0). The
right to pension contributions amounted to 9 percent (9) of the fixed gross salary.
Management
Name 2023 2022Martin Bauknecht until March full yearHenrik Carlborg full year full yearLars Corneliusson full year full yearErik Danemar full year full yearDan Eliassson full year full yearOnur Gucum full year full yearNadia Semiletova full year full yearJonathan Tubb from March to April full yearCeren Wende - until MayAnton Zhelyapov full year full year
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NOTE 30 Auditors’ fees and expenses
GroupParent CompanySEK m 2023 2022 2023 2022KPMGAudit assignments 6 2 4 2Total 6 2 4 2
NOTE 31 Earnings per share
The calculation of earnings per share is based on the result attributable to holders
of shares and is thus calculated as the result for the year divided by the average
number of shares outstanding. Below is the calculation of basic and diluted earn-
ings per share for the Group. The dilutive effect on shares was due to the warrant
programs described in Note 17, Capital and reserves.
2023 2022Result attributable to shareholders, SEK m -107 440Average number of shares during the year before 14,532 14,532dilution, thousandEarnings per share before dilution, SEK -7.39 30.28Dilution effect - -Average number of ordinary shares during the year 14,532 14,532after dilution, thousandEarnings per ordinary share after dilution, SEK -7.39 30.28
Earning per share from continuing operations
2023 2022Result from continuing operations, SEK m -107 183Average number of shares during the year before 14,532 14,532dilution, thousandEarnings per share from continuing operations -7.39 12.58before dilution, SEKDilution effect - -Average number of ordinary shares during the year 14,532 14,532after dilution, thousandEarnings per ordinary share from continuing -7.39 12.58operations after dilution, SEK
Note 29, Employees, board and management, cont.
Remuneration to CEO and other executives
20232022Other Other SEK CEOexecutives Total CEOexecutives TotalFixed salary 7,865,165 16,604,386 24,469,552 7,520,660 20,642,950 28,163,610Variable salary 2,752,808 3,805,678 6,558,486 7,058,139 11,066,542 18,124,681Share based incentive program 4,564,000 13,255,964 17,819,964 - - -Pension costs 993,983 2,396,286 3,390,269 721,849 282,660 1,004,509Total 16,175,956 36,062,315 52,238,270 15,300,648 31,992,153 47,292,801
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NOTE 32 Acquisition of business
On November 13 2023, Ferronordic announced that it has entered into an agree-
ment to purchase 100 percent of the shares in the Rudd Equipment Company, Inc.
(“Rudd”), one of the largest dealers of Volvo CE in the United States with opera-
tions in all or parts of nine states. The acquisition was completed on November 30
2023.
Following the acquisition, a fair valuation of assets and liabilities has been
performed for the purpose of a purchase price allocation (PPA) in line with IFRS-3.
At the time of this report, the fair valuation and related PPA remain preliminary.
The fair value of receivables at the date of acquisition was SEK 318m, which
is derived from a gross amount SEK 340m and a provision for credit losses of
SEK 22m. The Group believes that the net amount is an appropriate estimate of
cash flows expected to be collected. Most of the receivables are from customers.
The goodwill captures the value of reputation, market position, employee
expertise, organisational structure and culture, institutional learning, synergies
and future growth opportunities in Rudd and its position in the US market. Rudd’s
people, expertise and experience, organisation and infrastructure offers Ferronordic
opportunities to expand both on the basis of its current product portfolio and poten-
tial expansion of its product portfolio and geographic presence.
A deferred consideration of SEK 14m (USD 1.3m) has been reserved in Ferronordic’s
Q4 2023 financial statements. The sale and purchase agreement was, with certain
modifications, based on net asset value. The consideration paid on 30 November
was based on a forecasted balance sheet for 30 November. After the completion of
the transaction, there was a true-up of the balance sheet for 30 November. A residual
payment from buyer to seller, or seller to buyer, should be paid if the net asset
value in the final balance sheet differed from the forecasted balance sheet.
The revenue and profit or loss before income tax of Rudd in December, after
acquisition in November, amounted to SEK 308m and SEK 30m respectively. The
legal, accounting and other administrative costs related to acquisition amounted to
11m SEK, the costs were included in general and administrative expenses of the
Group’s statement of comprehensive income. If Rudd was consolidated from the
beginning of the year the consolidated revenue and profit or loss before income tax
of the Group would be approx. SEK 5,313m and SEK 34m.
The tables below describe cash flows used in the purchase, consideration
transferred, calculation of goodwill and breakdown of net assets acquired. A rate of
SEK/USD 10.46 has been used for the below calculations as of 30 November.
Net cash outflow
SEK m
Cash consideration transferred 1,093
Less cash acquired 0
Net cash outflow 1,093
Goodwill
SEK m
Consideration total 1,107
Less fair value of net assets acquired 957
Goodwill 150
Net assets
SEK m
Property, plant and equipment 1,326
Intangible assets 16
Inventories 620
Trade and other receivables 318
Prepayments 2
Cash and cash equivalents 0
Borrowings -472
Deferred tax liabilities -290
Trade and other payables -548
Lease liabilities -15
Net assets 957
Consideration
SEK m
Cash 1,093
Deferred consideration 14
Consideration total 1,107
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NOTE 33 Sale of subsidiaries
At end of 2022, Ferronordic divested its Russian business for a sales price of
SEK 1,334m. In the transaction, Ferronordic sold its main Russian subsidiaries
Ferronordic Machines LLC, Ferronordic Torgoviy Dom LLC, Ferronordic Torgovaja
Kompanija LLC and Ferronordic Arkhangelsk LLC. 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 on Ferronordic’s account in Austria. The purchase price largely corresponded
to the sold companies’ expected net asset value in local currency at the time of the
transaction. For the Group outside Russia, the divestment resulted in a cash inflow
of EUR 99m or approx. SEK 1,097m.
In 2022, the Russian business generated revenue of SEK 4,7b with an
operating profit of SEK 564m, corresponding to 76 percent and 117 percent of the
Group’s total revenue and operating profit, respectively. During the same period,
the Group’s other business, excluding Russia, generated revenue of SEK 1.5 bil -
l ion with an operating loss of SEK -81m (9 percent of the revenue related to
Kazakhstan and the rest to Germany).
The sale meant that Ferronordic in all material respects divested all assets and
liabilities related to Russia. The transaction agreements contain basic representa-
tions and warranties concerning the sold companies, but Ferronordic does not
expect any liabilities or obligations to arise from these.
Ferronordic has maintained one subsidiary in Russia to move a small number
of key employees to other markets. The subsidiary will be closed during 2024.
The sale did not have any direct impact on the Group’s operations outside of
Russia.
In 2023 the Group reviewed the result from the operations that were discontin-
ued in 2022 and decreased the general and administrative expenses by SEK 14m.
These were costs which relate to continuing operations. The general and admin-
istrative expenses for continuing operations have increased by the same amount.
The results for continuing and discontinued operations have been changed corre-
spondingly. The total result for the Group has not changed.
Calculation of sales price for the sale of subsidiary
SEK mCash compensation 1,097Intercompany loan netted off 237Contract price 1,334
Result from sale of subsidiary
SEK mContract price 1,334Less net assets end of 2022 -1,292Result from sale of subsidiary 41
Cash proceeds from sale of subsidiary
SEK mCash proceeds 1,097Cash in subsidiary at the moment of sale -248Net cash flow from sale of subsidiary 849
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Profit and loss for discontinued operations
SEK m20222021Revenue 4,496 4,700Cost of sales -3,408 -3,764Gross profit 1,089 937Selling expenses -193 -156General and administrative expenses -212 -176Other income 44 7Other expenses -122 -17Operating profit 606 594Finance income 22 21Finance costs -76 -32Foreign exchange gains/(-losses) (net) -28 -1Result before income tax 524 583Income tax -98 -134Result for the period 426 448
SEK m20222021Result for the period 426 448Result from sale of subsidiary 41 -Other expenses related to sale of subsidiary (net -22 -of tax)Reclassification of exchange differences from -188 -other comprehensive incomeResult from discontinued operations 257 448
Net assets of subsidiaries end of 2022
SEK m 31 Dec 2022ASSETSNon-current assetsProperty, plant and equipment 519Intangible assets 2Intercompany loans 230Deferred tax assets 151Total non-current assets 903Current assetsInventories 672Trade and other receivables 319Prepayments 224Cash and cash equivalents 248Total current assets 1,461TOTAL ASSETS 2,364Non-current liabilities Deferred income 0Deferred tax liabilities 76Long-term lease liabilities 53Total non-current liabilities 129Current liabilitiesBorrowings 521Trade and other payables 321Deferred income 12Provisions 57Short-term lease liabilities 31Total current liabilities 942TOTAL LIABILITIES 1,072NET ASSETS 1,292
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 33, 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.
Calculation of earnings per share from discontinued operations before dilution:
20222021Result from discontinued operations, SEK m 257 448Average number of shares during the period 14,532 14,532before dilution, thousandEarnings per share from discontinued 17.70 30.84operations before dilution, SEK
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The Board of Directors and the Managing Director warrant that the annual accounts
have been prepared in accordance with generally accepted accounting principles
in Sweden and that the consolidated financial statements have been prepared
in accordance with the international financial reporting standards referred to in
regulation (EC) No 1606/2002 of the European Parliament and of the Council of
19 July 2002 on the application of international accounting standards. The annual
accounts and consolidated financial statements give a true and fair view of the
Parent Company’s and Group’s financial positions and results. The audit report
Board signatures
for the Parent Company and Group gives a true and fair overview of the devel-
opment of the Parent Company’s and Group’s activities, their financial positions
and results, and describes significant risks and uncertainties faced by the Parent
Company and the companies included in the Group. The annual accounts and
consolidated financial statements were approved for release by the Board of Direc-
tors on 16 April 2024. The consolidated statement of comprehensive income and
the consolidated statement of financial position and the Parent Company income
statement and the Parent Company balance sheet will be submitted for adoption at
the Annual General Meeting on 16 May 2024.
Staffan Jufors Aurore Belfrage Annette Brodin Rampe
Chairman Director Director
Håkan Eriksson Niklas Florén Lars Corneliusson
Director Director Director and CEO
Our audit report was submitted on 16 April 2024
KPMG AB
Mats Kåvik
Authorised Public Accountant
Stockholm, 16 April 2024
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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 2023, except for the corporate governance statement on pages
65–69 and the sustainability report on pages 43–60. The annual accounts and consolidated accounts of the company are included on pages 43–60, 65–69 and 74–126
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 2023 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 2023 and their financial performance and cash flow for the year then ended in accordance with IFRS Accounting Standards, as adopted by the EU, and the
Annual Accounts Act. Our opinions do not cover the corporate governance statement on pages 65–69 and sustainability report on pages 43–60. The statutory administra-
tion 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.
Formal annual report
Directors’ report
Risks and uncertainties
Financial reports
Notes
Board signatures
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Valuation of goodwill (group) and shares in group companies (parent company)
See disclosure 12 (group) and disclosure 28 (parent company) and accounting principles on page 94 (group) and on page 96 (parent company) in the annual
account and consolidated accounts for detailed information and description of the matter.
Description of key audit matter
The carrying value of goodwill for the group as at 31 December 2023 amounted
to 228 MSEK. Goodwill is required to be tested annually for impairment, which
comprise both complexity and is dependent on judgements.
The impairment test shall according to IFRS be performed in accordance with
a certain method where management needs to make judgements of future, internal
as well as external, conditions and plans. Example of such judgements is forecasts
of future cash flows which, among other things, require assumptions about future
development and market conditions.
Another important assumption is what discount rate should be used to reflect
market-based assessments of the time value of money and the particular risks that
the business faces.
The carrying value of shares in group companies in the parent company as at
31 December 2023 amounted to 288 MSEK. If the carrying amount of the shares
exceeds the consolidated value of the respective group company, the same type of
testing is carried out, with the same technology and input values, as for goodwill in
the group.
Response in the audit
We have assessed whether the goodwill impairment test carried out by the client
was performed in accordance with the prescribed accounting method. We have
further considered the reasonableness of the assumptions in the cashflow fore-
casts as well as the discount rate used through evaluation of the group’s internal
written documentation and forecasts.
An important part of our work has also been to review the group’s sensitivity
analysis of their own assessment to evaluate how reasonable changes in the
assumptions may impact the valuation.
Furthermore, we have considered the completeness of the disclosures in the
annual report and evaluated whether they are in agreement with the assumptions
made in the group’s impairment tests.
Formal annual report
Directors’ report
Risks and uncertainties
Financial reports
Notes
Board signatures
Auditor’s report
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 1–64 and 70–73. 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
consolidated accounts, in accordance with IFRS Accounting Standards 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 misstate-
ment, 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 accept-
ed 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 obtained
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 information
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.
Formal annual report
Directors’ report
Risks and uncertainties
Financial reports
Notes
Board signatures
Auditor’s report
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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 2023 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
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 whether the
proposal is in accordance with the Companies Act.
Formal annual report
Directors’ report
Risks and uncertainties
Financial reports
Notes
Board signatures
Auditor’s report
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annual reportThe shareSustainabilityIntroduction
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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 2023.
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 proce-
dures 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 International Standard on Quality Management 1, which
requires the firm to design, implement and operate a system of quality manage-
ment including policies or procedures regarding compliance with ethical require-
ments, professional standards and applicable 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 XHTML 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
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The auditor’s examination of the corporate governance statement
The Board of Directors is responsible for that the corporate governance statement on pages 65–69 has been prepared in accordance with the Annual Accounts Act.
Our examination of the corporate governance statement is conducted in accordance with FAR´s standard RevR 16 The auditor´s examination of the corporate
governance statement. This means that our examination of the corporate governance statement is different and substantially less in scope than an audit conducted in ac-
cordance 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 43–60, and that it is prepared in accordance with the Annual Accounts Act.
Our examination has been conducted in accordance with FAR´s 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 11 May 2023. KPMG AB or
auditors operating at KPMG AB have been the company's auditor since 2010.
Stockholm 16 April 2024
KPMG AB
Mats Kåvik
Authorised Public Accountant
Formal annual report
Directors’ report
Risks and uncertainties
Financial reports
Notes
Board signatures
Auditor’s report
Ferronordic AB Head office • Nybrogatan 6 • SE-114 34 Stockholm, Sweden • +46 8 50 90 72 80 • info@ferronordic.com • ferronordic.com
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